Dive Brief:

• Subscription-based online grocer Hungryroot has revamped its website and onboarding survey to offer more personalized service to its members, according to a press release. The company, which delivers weekly orders along with tailored recipes, builds a shopping list and meal ideas for customers using a proprietary algorithm that incorporates taste preferences, dietary restrictions and other factors.
• Hungryroot is also adding emerging food brands to complement its portfolio of around 100 own-brand products. Banza, RightRice, Beyond Meat, Freshe and Ozery are among the new offerings the company will make available, and will comprise 30% of its weekly offerings.
• Meanwhile, online grocer Move announced it will launch nationwide in February 2020. The e-grocer, which opened a beta version under a different name in 2017, will offer around 100 products along with free two-day shipping. The members-only service, available for $95 a year, will also assign each customer a "personal shopper" who will field any questions, help with ordering and offer product suggestions.

Dive Insight:

For online grocers that don't offer the same in-person contact and sensory experience that brick-and-mortar retailers do, personalized service is crucial. 

Chai Mishra, CEO of Move, told Grocery Dive its members will receive the name, phone number and email address of a personal shopper who is available to help them 24/7. He likened the individuals to account executives — company reps that offer an elevated level of knowledge and customer service.

In testing, Move found that adding personal shoppers significantly reduced customer churn. Add to that a carefully selected assortment and personalized online interface, he said, and the company has positioned itself to become a one-stop shop.

"The retention we were seeing was an order of magnitude better than any meal kit company," Mishra said.

Move will launch with around 100 products from 50 producers and aims to steadily expand to 250 products by the end of next year. The plan is to gradually move into nonfood items like housewares and cookware. All of Move's products are under its own label — similar to Hungryroot and online grocer Brandless.  

Mishra said Move will open with 10,000 members and gradually increase its cap over time. This allows the company to keep pace operationally, he said, while still hitting its service goals. To spread the word, the company will focus on digital advertising and offer referral perks to its existing members.  

Move and Hungryroot offer something different for health-minded consumers turned off by the traditional grocery experience. But many e-tailers have struggled to gain and retain shoppers. Brandless, which launched in 2017 with an assortment of food, home and beauty care products, also touted high-quality products and low price points. It has since endured an executive shakeup and been forced to abandon its uniform $3 price point. Other online grocers from Good Eggs to AmazonFresh have had to rein in formerly ambitious expansion plans.

One solution for Move: physical stores. In late 2020, the company plans to open a store in San Francisco that offers many of the same products it carries online. The location will be about 5,000 to 8,000 square feet, members-only and will offer checkout-free transactions similar to Amazon Go, Mishra said.

Perhaps most importantly, the store will also serve as a distribution center, unlocking expedited delivery to customers within a 45-mile radius. Move plans to open as many as five additional locations in 2021. Where those locations will appear will be determined by where its members are, Mishra said.

Driving traffic to a new members-only store promises to be an uphill battle, but the locations offer the sort of hands-on experience customers can't get through e-commerce. Instead of cashiers and baggers, Move's stores will have personal shoppers on hand to recommend products, answer questions and offer samples.