What Is The Right Grocery Investment Strategy For Retailers?

Supply Chain
Written By Rick Watson

Kroger is opening its first automated Ocado facility. The big question is - at 350k sqft a pop, is it the truly right investment?

Who will make more money here? Ocado surely. I just can't work out how Kroger will make it up in volume on 20 $55M facilities. That is a lot of automation WITHIN the facility? What about when it leaves the facility? Are you discouraging curbside and store employee utilization? Will these massive facilities just become a fun back-end for Instacart?

Target has already paved the way here folks. Invest in stores, not in these massive separate facilities. I can't even work out when they last added a store greater than 40k sqft - optimizing the deployment of inventory closer to consumers and creating a Target brand experience. These automated facilities do neither of these.

Walmart I think is (smartly) trying to thread the needle between the Target strategy and the Kroger strategy - micro fulfillment attached to the store, not in a centralized facility. The big question with Walmart, is their pace of innovation - can it be done in time?

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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