hed no tears for the N4 Tap Room. The
subterranean pub and restaurant
in Brooklyn’s hip Williamsburg
neighborhood quietly closed shop
recently, a victim of the catastrophic
new-restaurant failure rate—or
perhaps of something else.
Visitors to Whole Foods Mar-
ket’s Williamsburg, N.Y., store—
where N4 Tap Room formerly resided,
between the meat and seafood counters—will
now find the space maintaining a different kind of lively activity
in its new guise as a staging area for Amazon Prime personal
shoppers to pick and prepare online grocery orders for delivery.
Where there was once customers leisurely noshing and sipping
18 locally sourced beers on tap and an adjacent kitchen whipping up Reuben sandwiches and baby kale salads is now rows
of coolers and shelving, with contract shoppers wheeling orders
in and out on carts.
While representatives of Whole Foods did not respond to an
inquiry about the transition of the N4 space, this was a knockout
victory for convenience over retail foodservice as far as grocery
megatrends are concerned, and just one more indication of how
delivery is changing the face of the industry.
Whole Foods’ parent company, Amazon, transitioned the N4
space as it began providing delivery through its Prime Now service this summer, roughly a year after the Seattle-based e-commerce giant acquired Whole Foods as a key element of its strategy to gain a substantial foothold in grocery. Sources say that
event marked a revolutionary development in the race toward
omnichannel that has since seen companies large and small join
a furious battle to win the last mile through any means necessary.
The combatants have their eyes on a huge prize: The Food
Marketing Institute projects online grocery will account for
about $30 billion in sales by 2021. Gaining high-spending, loyal
shoppers and the more intimate relationships their online shopping trips generate is also important—although doing so comes
with daunting costs that can easily overwhelm any advantages
to the top line, to say nothing of the potential disruption to store
environments and inventories that can come with investing in a
new sales channel. At the same time, customer-centric organizations have an obligation to meet their shoppers where they want
to be, and for a growing legion today, that’s waiting—hopefully
not long—for groceries to come to them.
“The appetite for home delivery has been awoken for consum-
ers and retailers,” says Tamir Gotfried, global sales manager for
the Israel-based delivery logistics firm Bringg. “A lot has changed
over the last few years and today, almost every single grocer is
getting their feet wet. They may not all be doing the right things,
but they’re doing something in the delivery space, or they are
thinking about doing something in the delivery space. And all
of them know they need to play in grocery delivery. That’s the
big thing. Overcoming the idea of saying ‘No, I’m happy with
my retail locations as they are’ is a very difficult thing, but
there’s been a major shift. Things started happening.”
A range of interviews conducted with retailers, consul-
tants and vendors indicates that delivery is more than a
land rush even in these early days, with retailers studying
service and price as potential differentiators in the same
way they would when evaluating a store.
“Ultimately, retailers are making trade-offs between
greater control and lower costs,” says David Bishop, partner
with Barrington, Ill.-based consultant Brick Meets Click. “While
that’s overly simplified, this is what’s been happening over the
last 12 to 18 months. Longer term, retailers will have more
options to use that will help them achieve more of both.”
Putting on the ‘White Gloves’
When it comes to delivery, legacy grocers such as Albertsons Cos. can have their hands in several strategies at once. The retailer has offered online grocery delivery through a fleet of its own temperature-controlled vehicles for
years. Albertsons touts this controlled but costly offering as a
“white glove” service that strengthens its brands’ equity and differentiates through delivery drivers who, for example, will carry
orders not just to the door but also to the shoppers’ kitchen
counter. This service is available for next-day or same-day deliveries and includes perks such as integration into its Just 4 U loyalty programs, which provide coupons and discounts. Delivery
pricing for this offer varies, with incentives available for certain
orders that aid in the efficiency of driver routes.
“The customer is the heart of our business, so we have to take
good care of them. It’s vital,” says Jewel Hunt, group VP of e-commerce for Albertsons. Hunt says the company’s delivery drivers
are given a combination of classroom and on-the-job training,
with new drivers accompanying experienced colleagues before
getting their own routes.
“We consider our drivers our brand ambassadors,” Hunt says.
“We want our customers to come to know them and see them as
an extension of what we provide for them.”
At the same time, Albertsons offers a “powered by Instacart”
We consider our drivers our
brand ambassadors. We want our
customers to come to know them
and see them as an extension of
what we provide for them.”
—Jewel Hunt, Albertsons Cos.