Harris Teeter tests service for customers in an UberRUSH
Harris Teeter is going outside its comfort zone. The Kroger-owned grocery chain, which has offered online ordering and in-store pickup at its stores, is running a pilot program using the UberRUSH third-party service to deliver products directly to customers.
The test is being run through a Harris Teeter location in Washington, D.C. and is only available to customers within a five-mile radius of the store on 1201 First Street NE. Customers can order from the entire store inventory using Teeter’s mobile app. The desktop version doesn’t include delivery at this point.
To place orders, customers select delivery at the checkout. An UberRUSH driver is then dispatched to pick up the customer’s order at the store. From there, the drive delivers the order to the customer’s front door. Customers receive updates to keep them informed of the driver’s progress, similar to Uber’s car service.
“Harris Teeter is excited to enhance the online ordering process by offering home delivery,” said Danna Robinson, communication manager for Harris Teeter. “UberRUSH delivery will help us reach our customers where they are by making the grocery shopping experience even more convenient.”
Discussion Questions
DISCUSSION QUESTIONS:
What do you predict Harris Teeter will learn from its test of the UberRUSH service? Will the service draw customers from those using the chain’s order online/pick up in-store service or will they be a new group?
Poll
BrainTrust
J. Peter Deeb
Managing Partner, Deeb MacDonald & Associates, L.L.C.
Ross Ely
President and CEO, ProLogic Retail Services
Harris Teeter has been known for the quality of its experience, as well as the quality of its foods. The first and foremost thing that Harris Teeter will learn is that consumers today judge the quality of their experience at EVERY touch point.
If the quality of the mobile app and delivery is not as good as reflected by the video, it will affect the consumer perception of the Harris Teeter brand and the consumer’s willingness to use the service.
And one more thing … quality delivery is NOT free. Someone pays for it. And if it is the consumer, the price, timeliness and accuracy of the delivery must create a perception of value that meets or exceeds the cost of service.
This test is so limited that it almost ignores many of the key data points which Harris Teeter needs to focus on (like timeliness during peak ordering times). Minimizing the service to just mobile devices and not desktops is both audience and device limiting as well. The reasons for this don’t quite seem clear and the information obtained will be minimized and distorted by these omissions.
Harris Teeter will need to expand this test to accurately gauge the effect on all of the business. Some cannibalization of order/pickup can be expected but the real data will come from the impact on the conventional shoppers. I have no doubt that there is a market for delivery. The better the quality of service the more customers will embrace it.
UberRUSH is another vehicle to address the “last mile” issue related to online shopping. This will be a good test to determine if this expands Harris Teeter market share or simply cannibalizes the order online/pick up in-store service. Regardless of market enhancement or cannibalization, UberRUSH takes visits out of the store, reducing the opportunity to create an in-store shopping experience and the accompanying add-on and impulse purchases.
The big question with home delivery of groceries is how the economics will play out and whether shoppers will be willing to pay all the additional fees. Presumably in this case the shopper will pay a fee for the in-store pick-and-pack and then an additional fee to Uber for the delivery. Is it worth it to pay up to $20 for this level of convenience?
Since Harris Teeter controls the pick-and-pack and Uber merely executes the delivery, Harris Teeter should be able to guarantee a high-quality experience for the shopper. This service should appeal to the highest end of their existing shopper base that is willing to pay for all the added convenience.
Relatively speaking, Harris Teeter has been in the business of shopping for their customers and providing them the option of picking the order up in the parking lot for quite some time. Extending this service to the doorstep makes perfect sense. My supposition is that new shoppers will begin to engage Harris Teeter through home delivery.
There are those among us that believe promoting this kind of service actually works to the detriment of Harris Teeter in that both their pickup service and now home delivery offering allows the shopper to buy without coming into the physical store, where they might purchase other impulse items.
My response to those with that point of view is simply this: Let the shopper decide when they want to come into the store and when they want to pay a premium for pick-up and/or delivery. If we are to believe that giving the shopper what they want instead of “what we want them to want” will ultimately win the day, I think Harris Teeter are well on their way to growing market share with this move. New shoppers and increased share of the shopper’s wallet are instrumental in retail growth and shopper-centricity is the catalyst for both. I believe UberRUSH is a step in the right direction.
Several things are coming to mind.
First, this is the future. Delivery will be an important part of any retailer’s strategy. Be it two-day, overnight or two-hour, delivery is part of the norm of doing business.
Second, the test market needs to be spread out among different demographics. Who’s willing to spend the money for the UberRUSH service? It’s not just who can afford it. It’s who needs it: people without transportation, people who are sick, the elderly, etc.
Third, there is a loss of personal connection. When a third party delivers, the amount of personal interaction may diminish to virtually nothing. Then the business becomes a commodity.
That it doesn’t pay…for them at least: HT is located in the semi-wilds of the Southeastern seaboard and doesn’t have the population densities and/or incomes for this kind of service. Maybe in New York or LA … you know, the Blue States.