Hy-Vee, Inc. is an employee-owned retailer operating more than 285 grocery stores across eight Midwestern states with sales of more than $12 billion annually. The supermarket chain is synonymous with quality, variety, convenience, healthy lifestyles, culinary expertise and superior customer service. Hy-Vee ranks in the Top 5 Most Trusted Brands and has been named one of America’s Top 3 favorite grocery stores. The company’s more than 93,000 employees provide “A Helpful Smile in Every Aisle” to customers every day.

In the grocery industry, Hy-Vee has established a reputation for being an early adopter of new technologies.

Hy-Vee

“Hy-Vee has been a leader in the e-commerce space for many years since the start of our Hy-Vee Aisles Online service," said Randy Edeker, chairman and CEO of Hy-Vee, in a press statement.

Established in 2015, Hy-Vee Aisles Online is Hy-Vee’s grocery ordering service, which became instrumental following the outbreak of COVID-19. Since 2020, the service has grown rapidly due to increased demand. Hy-Vee continues to further enhance the service with more personalized service and added functionalities.

But online grocery ordering isn’t the only e-commerce initiative up this retailer’s sleeves. In the past year, Hy-Vee has invested heavily in digital and technology opportunities as it aims to make customers’ lives easier with convenient and easy-to-use solutions.

Randy Edeker, Chairman & CEO

Grocery Shopping Reimagined

September 2021 marked the opening of Hy-Vee’s first digitized flagship store in Grimes, Iowa, bringing an entirely reimagined grocery shopping experience to its customers.

“The Grimes Hy-Vee is our most innovative store to-date with state-of-the-art technology integrated into every department,” Edeker said.

Since then, the retailer has opened two other flagship stores in Eau Claire, Wisconsin, and Springfield, Missouri, that are modeled after the Grimes store.

Each store is powered by hundreds of digital shelf labels that display product information and pricing. More than 100 TVs displayed throughout the store feature Hy-Vee products, promotions and services. Digital ordering kiosks are also available for customers to order and customize cakes and fresh prepared foods, as well as access offerings via Hy-Vee Financial Services.

Hy-Vee partnered with several tech companies to bring the stores to life digitally with special touches integrated seamlessly throughout the store. In partnership with Chowbotics, Hy-Vee added Sally – a robot that can assemble custom salads made with fresh ingredients. Partnering with Simbe Robotics, Hy-Vee introduced an autonomous robot to some its stores that scans shelves to ensure items are in stock and priced correctly.

Each of the flagship locations also features Hy-Vee Scan & Go, mobile payment technology that allows customers to scan and bag their items as they shop. Self-checkout lanes are also in each store for a faster, more convenient checkout experience.

Health & Wellness Goes Digital

Evolving into a National Retailer

Hy-Vee’s adoption of technology doesn’t stop at groceries. For more than 50 years, Hy-Vee has been a leading pharmacy provider, operating more than 275 retail pharmacies and 21 specialty pharmacies under the Amber Specialty Pharmacy brand. In recent years, technology has become the No. 1 focus in growing the retailer’s health and wellness portfolio.

One of Hy-Vee’s most notable technologies developed in the past year has been its award-winning online COVID-19 vaccine scheduler and accompanying landing page that allowed patients to quickly and easily schedule their vaccination and stay up-to-date on the latest vaccine eligibility guidance when vaccine supply was most scarce. These online tools were critical in helping Hy-Vee administer millions of doses of the lifesaving COVID-19 vaccine to individuals across the Midwest in only a matter of months.

The retailer has also turned to technology to make healthcare more accessible to patients. In partnership with En-Vision America’s ScripTalk product, Hy-Vee introduced talking prescription labels to its pharmacies to assist visually- and print-impaired patients. The labels are also available in 26 languages to assist non-English-speaking patients. To reach customers where they’re at, the retailer launched virtual dietitian services that are available in both English and Spanish.

In its quest to become a national retailer, Hy-Vee has launched several national ship-to-home services over the past six months.

ShopHSTV.com is the companion site to Hy-Vee’s existing Helpful Smiles TV (HSTV) free streaming network. The platform offers HSTV viewers a way to shop products from their favorite HSTV shows such as barware, home décor, kitchen and dining products, pantry items and more.

Hy-VeeDeals.com offers bulk snacks, candies, groceries, beverages, home and houseware products and more at great prices. For its Midwest customers, all weekly ads, digital coupons and hot deals are also aggregated on the site to be used in store or via Hy-Vee Aisles Online.

ShopPetShip.com offers the essentials for every pet, including food, grooming supplies, toys and more. Customers can also take advantage of subscription services to have pet products shipped directly to their homes.

WholeLottaGood.com features a full range of dietitian-approved health and specialty products including grocery items, vitamins, health and beauty products, fitness equipment and more.

According to Edeker, investing in advanced technologies will be a key part of Hy-Vee’s growth strategy moving forward.

