This Industry Is About to Be Disrupted

The industry most ripe to be disrupted? grocery. As we've said before 20% e-commerce penetration has been the tipping point for sectors including books, sporting goods, toys and consumer electronics. Bottom line: once a fifth of shoppers are online, shit gets real for the sector. The US grocery market has been a slow mover, but is catching up fast. More than 20% of US consumers have already purchased groceries online. However, estimates suggest that within five to seven years, that number will reach 70% propelling online grocery to a hundred billion dollars. Grocery stores desperately need to get out of the 80s once you fill that first basket up. Online, you tend to only manicure around the edges. Amazon's share of online grocery stands at 18 percent. We predicted Amazon would begin to overlay their operational expertise and zero percent ROI hurdle and consumers would see prices drop and that is exactly what has happened. Although in-store prices at Whole Foods are 14 percent higher than Kroger, Whole Foods is making an aggressive play for home delivered goods through Prime Now, which comes in two to seven percent less expensive than Kroger goods delivered through Instacart. That's right, Whole Foods for less than Kroger - that's a Mercedes for less than the price of a Toyota Camry. As grocers were sitting on their hands with regard to home delivery Instacart filled the void and is the first result in paid and organic searches. Relative search volume for Instacart is two and a half times that of Amazon Fresh and more than half of brands with stores in our grocery Digital IQ Index partner with Instacart. These partnerships have been the growth engine for Instacart, now valued at 4.2 billion dollars. However, grocers using Instacart are not playing for the long game and are outsourcing a key core competence with respect to building shareholder value. What do Borders, Toys 'R' Us, Circuit City and Target all have in common? They outsource their e-commerce to Amazon. Instacart allows customers to easily switch between grocers, diminishing grocery store brand loyalty except for those grocers who have partnered with Instacart to build dedicated sites. Who else loses as Amazon muscles its way into the grocery landscape? Simple - food delivery kit services. Blue Apron is a broken IPO - what is Blue Apron worth? Is it worth zero? That's a little harsh - it's worth less than zero. This business model makes no sense. I don't grocery shop very often so my team - no joke - decided to play a game with me. Sushi or donkey droppings? I'm going to guess $4.99. Foie gras! I would guess - all-natural, real vegan, faux gras, 8 ounces - I don't know, I have hash that looks like this so I'm gonna guess it's expensive, I'm gonna put this at $27.99. Everyone Nourish Shampoo - yeah, funny, hilarious guys. Active Once a Day Men's 50-plus - hey bitches, I may be 53, but naked eye look 52 and - 52 and seven-eighths! I'm gonna guess $7.99. Health Aide Kombucha - wait there's a - what's going on here? Do you know something I don't? Am I dying? Is the ass cancer finally here? Flow 100% naturally alkaline spring water - Flow Water. I see this and I get the sense it would probably be good for my prostate and improve my stream so I'm gonna say again - any price whatsoever. When I pee now it's like a baby bottle dribbling - my seven-year-old? It's like a firehose - I mean he could seriously break down a wall. We'll see you next week.

Channel: Gartner for Marketing

Views: 321,012

Keywords: Scott Galloway, L2inc, Winners & losers, Digital marketing, Social media, Ecommerce, Mobile marketing, Marketing news, Business news, Internet news, Tech news, Social Media news, Digital research, Business intelligence, Digital trend, Market trend, Brand strategy, ted talk, tedx, leo laporte, twit, this week in tech, grocery, the price is right, guess the price

Id: uQL1ZAOv5ns

Length: 4min 35sec (275 seconds)

Published: Thu Apr 26 2018