San Antonio Express-News (Sunday)
H-E-B SHARE
that’s very unique,” Kilcourse said.
The company is also known for its clean stores, customer service, localized and quality products, and low prices, Hauptman said.
“They might not have been the first but because they’re so buttoned up with their traditional supermarket offering, they’ve been in a position to lead by doing a great job of carrying that through to e-commerce,” he said.
H-E-B declined to make any executives available for an interview and did not respond to questions by press time. Walmart also did not respond to an inquiry by press time.
In its market-share survey, Chain Store Guide evaluated the San Antonio-New Braunfels statistical area, which includes Atascosa, Bandera, Bexar, Comal, Guadalupe, Kendall, Medina and Wilson counties. Its figures include in-store, curbside pickup and delivery sales.
Pandemic-spurred rush
Retailers were already making investments in curbside pickup and delivery, spurred in part by Amazon’s success. But the pandemic intensified their focus on those options as customers who were worried about exposure to the virus turned to online ordering.
“The data that we had indicated that retailers were in no particular hurry, and then COVID hit and everything wildly accelerated,” Kilcourse said. “The place where we saw it the most was grocery.”
After the initial rush to bolster services, grocery chains are now going back to improve those options, he said. It’s expensive and difficult.
They have an assortment of products that move fast, many of which are perishable. Also, much of their inventory is managed by vendors. They have to be able to see what’s available, so a customer doesn’t place a curbside order
for out-of-stock items.
Then there’s the online experience. For example, if a customer is missing an item in their order and calls the grocer for a refund, the employee handling the call needs to be able to see what happened.
“A lot of grocers don’t have that level of real-time intelligence about the customer experience,” Kilcourse said.
Picking, packing and delivering items also requires labor. At a store, a customer chooses, carries and often bags their groceries. With online orders, employees are handling those tasks.
“They’re doing an awful lot of work that they used to not do — and, of course, that costs them money,” Kilcourse said. “That’s where automation starts to come in.”
Retailers are devoting more store space to refrigerating online orders and storing popular
items that can be grabbed quickly. “Pickers” with hand-held scanners pull carts through aisles, grabbing items and texting customers if something is out of stock.
“The technology and the physical space have merged together,” said Bob Young, executive managing director at Weitzman, a Dallas-based brokerage firm.
Companies are acquiring technology that provides a more personalized online experience, with product recommendations, promotions and recipes tailored to individual customers, Hauptman said. They also are adding new systems to make the process of picking orders more efficient and to lower delivery costs.
“The costs are significant,” Hauptman said. “However, we’re past the tipping point where online grocery could be considered nice to have for supermarket retailers. It’s really now table
stakes or need to have.” Spieckerman agreed.
“They have to be in the business of providing choice, even if some of those choices strain their bottom line,” she said. “We’ve gone from building out the options to now it’s really the race for speed.”
As the pandemic has eased, customers have returned to stores. But experts think at least some will continue using curbside and delivery services because of convenience.
“Consumers have learned that there are all kinds of new and convenient ways to shop, and they’re going to do it,” Kilcourse said. “One thing that people never have enough of is time.”
Last year, Inmar asked 1,000 survey respondents if they would go back to shopping at grocery stores after vaccines were widely available. Twenty-eight percent said they would stick with online
ordering, and 27 percent said they would take a hybrid approach, shopping both online and in stores.
Personalizing customers’ online experience is likely to become a bigger focus for grocers, who are also using technology and training to improve aspects like selecting produce, Hauptman said.
“The pandemic’s forced shoppers to try something that’s been around for a while and really just accelerated the expected evolution of online grocery shop,” he said.
Still, even as H-E-B plugs more resources into pickup and delivery services, it has continued adding stores. Locations are in the works in Cibolo and near Fair Oaks Ranch, and a store opened on the fast-growing far West Side in 2020.