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Kroger has gone live with the expansion of its self-driving grocery ecommerce delivery pilot to the Houston market.

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We visited Philadelphia to see three new flagship stores which have recently opened in the city.

Giant Heirloom Market

The most recent store to open is Giant Heirloom Market, operated by Giant Food Stores, a subsidiary of Ahold Delhaize. This is a new format for the company, developed to enable it to tap into the urban opportunity. At 9,500 sq ft, and featuring a contemporary design, it incorporates several innovative elements including a dedicated plant-based foods section, a produce chef, kombucha taps, a do-it-yourself olive oil blending station and a central gathering area and workspace. Shoppers can also use the retailer’s self-scanning technology. Three further locations will open in Philadelphia neighbourhoods this year.

Source: IGD Research

Sprouts Farmers Market

Located in a 32,000 sq ft former rail shed, Sprouts Farmers Market chose Philadelphia for the launch of its next-generation concept. A key feature of the new concept is the Market Corner Deli, where the retailer offers a range of food-to-go, coffee, juices and a salad bar. These are new additions to the offer and form part of its strategy to broaden its appeal and gain a greater share of existing shoppers’ spend. The retailer has also made a stronger feature of its meat and seafood counters, extending them out from the perimeter wall. In this location, the heritage building is a stunning backdrop to its fresh, natural, organic and wellness-focused proposition. The retailer plans to open 30 additional stores this year, reflecting this new concept.

Source: IGD Research

Wawa

Wawa is one of the most innovative convenience retailers in the US, operating almost 850 stores. Over half of these are forecourt-based. Last December, it opened its largest standalone store in the heart of Philadelphia’s downtown. Also opening in a historic building, the 11,500 sq ft store incorporates several unique design elements including a Coca-Cola wall of light, three seating areas and specially commissioned murals. The store also reinforces Wawa’s foodservice credentials with a large made-to-order kitchen hub, extensive range of coffees, including new reserve blends, and a feature bakery.

Source: IGD Research

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Walmart Media Group has acquired Polymorph Labs, a Silicon Valley-based advertising startup.

Measuring impact at scale across the shopping journey

Walmart Media Group is the retailer’s advertising business, developed to build targeted, closed-loop advertising solutions in-store and online. With almost 160m visitors to its stores and websites every week, Walmart Media Group enables brands to operate at scale and measure the impact of their ads across the shopping journey.

Source: Walmart

Optimsing Polymorph’s technology

The acquisition of Polymorph is expected to make it easier for brands to advertise with Walmart, while also making the ads more relevant. Walmart Media Group will optimise Polymorph’s technology, complementing its existing omni-channel ad targeting and measurement solutions. Advertisers will be able to select audience segments based on shopping behaviour, automate ad delivery and measure whether their ads influenced a sale. Future innovations are expected to include real-time auctions across multiple ad-pricing models, including cost per click, cost per impression and cost per conversion. Polymorph’s technology team will join Walmart Media Group in its California and Bangalore offices.

Building a broader ecosystem 

Optimising the digital marketing opportunity to drive new revenue is a growing priority for many grocery retailers. As ecommerce becomes a larger part of their businesses, they are seeking to capitalise on online traffic. Through their loyalty programs and POS data they can also effectively measure the impact of ads directly on purchasing behaviour – this is viewed as providing them with a competitive advantage over traditional media agencies and a powerful selling message to CG brands. Amazon, Kroger and Albertsons are among several US-based retailers to develop programmes in this area. This acquisition also reflects the growing focus for retailers to make deals beyond their traditional businesses as they build broader operating ecosystems. 

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We look at the prospects for hyperlocal ecommerce fulfillment as one of the leaders in the space, Takeoff Technologies, gets set to enter a period of rapid acceleration.

Deploying technology into store backrooms

Takeoff Technologies has developed an automated fulfillment solution for grocery ecommerce that is positioned in the backrooms of existing stores. Taking around 10,000 sq ft of space, the solution can be deployed to fulfill orders in multiple stores, using a hub and spoke model, fulfilling orders faster and at lower cost than manual picking. It also enables retailers to utilise excess space in larger stores. In the US, the retailer has partnered with Ahold Delhaize, Albertsons and Wakefern. Its first site went live last year with Sedando’s Supermarkets, a regional chain in Florida.

Source: Takeoff Technologies

$150m, 50 site order

In partnership with KNAPP, a leading warehouse logistics and automation firm, the companies have confirmed a $150m, 50 site order. This marks a new stage of development for the partnership and a significant roll-out of the technology. Future installations will feature the latest iteration of the solution which optimises the space needed for order sorting and adds flexibility to the design of the fulfillment centre.

Accounting for $1bn ecommerce sales

While Takeoff Technologies has not disclosed which retailers it will be working with on the accelerated roll-out, it is expected to account for $1bn of ecommerce sales. By the end of 2020, the company expects to have accumulated at least $2bn in gross merchandise volume for its retail partners.

Building a pathway to profitability

With the channel set to grow to $60bn by 2023, retailers in the US are focused on building a pathway to profitability. Most are focusing on the two major cost elements, picking and delivery. Several different fulfillment solutions are being tested or rolled-out. These include traditional store-based picking, including on-demand, crowd-sourced models. Most retailers have partnered with companies such as Instacart and Shipt to offer same-day delivery and scale-up their operations at pace.

Recently, Ahold Delhaize launched a hybrid dark-store concept, while Kroger is partnering with Ocado to develop automated customer fulfillment centres. Walmart is also testing its own hyperlocal fulfilment solution in partnership with Alert Innovation.

Providing customers with options on cost and speed of delivery

Ultimately, retailers are likely to settle on a range of different fulfillment solutions. This will be driven by a need to serve customers in both urban, suburban and rural markets and provide them with different choices in terms of the cost and speed of delivery.

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Presentations

10/04/2019
Walmart is partnering with Google to offer voice ordering capabilities for its online grocery shoppers.
08/04/2019
Key highlights in this new concept supermarket include fresh, meal solutions, value, ambient category execution, ecommerce fulfilment and a community focus.
08/04/2019

We review Ocado's current performance, its growth forecasts for the next five years, plus progress against key strategic objectives.

Included in this report:

  • Ocado's five year sales forecast
  • Ocado's strategy
  • Ocado's international agreements
  • Ocado Smart Platform innovations
  • Ocado's fulfilment and delivery operations
02/04/2019
New York City-based Caper has developed a customised shopping trolley (cart) that scans products as shoppers put them in the trolley, so shoppers don’t have to waste time at a checkout.
View all presentations

Key Presentations

This in-depth guide to USA explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

Following a year of accelerated change in the North American grocery market, we look at the five key trends set to shape it in 2019.

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We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type.