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Ask The Hartmans:

Is Picking From Brick and Mortar Grocery Stores Profitable?

online grocery deliveryAfter our recent HartBeat on Instacart and the Sharing Economy, a reader wrote to us asking "Is anyone making money doing this picking from brick & mortar grocery stores?" 

The reader was referring to the HartBeat that describes how Instacart drivers are paid to deliver grocery items they’ve picked from grocery stores. In terms of profitability, we believe it's not currently clear who exactly profits from the "pick and deliver" grocery delivery model: As a startup, Instacart is still perfecting its business model. 

We do know a January 2015 Wall Street Journal article notes "Fairway Group Holdings Corp., which operates a chain of grocery stores in the New York City area, said it has added new customers as a result of its eight-month-old partnership with Instacart," indicating that "pick and deliver" is potentially a plus for retailers since it represents the potential to generate new business from customers who are either too busy or somehow precluded from shopping in their stores physically. Overall, whether it's click and collect, pick and deliver or pure online grocery delivery, it's important to remember that shoppers today are increasingly digital in nearly all aspects relating to food. 

So "making money" likely extends conceptually to offering at least some form of digital grocery ordering in an effort to both add customers and avoid losing business. This would include some form of outsourcing (e.g., Instacart) or developing some form of click and collect or home delivery services. 

Further reading:

The Sharing Economy Is Now Invading Our Kitchens

Instacart: Why Investors and Shoppers Are Warming Up to Food Tech Start-ups

Categories

Retail/Shopper Insights Technology/Social Media Point Of View


FOOD SHOPPING IN AMERICA 2017

As leaders in the study of American food culture, The Hartman Group has been tracking how Americans shop for food since the 1990s. From one-stop shopping to multichannel shopping to online markets and click-and-collect, we continue to track consumers’ evolving perceptions, needs, habits and relationships with food retailers. New to the 2017 report is a special section on the expansion of the discount grocery channel, the emerging fresh-format channel and smaller-footprint retail formats.

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