- Publix is testing curbside pickup at two Florida stores in Wesley Chapel and Valrico, the grocer said in a statement. It plans to add Atlanta-area stores to the trial later this year.
- The regional grocer started rolling out grocery home delivery in partnership with Instacart last year. The service will be available in 90% of its 1,155 locations by the end of the year. It plans to have home delivery available at all its stores by 2020.
- “We’ve had great success with Publix Delivery powered by Instacart, and the demand for online grocery services has continued to grow. So we’re excited to test Publix Curbside and learn more about how to best meet the evolving needs of our customers,” Maria Brous, director of media and community relations with Publix, said in a statement.
Publix has been slow to pull the trigger on e-commerce compared with some larger grocers. The regional supermarket chain finally began testing home delivery with Instacart last year. Since then, it has aggressively rolled out the service to the majority of its stores. The retailer is expanding its online services to include curbside pickup, albeit in only two Florida locations. More stores in the Atlanta area will begin trying Publix Curbside before the end of the year.
Publix’s e-commerce expansion reflects a growing consumer demand for online ordering and delivery — and the retailer needs to figure out how to get there. Ease of use, convenience and time-saving aspects are tipping the scales in favor of grocery shopping online versus in-store, according to the Retail Feedback Group study. Online grocery sales are growing by 25% per year, according to a study from consulting firm Brick Meets Click. The average number of e-commerce orders per store, meanwhile, is up 20%.
Publix, along with other grocers such as Wegmans, Smart & Final, Schnucks and Sprouts Farmers Market, are taking part in what’s seems like a mad dash to upgrade e-commerce capabilities. But Publix’s decision to test curbside pickup service was no doubt heavily influenced by the competitive pressures it's facing from the likes of Walmart and Kroger, which are both actively expanding their click-and-collect programs, along with the looming threat of Whole Foods under Amazon.
In Publix’s home state of Florida, Walmart operates close to 400 stores and has rapidly expanded its click-and-collect services. Within the next few years, the company hopes to have curbside order pickup available at all 4,600 locations nationwide, putting pressure on many competitors to respond.
Publix’s northward expansion into the Carolinas, Tennessee and Virginia also puts it in the competitive crosshairs of Food Lion, Kroger and Kroger’s Harris Teeter division, all of which are rapidly expanding their e-commerce programs. Kroger’s ClickList, in particular, is a popular convenience play coming from a close competitor, which has no doubt pressed Publix to act.
Still, some execution and operational hurdles are to be expected as Publix rolls out its curbside service. For now, profit is elusive thanks to high overhead costs and the inefficiency of last-mile delivery. Getting high-margin perishable products on an order list remains a challenge since many shoppers still want to see and touch their meat and produce before they buy it. And it remains to be seen whether in-store fulfillment using associates to assemble the orders is a workable model. On top of all this, a recent Morgan Stanley study found consumer dissatisfaction with online grocery shopping is increasing.
It’s important to keep in mind that this is still the early days for online grocery. As time goes on, retailers will learn how to make order fulfillment more efficient and effective, including better execution of last-mile delivery. Despite the many challenges, retailers really have little choice — grocery e-commerce is a reality.