For those times when you can't wait the hour it would take to go out and buy the organic chicken you crave, Whole Foods (NASDAQ: WFM) is now there for you. The grocery chain recently announced a team-up with the delivery gurus at Instacart. Now, residents of 15 U.S. cities have the option to shop Whole Foods online and have their order delivered within an hour. It might seem like just another slide toward Americans finally melding with their couches, but it's actually a great move for Whole Foods.
Companies such as Amazon.com (NASDAQ:AMZN) and Kroger (NYSE:KR) have already jumped on the instant satisfaction bandwagon. Amazon has garnered all sorts of coverage for its weird -- or ingenious -- plans to delivery goods by drone. Kroger purchased Harris Teeter earlier this year, and got a great online grocer in the deal.
Whole Foods' move to expand its customer base is all part of an effort to stay ahead of the organic competition, while getting more total sales packed into each store. To start with, Whole Foods will also provide shoppers a way to make orders online and pick up in-store, which drives even more traffic through the door. It's a system that looks a lot like Harris Teeter's Express Lane option.
Why deliver at all?
Why would these companies even offer the delivery option? If picking an order up in the store means you walk through the doors and can then purchase more, what's the incentive to transport things to you? Two words: impulse buying.
Grocery stores, malls, and department stores are all configured on the premise that the way you encounter products can increase your likelihood of buying them. Amazon wants you to see a video game, think, "Oh, I always wanted that," and then buy it right then because you know you can get it in a matter of hours -- not days.
The bane of any online retailer has to be unpurchased items in the shopping cart. You fill it up with things you might want later, but then never pull the trigger and make the purchase. Offering customers same-day delivery means they think about those purchases differently.
Studies have shown that the delay of gratification makes us unhappy. In a classic experiment, children were offered one marshmallow immediately, or two if they waited 15 minutes. Of the 600 kids tested, only about 200 got the second marshmallow. We want things now.
Growing sales from your living room
If Whole Foods can bring the success of its stores to the online world, it could open up a whole new opportunity for revenue generation. In the first nine months of this fiscal year, Whole Foods increased comparable-store sales by 4.6% .That's the same increase Kroger realized in its first quarter this year, and it shows why Whole Foods needs to make a new push. This time last year, Whole Foods' comparable sales were up 7.2%, year to date.
Whole Foods' plan to deliver right to your door could make impulse shoppers out of us, even as we sit on the couch. If Amazon has its way, that's not just going to mean candy delivered in an hour. Whole Foods is buying into the future of online shopping, and it's just the beginning of a sea change for consumers and retailers.
John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Whole Foods Market. The Motley Fool owns shares of Amazon.com and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.