“Our mission has always been to make our customers’ lives easier, healthier and happier,” Edeker said. “To do that, we must be all-in on digital and invest in new and innovative solutions that will make our customers’ lives easier.”

As Hy-Vee looks to serve patients and customers beyond its traditional eight-state region, the retailer has turned to new online ventures. In 2021, Hy-Vee launched RedBox Rx, a low-cost telehealth and online pharmacy provider that ships prescribed treatments directly to patients’ homes throughout the U.S. More recently, Hy-Vee introduced Vitamine, a national vitamin and supplement service that specializes in personalized vitamins that can be shipped directly to customers’ homes. The site is powered by a team of registered dietitians who are also available to answer customer questions.

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MAY 2022

Hy-Vee

Spotlight

Francois Chaubard

CEO, Focal Systems

07/05/2024 20:36:41

Kroger

Across the Kroger Companies’ family of companies that includes Kroger, Ralphs, Dillons, Smith’s, King Soopers, Fry’s, QFC, City Market, Owen’s, Jay C, Pay Less, Baker’s, Gerbes, Harris Teeter, Pick ‘n Save, Metro Market, Mariano’s, Fred Meyer, Food 4 Less, and Foods Co, nearly half a million associates serve over nine million customers daily through a seamless digital shopping experience and 2,800 retail food stores. The Kroger Co. (NYSE: KR) is dedicated to its Purpose: to Feed the Human We are.

Kroger is continuing its rapid advancement of online grocery options, announcing that it is expanding its fulfillment network to three new cities this year (Austin and San Antonio, Texas, and Birmingham, Alabama). Currently the Florida fulfillment center handles e-commerce grocery supporting grocery delivery in several geographies, including Orlando, Tampa, and Jacksonville. The Ocado Group (LSE: OCDO) powers the technology within the fulfillment centers.

Earlier this year, Kroger announced it is taking digital delivery business into its own hands. The announcement marks a shift in Kroger's delivery strategy, which until now has primarily relied on Instacart to power its eCommerce delivery business. Certainly, there are advantages for the grocer to bringing delivery in-house, such as owning the transaction and retaining the full share of the profit, among others.

After placing an order via Kroger.com or the Kroger app, customers in regions where a CFC is located have groceries delivered by a knowledgeable Kroger Delivery associate in a temperature-controlled van. The associate delivers industry-leading customer service, including ensuring order freshness and satisfaction, managing order changes, and informing customers of loyalty membership benefits like earned fuel points through a partnership with Shell® and digital coupon savings.

Kroger Delivery Customer Experience

As part of Kroger's commitment to provide a differentiated and affordable grocery delivery experience for customers, Kroger Delivery offers variable delivery fees that do not require customers to provide a tip and are influenced by a number of factors like a customer's loyalty, delivery window popularity, route optimization, and order lead time. Variable delivery fees will allow Kroger Delivery to provide additional discounted options where it has the flexibility, creating a personalized offering and delivering value to customers in ways that matter.

Last year Kroger rolled out new “KroGO” shopping carts powered by Caper. Customers can swipe their reward cards, weigh produce right at the cart, scan the bar codes on items as shoppers plunk them off the shelves, and even put things back and remove them from the tab. The cart gives shoppers a running subtotal of purchases as items are added, helping people stay on budget. Once clients are done shopping, they can scan debit or credit cards and walk out without standing in line. With the carts’ ability to display buying suggestions in real time based on shoppers’ behavior, shoppers buy more than the average during their shopping trips.

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MAY 2022

Kroger

Spotlight

Francois Chaubard

CEO, Focal Systems

07/05/2024 20:36:41

Driving Excellence in Digital Grocery

As Vice President, Marketing at Mercatus, Mark Fairhurst leads the development of the company’s overall marketing and brand strategy and related programs. He’s also co-host on The Digital Grocer podcast and brings to the show a marketer’s perspective on the rapidly evolving grocery tech landscape. He applies a strategic lens focused on a continual search for the next big trends and best practices. Mark enjoys exploring not just how things are changing in grocery retail, but also why they’re changing — and where they’re headed.

In an interview with RetalToday, Fairhurst shares his views on leadership and talks about how strong workplace culture in Mercatus is linked to high customer satisfaction. He highlights how a performance-driven culture has led to creating innovative digital solutions that empower grocery retailers to drive engagement and revenue from online sales.

What are the most interesting trends you’ve observed within the grocery retail industry, particularly in the past 12 months?

One of the most important trends is the resilience of online grocery sales, which is four times what it was pre-Covid. We’re looking at about $8 billion in monthly sales compared to $2 billion before the pandemic.

Another key trend is the resilience of curbside pickup, which remains the market leader over delivery despite an increase in delivery use in the last three or four months. This increase is a result of more delivery providers — specifically, quick-commerce delivery providers — entering the space, particularly in large urban centers. They’re presenting deals to consumers in an attempt to cherry pick the most engaged online shoppers. Ultimately, this won’t be a sustainable business practice.

