- iGrabit, an artificial intelligence-based online grocery platform for small retailers, is now offering a subscription service it calls "Amazon Prime for independents," according to Winsight Grocery Business. The program allows participating supermarkets to give 5% or 10% discounts to shoppers who order groceries online for pickup at partner stores when they pay a monthly subscription fee.
- Trident Supermarkets of Miami Beach and Happy Foods of Chicago are reportedly considering launching the subscription program, and would charge $4.99 per month for a 5% discount or $9.99 per month for a 10% discount.
- iGrabit founder and CEO Prem Balwani believes the new subscription will help independent grocers to bolster customer loyalty and better compete with major e-commerce players such as Amazon and Walmart.
As Amazon continues to gain traction in the grocery space, supermarkets of all sizes are racing to implement technology that can match, or at least emulate, the e-tailer's e-commerce capabilities.
Online food shopping is expected to become a $100 billion business by 2022, according to Nielsen and the Food Marketing Institute, and 70% of shoppers are expected to buy their groceries online at least occasionally by that time. This shift in consumer expectations is putting pressure on traditional supermarket giants like Kroger and big-box stores like Walmart, which have doubled down on technology that can deliver competitive omnichannel experiences. But is an even bigger challenge for the retail underdogs: independent grocers.
Few of these small chains boast the click-and-collect programs or delivery services that their mainstream rivals offer, and growing consumer demand for convenient, customizable shopping experiences could make these inefficiencies a major Achilles heel. But vendors like iGrabit, Rosie and GroceryKey have stepped in to offer services like web development, click and collect and even meal kits in order to keep pace with larger players.
Sixty-four percent of local grocery store shoppers are very or extremely satisfied with their supermarket, according to the National Grocers Association, and 80% of these shoppers prefer their independent store to online competitors. This kind of loyalty is hard fought in the increasingly volatile grocery industry, and likely stems from the convergence of independent values with consumer demand for authentic experiences, local products and personalization. While large chains are turning to data analytics to deliver the product mixes, prepared foods and other amenities their customers demand, local stores have been able to keep their finger on the pulse of their communities thanks to their small size.
Still, it's unclear what level of digital prowess customers expect their local supermarket to have. As more businesses partner with platforms like iGrabit and Rosie, it will be interesting to see if shoppers are willing to pay a subscription fee to order their local store's products online, rather than shop multiple retailers to meet their needs. It's possible that because these stores' assortments are so tailored to their communities, online shopping capabilities could make them a truly one-stop-shop for their customers.
Independents shouldn't lose sight of their strengths as they make digital transitions, however. Small stores will never be able to match the digital offerings that Amazon and the large chains can provide, but when coupled with quality customer service and niche product selections, even small steps like investing in website upgrades, smart phone apps and offering the same products online and in-store could help independents grow.