Dive Brief:

• Meijer's home delivery service partnership with Shipt is available at more than 200 stores in Michigan, Indiana, Ohio, Illinois, Wisconsin and Kentucky. The retailer recently surpassed 500,000 deliveries and is on-track for more than a million deliveries by year-end, according to a company release.
• One reason for the service’s popularity is the combination of a "seamless digital shopping solution" with the company’s brick-and-mortar retail model, president and CEO Rick Keyes stated in the release. Customers using the Shipt app for the delivery service get Meijer sale prices and earn mPerks Rewards that can be redeemed in store.
• Meijer first trialed the service with Shipt in Detroit in September 2016. The cost is $99 per year with unlimited free deliveries on orders over $35. Orders under $35 are assessed a flat $7 delivery fee.

Dive Insight:

Shoppers increasingly demand the convenience of ordering groceries online. Today, 30% of digital shoppers say they spend about a quarter of their food budget online, according to a study from Nielsen and the Food Marketing Institute. During the next decade, the percentage of people doing their grocery shopping online is expected to more than double, with 72% of consumers forecast to conduct a quarter of their purchases online by 2025.

What’s more, people who shop using different methods — including online, mobile and visits to a physical supermarket — spend more than double those who only shop at brick-and-mortar stores, according to a Deloitte study on omnichannel shopping. From a shopper demand and customer retention perspective, as well as a competitive standpoint, offering an omnichannel experience is imperative in today’s evolving grocery sector.

Meijer now offers both curbside pickup as well as grocery home delivery in partnership with Shipt at more than 200 locations. "Our goal was to quickly bring a high level of convenience to as many customers as possible, so surpassing a half million deliveries is a great start as we continue enhancing this personalized customer-first experience," Keyes said in a statement. The CEO seems pleased so far with the Shipt arrangement, which is expected to top more than a million deliveries by year’s end.

Since Meijer supercenters combine a full grocery store with general merchandise, Shipt shoppers have 55,000 grocery, perishables and everyday essential items — such as health and beauty and office and school supplies — to choose from. This is more than a typical grocery store offers, which averages 38,900 SKUs, according to FMI data. And since stores are open 24/7, customers have a lot of flexibility when their orders can be delivered, which gives Meijer a competitive edge.

As an added bonus, Meijer shoppers now earn mPerks Rewards when using Shipt. The mPerks loyalty program is widely popular among Meijer shoppers since its flexibility and gamification component enables customers to earn rewards in a variety of ways, and then gives shoppers the option of a number of rewards to choose, including a discount off of a future grocery purchase or dollars off at Meijer fuel stations. Tying Shipt into the mPerks program is a smart move on Meijer’s part — if a grocer offers a loyalty program, it’s probably a shopper expectation.

The success of the Meijer-Shipt partnership could be a model for other grocers whose food delivery programs are struggling to gain momentum, or those who are long over-due starting their own.