With so many food retailers tiptoeing around online grocery shopping services, Target and Walmart have both taken giant steps toward delivering for mainstream America. Target just announced it is partnering with Instacart, offering one-hour delivery to Minneapolis-area shoppers. And Wal-Mart Stores is expanding its grocery pickup service to five new Neighborhood Market locations in Arkansas, which allows customers to pick up orders in store parking lots. (That program is already testing in Phoenix, Denver, and Alabama.)
The services — popular in much of the world and already a happy reality in a few U.S. cities — still account for less than 2% of grocery sales, according to the latest estimates from Willard Bishop, a retail consulting company based in Barrington, Ill. But they have big appeal for younger shoppers in urban markets. Whole Foods began its Instacart partnership last year, and already delivers in 15 markets, for example. And Amazon Prime Now has expanded to Manhattan and Brooklyn in New York, as well Atlanta, Austin, Baltimore, Dallas, and Miami.
But while local retailers are also sharpening their efforts — the Minneapolis Star-Tribune reports that Cub Foods has also just launched an Instacart program in the Twin Cities — retailers have found that offering the services in America’s vast suburban areas is daunting.
“Our goal is to make grocery shopping easier and more convenient,” says Jason Goldberger, president of target.com and the company’s mobile unit, in its announcement. “Our team is constantly listening to guests’ needs and looking for new ways to help them shop Target wherever, whenever and however they want. Instacart is a leading player in this space and we look forward to seeing how guests in the Minneapolis area respond to the service.”
In addition to groceries, the company is also emphasizing baby products, as part of its efforts to bond with Gen Y parents, and says that while this test initially includes just its Minnesota hometown, it is “exploring plans to expand into additional areas and markets.”