Grocery chain Kroger and pharmacy chain Walgreens are teaming up on a pilot in which shoppers near 13 Walgreen locations in Northern Kentucky will be able to pick up their online Kroger orders at Walgreens—and Walgreens will begin offering grocery items from Kroger’s Our Brands line.
Kroger is touting the partnership as a “one-stop shopping experience,” but it’s not entirely clear why customers wouldn’t just pick up their orders from Kroger, which is based in nearby Cincinnati and has at least 50 stores in the area, per its online store locator.
When asked why Kroger, which has its own pharmacy and wellness department, is joining forces with another pharmacy, a rep said the pilot will enable it to test its working hypotheses as it seeks to redefine the customer experience in grocery.
“Our hypothesis is that customers are looking for convenience, simplicity and the ability to shop on their terms,” the rep said. “We look forward to learning how customers like the convenience of having more Kroger Pickup locations and the ability to purchase Our Brands grocery items in participating Walgreens locations.”
Walgreens did not respond.
In a release, Stefano Pessina, chief executive of Walgreens Boots Alliance, said the partnership will help determine how to “further elevate our customer offering” and “provide a more differentiated shopping experience.”
Forrester’s Sucharita Kodali pointed out it’s a test.
“I think it’s just another pickup point for customers,” she said. “It’s one part of an experiment that may later have shared inventory or a shared loyalty program.”
That’s in part because no one has yet figured out the logistics of grocery delivery at a price point consumers are willing to pay and that makes financial sense for retailers. In fact, virtually every major player in U.S. grocery is experimenting with a wide array of delivery options.
Kroger has also partnered with robotics company Nuro to test an autonomous grocery delivery service in a secret location this fall.
Walmart has partnerships with Postmates, DoorDash, Uber and Deliv in markets around the country. It also recently announced its Spark Delivery service, which uses independent drivers who work with Delivery Drivers Inc. in Nashville, Tenn. and New Orleans. America’s largest retailer even offers in-building and in-fridge delivery with smart access providers Latch and August Home. That’s in addition to a pickup service.
Then there’s ecommerce company Jet.com, which will use last-mile delivery company Parcel to deliver groceries to New Yorkers in four out of five boroughs. (Jet.com parent Walmart acquired Parcel in October 2017.)
Not to be outdone, Target acquired grocery delivery service Shipt in December and started rolling out same-day delivery in Alabama and Florida in February.
For its part, Amazon offers grocery delivery to some cities via Amazon Fresh, as well as Whole Foods delivery through two-hour delivery service Prime Now in select markets.