FOR AS LONG AS I CAN REMEMBER, the mantra in the supermarket industry has been “make shop- pers’ lives easier.” Nearly every ear, someone says something
like “convenience has never been more
important than it is now.” Who am I to dis-
agree? I am a shopper myself, and I defi-
nitely want my life to be easier, and our
lives are getting easier in many ways. What
I am seeing in the super-
market realm, however,
is that it is not necessar-
ily stores that are help-
ing to make shoppers’
lives easier—it is the
digital middlemen, or
what we are calling dig-
& Their Impact on the
Retail Value Chain, produced in partner-
ship with RetailNet Group, defines digital
intermediaries as entities that sit between
the end consumer and the retailer. Digital
• Operate a digital consumer
• Leverage the platform to
aggregate and direct demand;
• Attract and sustain high
viewership and audience reach;
• Have the power to influence
consumer purchase decisions.
Years ago there was one basic path
to purchase. People went to the store to
buy what they needed. If they ordered
something for delivery, they did it directly
with a retailer, either by phone or mail; the
internet was not secure enough for credit
card purchase. Obviously, that path still
exists, and it is probably not going away,
but it is being joined by a number of other
paths to purchase. Now, we can research
our choices through review engines
like Yelp. We can make sure we are get-
ting the best price through offer engines
like RetailMeNot or Groupon. Then, we
can purchase directly from brands, buy
from marketplaces like Amazon, or click
on social media sites like Facebook and
Pinterest to make a purchase, and we can
have it delivered by a service like Uber,
Instacart, or Postmates—before we post a
review for the next shopper to read.
In short, we can engage pre-shop, while
shopping, and post-shop. But are shoppers engaging with the store? In many
cases, no. They are engaging with digital
From the shopper’s perspective, it is
great. They see fewer friction points. They
may not see the hidden costs of convenience that each intermediary adds to the
total, but in many cases they do not care.
From the retailer’s perspective, digital
intermediaries are helping to meet one
of the main objectives: making shoppers’
lives easier. Just like shoppers, however,
retailers have a price to pay for the convenience that intermediaries can deliver.
Because shoppers no longer interact with
the store, retailers may be losing impor-
tance in shoppers’ minds. Intermediaries
may be helping retailers sell more prod-
uct, but the retailers are selling more to
other businesses and less to individual
shoppers. Gradually, that means valuable
shopper data is being controlled by inter-
mediaries rather than supermarket retail-
ers. It could also weaken the relationship
between a store and its shoppers.
Digital intermediaries can also act as
direct competition to supermarkets. There
are some subscription service startups that
deliver fresh ingredients and recipes direct
to customers to meet demand for convenient, fresh home-cooked meals. These
businesses might be in direct competition
with in-store pre-cut vegetable programs
and prepared foods departments.
The potential pitfalls of digital intermediaries emphasize the need for strong
perimeter departments. Like we have
heard so many times before, it is easy to
shop online for center store items because
many shoppers do not care who ultimately fills the order. Fresh foods, on the
other hand, matter to shoppers.
Given the innovative and relentless
competition from digital intermediaries, there may be ways to leverage their
power to help the supermarket industry.
Intermediaries can offer transparency on
product and retailer information, give customers a personalized shopping experience and allow shoppers to be heard.
While we cannot see all of the pitfalls or
all of the benefits of digital intermediaries,
we know that they are changing the retail
landscape—and fast. To get a better picture of the types of intermediaries that are
out there and how they might impact your
business, I encourage you to visit iddba.
org to get a copy of Digital Intermediaries &
Their Impact on the Retail Value Chain, free
to IDDBA members.
DISSECTING DIGITAL INTERMEDIARIES
Supermarkets may want to consider developing partnerships with specific types of intermediaries.
By Alan Hiebert
Alan Hiebert is senior education
coordinator for IDDBA. He can be
reached at email@example.com.