Dive Brief:

• H-E-B has named Favor Delivery CEO Jag Bath to the newly created role of chief digital officer, according to reports. Bath will continue to serve as the chief executive of Favor, the on-demand delivery company H-E-B acquired in February.
• H-E-B currently offers home delivery in select markets through Instacart, Shipt and its H-E-B To You platform. It also offers curbside pickup in about a quarter of its stores, and hopes to double the number of locations that offer that service by the end of this year.
• “Our primary goal is to enable our customers to shop, pay for and receive their products in whatever way they choose – all while delivering an exceptional customer experience,” said Martin Otto, H-E-B’s chief operating officer, in a prepared statement.

Dive Insight:

In addition to a fast-growing delivery service, H-E-B scored a top digital mind when it acquired Favor earlier this year.

Jag Bath has held executive roles with a variety of retailers and services. As the director of global business development at WeightWatchers.com, he launched the company’s subscription service in China. While he was at digital marketplace RetailMeNot, he helped attract 700 million mobile and site visits and facilitated $4.4 billion in sales.

The announcement is similar to others that have recently taken place as grocers name top tech talent to guide them through the digital transformation. Last year Albertsons named Narayan Iyengar, a Disney veteran with 20 years of experience, as its head of digital marketing and e-commerce. Around the same time, BJ’s Wholesale Club named Rafi Masood, who held top positions with Dick’s Sporting Goods and Sears, as head of its digital division.

Why would rising stars like this come to the supermarket industry? The answer seems to be that they’re drawn to the disruption in the space.

“This is where the action is,” Iyengar said during a panel discussion at the Shoptalk retail conference back in March, when asked why he left Disney for Albertsons.

For its part, H-E-B must hope Bath can help ensure the chain remains Texas’s most beloved grocer even as it moves online and embraces new technology. This won’t be easy, considering the pitched battle in cities like Dallas, where Instacart, Walmart and Whole Foods have all recently converged.

But H-E-B, like Wegmans and Publix, has some of the most loyal customers in the business — and not just because it has deep roots in Texas or because it offers great customer service. It’s also an incredibly innovative company.

The Favor Delivery acquisition is a great example. Just as Target, with its Shipt buy, picked up a service that can contract out to other retailers, H-E-B bought a service that can pump up its e-commerce operations while also making money for the company on the side. The delivery service market is crowded, with everyone from GrubHub to Uber Eats and Deliv duking it out in profitable markets. But with online ordering set to grow rapidly in the coming years, there could be plenty of room for Favor and H-E-B to profit.