Conventional grocers will also be interested in evidence indicating that the online share of mass merchandisers, such as Walmart, Target and Meijer, is growing compared to grocery. Looking at year-over-year results, mass expanded its monthly active shopper base about 12%, while grocery's monthly active shopper base contracted about 8%. The average order value of mass merchants was up just over 8%, while for grocery it was flat to slightly down.

Grocers need to focus on 3Cs — control, connection and cost. Owning the connection offers retailers greater control over their online actions to improve customer experience and manage cost.

Based on your interactions with clients and prospects, how are grocers adapting to or utilizing these trends?

How would you describe the changing role of technology within the grocery industry over the past couple of years?

Before the pandemic, eCommerce was seen as a way to differentiate your business, but it wasn’t a serious contributor to revenue. During the pandemic, those who supported customers with online shopping saw an increase of about four to five times the number of orders.

Going forward there will be more focus on what we call the 3Cs — control, connection and cost. As we know, the cost to serve online is bigger than serving customers in-store. Owning the connection offers greater control over a retailer’s online actions to both improve the customer experience and manage the cost pressures.

Competing for online grocery dollars has largely become a cost of doing business for brick-and-mortar grocers. But many grocers are simply following what their competitors are doing without knowing if that makes sense for their business.

When this occurs, it’s not only more challenging to improve the profitability of online grocery orders, it’s also very hard to create any competitive points of differentiation that may help drive more demand and sales from customers. Retailers are increasingly drawn to the first party channel, which is owning their own online experience.

Mercatus has a compelling and expansive vision — helping retailers engage with online customers, increase customer retention and improve margins. How has the organization stayed true to the vision of empowering grocery retailers?

Over our company’s 17-year history, Mercatus has delivered industry-leading digital grocery solutions to many of North America’s best-known retailers. We’ve introduced several innovations to help these brands propel their businesses forward and deliver greater profitability and an elevated customer experience along the way.

To continue our vision, we invest significant research into maximizing the customer experience, and we are constantly adding industry-leading features into our proven enterprise-grade technology and integrations.

For example, our clients benefit from the “network effect” of being on a multi-tenant SaaS platform, where multiple retailers’ experiences help the entire network evolve. And new functionalities are built with our clients’ unique requirements, brands, cultures, identities, revenue targets and with operational sustainability in mind. The entire platform has been designed from the ground up to power the complete end-to-end eGrocery journey — from capacity scheduling, to prepared orders and endless aisle, to curbside pickup and delivery.

Our innovation roadmap is market-driven, addressing the market’s needs and the challenges deemed most valuable to end-users — our retail clients and their shoppers. We also adhere to a “customer total experience” design philosophy. We gather quantitative and qualitative feedback from our clients to understand their needs and translate them into the right product features for architecting great customer experiences.

How can retail leaders consistently deliver online growth? What should their mantra be for consistent performance?

Whether you’re selling online only via a third-party marketplace or operate your own online shopping platform, it’s essential to have a way of bringing clarity to this complex, costly — and even confusing — segment of the business.

Make sure you know your customers and understand how those insights can help separate your banner from the pack and align with your core brand value proposition.

When pricing products online, understand the role and impact associated with digital deals, advertising programs and receiving windows that enable customers to make tradeoffs between speed and service fee.

There’s a direct connection between a company’s culture, motivation and performance. Strong workplace cultures — and I would include Mercatus in this — are linked to high customer satisfaction.

Building a great culture is not easy. At the heart of Mercatus’s business strategy is our performance-driven culture, which empowers team members to make decisions and take risks. Our core principles guide our behavior — we encourage all Mercatians to be passionate in all they do. Lean on and support one another. Take time to reflect and don’t be afraid to ask questions. Be courageous and know we’ve got your back to take risks. We all have skin in the game, so build and grow the business as if it’s your own. Above all, stay real. Never compromise your integrity.

From the day a new employee starts, we make sure they’re aware of the initiatives that inform our business strategy, so they share our commitment to our mission: creating innovative digital solutions that empower grocery retailers to drive engagement and revenue from online sales.

How do you create a culture that motivates team members to contribute to their full potential?

Looking at the remainder of 2022, what are the three most important things you would like to achieve?

Mercatus has been growing rapidly this year. We’ve doubled our development team and we are onboarding new clients. We have some exciting innovation announcements coming up. As well, we will be publishing an expanded roster of industry-leading research and insights for grocery retailers. I’m also pleased to announce the highly anticipated Season 5 of the Digital Grocer podcast is well underway. We’re all very excited about what’s ahead in the rest of 2022.

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Spotlight

may 2022

Mark Fairhurst

Vice President, Marketing at Mercatus,

THOUGHT LEADERSHIP

Driving Excellence in Digital Grocery

Mercatus

Digital Grocer

THOUGHT LEADERSHIP

07/05/2024 20:36:41