Kroger pilots same-day furniture delivery

Diving letter:

  • According to a press release, Kroger is partnering with on-demand shipping company Frayt to test same day delivery to consumers of home furnishings the grocery retailer sells in 21 Kroger Marketplace stores in Cincinnati and Dayton, Ohio and northern Kentucky. Frayt is considering expanding the service to other areas where Kroger Marketplace stores operate if the test is successful.

  • The supermarket company works with Frayt to serve customers who purchase items such as patio table sets, grills and mulch in Kroger Marketplace stores that stock a variety of non-food items in addition to groceries. Frayt uses an online platform to connect customers to a network of around 3,000 drivers and offers contactless delivery.

  • The partnership with Kroger represents a new direction for Frayt, which has traditionally specialized in business-to-business delivery services. The company, which now connects drivers to delivery customers through an online platform, has seen an interest in a 250% increase in service since adding consumer delivery to its operations.

Dive Insight:

Kroger wants to capitalize on furniture sales as consumers turn to the outdoor dining season and many stores selling items like garden chairs, tables and umbrellas remain closed due to the pandemic. The agreement with Frayt also gives Kroger another tool to leverage as it competes with retailers like Target and Walmart beyond the grocery store that is at the core of its business.

If the pilot proves successful, it can potentially be scaled to hundreds of additional locations. As of the fourth quarter of 2019, 183 branches in Kroger’s fleet of 2,757 branches were marketplaces, according to the company. The company also operates more than 100 Fred Meyer stores in the Northwest stocking a wide variety of furniture and other general merchandise.

Bans on non-essential goods, however, could hinder expansion. For example, government officials in Vermont and Michigan have banned retailers from selling non-essential items to keep people from browsing the grocery store.

Kroger isn’t the only one taking advantage of his position as a grocer to connect customers to non-food products as the outbreak progresses. Last week, Hy-Vee announced that it has partnered with Designer Brands Inc., DSW’s parent company, to sell and deliver shoes to people who visit Hy-Vee’s website. The companies intend to eventually allow people to buy shoes online and pick them up at Hy-Vee stores, but have not announced when that service will begin. In the future, Hy-Vee will also sell shoes in DSW stores in its supermarkets.

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