In today's episode Phil interviews Nick Nikitas, CEO and co-founder of Rosie. Rosie is a locally focused e-commerce company where shoppers can find and discover anything they might want to buy from local stores.
Welcome to Lost in the Supermarket. This is a very special edition of Lost in the Supermarket. We're going to be talking about what the grocery world looks like post COVID what's gonna happen this fall. What's gonna happen after that with me is Nick Nikitas CEO and cofounder of Rosie. Rosie is a locally focused eCommerce company where shoppers can find and discover anything they might want to buy online from local stores, Rosie partners with leading independent grocers and their wholesalers to provide e-commerce livery opportunities on their channel marketing and deep data services. Nick, welcome to Lost in the Supermarket.Nick:
Thanks Phil. It's great to be here.Phil:
So I guess my, my first question , uh , that all of our listeners and me want to know about , uh, what happens this fall in winter from a retailer standpoint and how will it impact wholesalers brands? You know, just everybody who consumers, everybody who cares about food.Nick:
Sure. Well, first off the traditional holiday routines, Halloween, Thanksgiving, and Christmas will certainly be disrupted by the pandemic . These are traditionally the biggest selling weeks for retailers, and they need to be planning now to start creating holiday solutions that will not only help their shoppers cope, but deliver enough sales to meet or exceed last year sales. Now, when I say need solutions, everybody is going to be focused on how do I stay connected and make the holidays great, or, or at least as normal as possible for my family during COVID-19. And so this could be anything from gift baskets to catering, to other options, to make the family feel connected during this time, retailers have to be sensitive to this need. They can't just be selling items on the shelf to solve that core problem for the shopper.Phil:
But the problem is also , um, that retailers start planning , um , especially for Halloween and Christmas and you know , all the holidays and super bowl , um, you know, a month later , um, six months in advance and typically they've got huge promotions. Um , again, I don't think we're going to see any free turkeys being given out this year , uh , from retailers, but , but they plan their promotions. And because of the disruption to the supply chain, especially in meat processing facilities, and you know, I'm talking about beef and Turkey and chicken and pork , um, they don't have any signs of stability where they can plan these, how are they going to get around that?Nick:
Well, I think at a starting point, you've got to reimagine what the holiday is going to look like this year. What we always talk about as a team is when , when somebody goes into a hardware store, they're not looking for a quarter inch drill bit, they're looking for a quarter inch hole, Right? And , and the point there is that shoppers have a job that they're trying to get done. And the job is feed the family, make it feel normal, make us feel connected. And so certain things that were traditions in the past, maybe like having everybody over for the holidays or even , uh , cooking together in the kitchen, that's just going to be way different this year . It has to be we're helping safety has become a paramount concern. And so I think that when retailers reimagine what the holidays look like, you know, for instance, a family may not be able to get together in its entirety this year as a result of the pandemic, social distancing guidelines and travel restrictions . So being able to send a gift basket to family members, or even a recipe that the family can, can remotely work on together at different households while staying connected through video chat or, or teleconferencing is going to be ways that this holiday is just so different from years before , um , Halloween is not necessarily going to be door to door this year. It may be trick or treating in the household , right? So, so there's going to be a huge shift. And I think the retailers retailers have to kind of rethink about it from the shoppers jobs to be done. So then ultimately, how do they create solutions for the various problems that the shopper's going to be solving this year? And so by starting with that, as the entry point, it's going to allow the retailers, I think, to create new creative ways to engage with their shoppers and be more important than, But we also, and let's talk about gift baskets for a moment. Um, we also have other outlying situations that the gift basket people, whether it be a supermarket or those companies and stores that just do gift baskets, a lot of the products , um, typically in gift baskets have been imported . We have this situation now with, with very high tariffs on a lot of imports, especially from the EU, especially from Italy and France. Um, how, how are retailers going to be able to get around that? Because what we're going to look at is we're gonna look at gift baskets that might have been 25 or $30 now having to double in price. I think what we've seen is around holiday spending is that shoppers will, will spend it . It's a different mentality that goes into shopping for around events. And there is around just pantry stock, and also, you know , keep in mind too that a lot of the traditional money that has flowed out of the retail sector into eat out restaurants or fast casual is now going back in that space. I think, again, it comes down to look , we've seen prices increase across the industry , uh, as a result and also a corresponding reduction in , in trade discounts, going from the brand for the store . So, I mean, prices have been going up and get consumption from the retail sector, continues to rise because ultimately I think shoppers are going back to the places that they know and trust they're shopping local. They want to be connected with their community. So when you think about that gift basket, right, things that go in that basket are not necessarily going to be national brands , they're going to be local products. They're going to be specialty goods. They're going to be things that connect that person to their community. And I think it's going to be more fresh orientation than ever. So , um , that's kinda how I, I see that retailer putting together that, that gift basket. And I think that whether it's gift baskets or meal solutions, I mean, we were seeing meal solutions , uh , as a response to people that were on the go or busy at work needing that kind of three to five items , uh, pre pre-assembled , ready to heat, ready to eat solution recovered . Now it's even more important than ever because people are coming back into their homes and saying, well, I have this kitchen, I've got to find different ways to cook in it. Uh, find different ways to kind of prime that for the family. So if the stores are starting to , to not just sell ingredients on shelves, but they're , they're helping to teach that eating customer how to become a cooking customer. Right .Phil:
