Tuesday, August 30, 2016

Can Online Sales Help Food Co-ops Thrive?

When I heard that Food Front Co-op in Portland was offering online ordering and delivery to most of the Portland area, I knew it was a big story. Food co-ops have traditionally depended on their immediate neighbors for most of their sales and, particularly, for their membership subscriptions. With the grocery scene in Portland exploding, co-ops were struggling to compete. So I pitched the story to the prestigious online food-issues website, Civil Eats, and it published today.

Can Online Sales Bring Food Co-ops into the Modern Age?

New technology is allowing once-fringe natural food co-ops to reach a new audience.

If the mention of a cooperative grocery store conjures images of barefoot hippies pawing through bins of nuts and grains like squirrels, then we have news for you. Many of today’s co-ops have modernized their business plans to reach a wider audience. This fact is especially evident in the way many co-op groceries, like national supermarket chains, are on their way to offering online ordering, with delivery in one to two hours.

The reason that many brick-and mortar grocery stores are jumping on the online grocery bandwagon is simple—for many people, shopping online is more convenient.

Due to the emergence of delivery services like Instacart and Amazon Fresh, the technology which has made it possible for the chains to get online has also made it easy for co-ops, many of which have only one or two stores. Customers simply go to the store’s website, log into the online ordering section and start shopping.

Instacart currently has 100 retailers nationwide, including several co-ops such as Rainbow Grocery in the Bay Area, Good Grocer in Minneapolis, Central Co-op and Puget Consumers Co-op (PCC) in Seattle, and Harvest Coop in Boston. Andrew Nodes, head of retail accounts at Instacart, says that co-ops particularly benefit from online ordering and delivery services because it allows them to expand beyond their neighborhood membership base by giving them access to new customers.

“[Co-ops] also sell hyper-local and perishable items that don’t have the exposure that national brands backed by multibillion dollar corporations do,” he says. “Instacart is a way for them to increase customer exposure to those items.”

According to Brie Hilliard, marketing director of Food Front Cooperative Grocery in Portland, Oregon, the co-op decided to go forward with an online system two years ago, but put it on the back burner until it had a point-of-sale (POS) system in place. This year, they’ve begun offering sales through Instacart and so far around 130 customers have taken advantage of the service.

The timing was fortuitous, as it coincided with the opening of a popular 17-store grocery chain, New Seasons Market, just a few blocks from the co-op’s flagship location. With online ordering, Hilliard said, Food Front is now able to fill orders from its two locations for most of Portland’s neighborhoods in one to two hours.

Read the rest of the article.

No comments: