- Meijer said it will expand its home delivery service thanks to its partnership with Shipt, according to the Shelby Report.
- The expanded service will take place in the retailer’s six-state footprint, starting with Grand Rapids, Mich. and Fort Wayne and Indianapolis in Indiana. Meijer will follow into other major markets in Michigan, Illinois, Indiana, Ohio, Kentucky and Wisconsin.
- A membership for Shipt delivery service costs $99 a year, with unlimited free grocery deliveries on all orders more than $35.
Meijer tested out the digital home delivery service in Detroit last year and saw more than 65,000 orders placed in just six months. That was enough to convince the company that it was time to invest more into the service and expand.
Now seems to be the time to act. Nielsen’s “The Future of Grocery” report predicts ordering online for pickup or delivery will grow substantially from 12% and 9% of U.S. consumers who tried these options in 2015 to 55% and 57%, respectively, by end of 2017.
One of the ways Meijer is different than some others is that its retail stores are open 24 hours, so Shipt deliveries will be available at most store locations around the clock. That’s sure to appeal to a millennial generation that doesn’t live by the standard 9-5 mindset. A Shipt membership can select from 55,000 items across Meijer stores using the smartphone app or place orders directly through shipt.com.
Once a way for a retailer to differentiate itself from its competitors, home delivery and pickup services have become common in the grocery industry. Wal-Mart is spending a collective $2 billion in 2016-17 to offer home delivery and in-store pickup. In eight U.S. cities, the company offers free curbside pickup of online orders. Kroger, meanwhile, has rapidly expanded its Click List service, which also offers curbside order pickup, to more than 600 company stores. Other smaller retailers also are branching out into home delivery.
While click and collect services can offer low-margin grocers another revenue stream, its upside may not be as much as some think once issues such as labor costs and potential disruptions to other customers shopping in the store while items are collected is factored in.