Loblaw gears up for online grocery orders

Loblaw has begun advertising for staff who will handle online grocery orders. The country's biggest grocer is also putting a greater emphasis on fresh foods. Credit/Getty Images

It’s called “click and collect” and it’s a ground-breaking new way Canadians will be able to purchase their groceries, according to the country’s biggest food retailer.

Over the past couple of weeks, Loblaw Cos. Ltd. has quietly begun advertising for “concierges” to lead teams of “personal shoppers” that will help pick and choose grocery items for orders submitted by people online from the comfort of their home, or cubicle.

“You will ensure grocery orders are fulfilled as planned and on time for our customers,” the ads, which were posted around two weeks ago, say.

This week, the company unveiled in a media report its first “click and collect” drive-thru at a location in Richmond Hill, Ont., just north of Toronto.

Loblaw officials said in the article the service isn’t being made public yet. But with open job calls out, at least for positons in Toronto, it appears Loblaw is fast-approaching a day when it will offer online grocery sales.

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“Call it epic and ground breaking, but we see ‘click and collect’ as defining a new way to serve our customers,” the grocer said.

First movers

Also this month, Western Canadian grocery operator Overwaitea launched a pilot click-and-collect program at Save-On Foods locations. Both Save-On-Foods and Loblaw are following in the footsteps of Walmart Canada and online retailing behemoth Amazon in creating a digital platform for food sales.

MORE: Amazon steps into grocery wars with online offering

Both U.S.-based retail giants began offering food sales over the Internet in Canada last fall. While Walmart said in August online Canadian sales have experienced “triple digit” growth, its online component still represents only a fraction of total sales (it doesn’t break out food versus other categories, either).

Online grocery sales in general in Canada comprise a minuscule proportion of all grocery sales – just a fraction of 1 per cent, according to Strategy&, a consultancy owned by PriceWaterhouseCooper.
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But the amount stands to grow by a factor of 10 over the next decade, Strategy& said earlier this year.

MORE: Is Loblaw finally ready to start selling groceries online?

Ken Wong, business professor at Queen’s University, said Loblaw’s click-and-collect service, which sees customers select a basket of goods for pick up, will face a challenge in convincing shoppers to let others choose their food for them – especially produce, meat and dairy.

“It’s a model that plays very well for durable goods, and some semi-durable goods like health and beauty products, where you’re not expecting to see much change in the quality of the product,” Prof. Wong said.

“If you think of produce, meat, fish, you probably won’t be seeing as much of that,” he said.

If online orders for fresh food are going to work, shoppers will have to feel like they’re getting the very best fresh food Loblaw’s has to offer, Wong said. “The problem when you do that though, is that some shoppers in store may feel they’re then getting inferior goods.”

“You really don’t want to make [perceptions about quality] specific to any one shopping channel. You have to create the sense that, no matter where you shop at Loblaw you’re going to get a great quality of produce and a great quality of meat.”
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Fresh food

To perhaps achieve that, Loblaw has been investing in things like fresh juice bars at select locations and in a wider assortment of fruits, vegetables and meat products – visible cues to shoppers that Loblaw is the home of fresh food in Canada.

A national marketing campaign is in the midst of being launched as well, aimed at intertwining Loblaw into what’s become a mainstream “foodie” culture, management has said.

Prof. Wong said Canadians will never completely abandon bricks-and-mortar grocery stores, but Loblaw and others are opening new avenues for sales by moving online, he said.

One big difference in Loblaw’s click-and-collect model versus others, like Walmart’s, is that it doesn’t deliver to the home. Walmart, meanwhile, offers free shipping on standard orders.

WATCH: Loblaws is preparing to launch what it calls the “Click and Collect” program at one of its Toronto stores. 

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