How Lowes Foods Tackled Tech on Its Own Terms

The challenge, even for grocers with seamless online ordering and last-mile delivery within their sights, is that this increasingly critical channel is a moving target.

“Technology is changing; consumer demand is changing; the competitive landscape is changing," said Chad Petersen, VP of e-commerce for Lowes Foods, in a recent WGB interview. "Things do not stay the same, and [online ordering and delivery fulfillment] is probably the fastest-changing part of the grocery industry.” Added Petersen: “You’re dealing with heavy technology. You’re dealing with the user experience—the layer of your native apps and your website. You’re dealing with services and fulfillment, and logistics and food safety—all these integrated components to make an online grocery order happen.”

Given ever-changing consumer expectations and the rapid evolution of grocery industry technology, Lowes Foods sought a multiprovider platform that would allow it to improve customer experiences, unit economics and delivery coverage without detracting from the Lowes Foods experience through the retailer's popular Lowes Foods-To-Go click-and-collect and delivery program.

The Winston-Salem, N.C.-based grocer partnered with Delivery Solutions, a provider of third-party aggregation and orchestration for last-mile delivery, to gain additional fulfillment capabilities that better serve Lowes Foods' customers while providing shoppers access to the entire in-store inventory, real-time visibility, and fast, reliable deliveries.

“You have to know that you’re getting into a partnership with a company that is scalable, flexible and is willing to partner with you on innovation and reacting to needs as well,” Petersen commented.

By the end of the year, Lowes Foods will use Delivery Solutions’ same-day delivery and post-purchase offerings across all of its locations in North Carolina, South Carolina and Virginia that offer online ordering.

Why Consistency Matters

While Lowes Foods has offered Lowes Foods-To-Go for some 25 years, the retailer's delivery service debuted only in the past three years.

Delivery Solutions has helped Lowes Foods explore and grow its capability to successfully run delivery orders, said Petersen, for whom the goal is to use technology to grow and differentiate the business while allowing the Lowes Foods team focus on service.

“We let Delivery Solutions, and any of our tech partners, take on the heavy lifting of the technological work as this helps us focus on the service—that always starts with food safety, the accuracy of the orders and the quality of the orders,” says Petersen. “We can focus on that as opposed to spinning our wheels worrying about architecting integrations with [various] providers.”

Working with Plano, Texas-based Delivery Solutions has also allowed Lowes Foods to offer a consistent look, feel and experience for its customers regardless of the third-party logistics providers involved in any transaction, given that part of Lowes Foods’ last-mile delivery fulfillment strategy has been to use a combination of regional dark providers alongside popular nationwide providers, as well as its own delivery capabilities.

“What Delivery Solutions offers is a better opportunity to create the Lowes Foods experience,” says Petersen. “Anybody reliant on third-party logistics providers, especially gig-type [services], knows you can’t dictate or force drivers to wear your branded products or clothing or put branding on their cars.” As a result, shoppers receive delivery notifications and branding from the third-party provider rather than the retailer from which the groceries are being sourced and delivered.

“With Delivery Solutions we can override those types of things so that whenever someone orders from Lowes Foods, their notifications are going to look one way with our messaging and our branding,” Petersen continues. “The map is going to look one way, with our colors and graphics. It’s still going to be an independent contractor making the delivery, but we begin to own that experience digitally and it just so happens that someone with a Shipt shirt gets out of the car and makes the delivery.”

The Delivery Solutions implementation also allowed Lowes Foods to optimize batching for pooled distribution with cargo trucks and vans, offer special delivery to lockers within senior communities, and make its entire in-store aisle available online with specialized delivery providers for alcohol and cold-chain delivery.

“Delivery Solutions created a flexible way for us to change our approach in terms of how we fulfill and who we fulfill with, especially with our delivery orders that are going out of our stores,” Petersen stated. “We can improve that guest experience even if we use different third-party logistics providers and make the experience pretty much the same even though we’re using different partners. Delivery Solutions helps reel that in and take the burden of that differentiation. They help us create a singular experience as far as setting the expectation of where your delivery is and when it’s going to be delivered.”

“As the marketplace gets more fragmented and more and more people are buying things digitally and getting them delivered, it really comes down to how are you reinforcing your brand through the digital experience? That’s where we’re taking the [Lowes Foods] partnership now,” said Delivery Solutions founder Arshaad Mirza.

Locally owned and operated, Lowes Foods employs approximately 9,000 people and operates 80 full-service supermarkets. Lowes Foods is a wholly owned subsidiary of Alex Lee Inc.