Shopping Centers Today

NOV 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Kroger, for its part, announced last December that its gro- cery pickup service was available at 1,000 stores. This past August the chain announced plans to bring grocery delivery to about 1,600 stores through a partnership with third-party provider Instacart. That same month Kroger and Nuro, a startup that bills itself the maker of the world's first driverless delivery vehicle, announced the launch of a grocery-delivery pilot program in Scottsdale, Ariz. This past July Walmart announced a similar partnership with Waymo, formerly known as Google's self-driving-car project. But McKeska says grocery chains are probably still years away from being able to offer grocery delivery at a price that most shoppers are comfortable paying. "Because of what you have to charge people to make it pencil out, delivering fresh product, in particular, is a very difficult business model to implement profitably and on a wide- enough basis," said McKeska, who formerly headed real estate operations for Southeastern Grocers and SuperValu. By contrast, he says, click-and-collect is already available at low cost to consumers and is likely to grow in popularity. "That is really what Walmart, Kroger and others are begin- ning to bet on," McKeska said. In a global consumer survey published in September by supply-chain company JDA Software and logistics compa- ny Centiro Solutions, 30 percent of the 2,000 surveyed U.S. respondents report having used either grocery delivery or pickup at least once. Some of the respondents cited headaches with both click-and-collect and online delivery, such as being notified that items they had ordered were no longer available. This highlights the reality that running a click-and-collect program is far more complicated for retailers than simply setting aside a few parking spaces, says Benjamin Conwell, head of Cushman & Wakefield's e-commerce advisory group. "For 'buy online, pick up in-store' to be successful, one of the most important performance indicators is having what I call an airtight inventory-management system," he said. The requirement should be to never disappoint a cus- tomer by taking an order and then sending a text or an email apologizing for having run out of whatever it was the customer ordered, Conwell says. For a retailer, the cost of disappointing customers in this way can be high, he notes, especially if the customer has actually driven all the way to the store to pick up the item. Without a robust infrastructure for inventory tracking and online-order fulfillment, running a click-and-collect program is high-risk, he argues. "It's like working without a net." These challenges include figuring out how to optimize labor on the shop floor, says Conwell. One mode of click- and-collect programs typically requires salesclerks to fan out, pull items off the shelves, double-check orders for accuracy and then bring them to a parking space, locker or custom- er-service area, he asserts. "That's a task that, even five years ago, retailers did not have on their radar screens," he said. In a worst-case scenario, employees putting together N O V E M B E R 2 0 1 8 / S C T 39

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