Yeah . So let's talk about the shelves. Um, you know, COVID-19 has changed the grocery world probably forever. Uh, but , but certainly this is something that no grocer saw coming, no Crozier was prepared for. Um, and you know, for the first time in most of our lives , um, maybe there there's, you know, some, you know, a hundred year olds who experienced this before, but for the first time for most of us, we walked into a grocery store and there were empty shelves and that's freaked out a lot of people and obviously led to them hoarding and , and still in some cases , uh , hoarding and it led to, you know, retailers putting limits on toilet paper and paper towels and bleach and things like that. Um, what are, what are some of the key takeaways that you've noticed , um, and what should retailers be thinking about next?Nick:
Well, look, there's no doubt the pandemic was a big curve ball for the entire industry. I mean, especially, I mean, e-commerce moves from a demand constrained world that is people's trying, having to shop online and try for the first time to a supply constraint world. And those supply constraints, as you mentioned, first and foremost was inventory. And then the second one was labor. I mean, at the height of the pandemic in late March, we were seeing out of stock rates in stores, which had traditionally been somewhere between one and 2% for eCommerce skyrocket to above 30% as supply chains were w were stretched to their limits and stores that would maybe typically see three trucks a week. We're now seeing one truck that was 60% full. And so , so as you mentioned, some of those, some of those supply limitations were put under stores, but I think what, what retailers started to do, and we were, we're using this as we were starting to build real time data intelligence around what was available inside the store, and then having mirror on the online shopping sites . So we were getting real time inventory information from the personal shoppers in the store, and then updating that inventory on the site to reflect that, and that reduced the out-of-stock rates dramatically during that period , uh , which allowed shoppers to have a better fill rate than ever, you know, retailers also really, really started to innovate on the labor side as well. Uh , stores were, were, would start picking their eCommerce orders the night before which dramatically increased their, their labor supplied . And they were able to speed up the picking of those orders by picking them in like a midnight shift. And the other thing that the stores did a lot on our platform was you multi-dose zone or batch picking, or you would pick multiple orders at the same time. So they could really, really grow their eCommerce operations . So I think this has had created a lot of innovation in this space.Speaker 3:
Another big takeaway is that digital merchandising became more important than ever. I mean, how do grocers up sell products online to the digital customer when they're not coming in store this whole discussion of what the digital end cap looks like became really important because you couldn't do the same, you know , creative merchandising, things that you would normally do in the retail environment. You had to figure out ways to do that online. So whether it was promoting certain products, creating beautiful announcement panels, or other email marketing communication out to their guests, retailers started to develop these digital merchandising muscles that I think will serve them really well long after this is over consistency became key. I mean, shoppers starting to come back again and again for the retailers that could get their orders, right. Each and every time. I mean, we know that if you order on Amazon, that's typically an order with less than five items in it.Nick:
A grocery order is going to have somewhere between 26 and 50 items in it on an average basket. And so getting those right for the customer became really important and services like Instacart and ship had some attrition issues during this period because orders were not being satisfied to , to what the guests wanted. I mean, you were seeing issues where a red bell peppers were being substituted with apples and things like that. And that just was a negative experience. And so I think like in it , through and through brand became T uh , retailers needed to make sure that the services they were providing or the quality of the shoppers expect from them, you know , just dishing off the responsibility to any of eCommerce to a third party. Doesn't believe that retailer have the responsibility to deliver the service their shoppers expect from their brand. So I think the big takeaway from me from the whole pandemic is how does the retailer ensure that they take control of their destiny shoppers rust online to solutions to solve their immediate need, which was health and safety, but going forward, how do they ensure that their eCommerce service is the one that the shopper's going to select when they have more time to evaluate their options?Phil:
So, Nick, we've got time for one last question. Um, and I want you to look into your crystal ball. What's the one thing, just one thing that every grocery retailers should be focused on right now to make sure that they're still in business in 10 years from now.Nick:
Yeah. Yeah. Well, well look, prior to the pandemic in commerce was around 5%. Now it's around 30% and I expect the folks who converted from brick and mortar to e-com are going to go back to brick and mortar, but not all of them. And I think about half of new online shoppers have already changed their habits and that we're going to continue to grow from here. So you're looking down the road in the crystal ball of where we're going to be in the next 10 years in a more Omni commerce , uh , more social going to the store. It's going to be more to that event and the experience, and it has been the past. It's going to be more local customers are gonna care about the products that they can't get anywhere else. So definitely be more fresh, more progressive. I mean, look, the groceries that got through this period and survive and thrive are going to be able to differentiate a new ways around selection, service, and value . And then ultimately I think it's going to be more personal. I think that, you know , this idea of Netflix for grocery, like how do I have what customers are now used to when they shop online is a storefront that is completely customized to their needs and personalized to their needs. They're going to expect similar levels of personalization when they head back to the store. So it's an exciting time for those that are adapting and change to the new norm.Phil:
Nick Nikitas. Thank you. Uh , if people want more information, just go to Rosie app.com and you can sign up for a free account and everyone be safe, be well. And Nick, thanks so much for joining us today.Nick:
Thanks again, Phil. Appreciate it. Take care.