Olean Wholesale Grocery Cooperative takes a two-pronged approach to e-commerce: It sells its grocery products to retailers who place two-thirds of their orders through mobile devices, and it helps its member retailers find the e-commerce and related technologies they need to improve their businesses.
The cooperative reported $250 million in total revenue in 2015, and its 145 retailers placed 67% their orders through mobile devices, CEO Bob Ketchner says.
The cooperative sells 16,600 types of meat, produce and other grocery products to grocery stores in New York, Pennsylvania and Ohio. Meat and produce accounted for 36% of sales last year, or $90 million, with 10% of that, or $9 million, ordered by retailers through mobile devices, Ketchner says. Other grocery items accounted for the remaining 64%, or $160 million, of sales, with nearly all, or 99% processed through mobile devices, he adds.
That all adds up to about 67% of total sales, or $167.4 million out of $250 million, received from retailers on mobile devices. The remainder are processed through telephone orders.
Olean provides its client retailers the options of placing wholesale orders for grocery products through two mobile-ordering options from Mobisoft Mobile Ordering Solutions—a MobiairSE smartphone app or a Motorola MC45 handheld device, each of which are configured to order from Olean’s product catalog. Mobile ordering enables a retailer to place orders either at their desk or “shelf-side,” which means they can order in real-time as they check inventory. That makes it unnecessary for Olean to also provide ordering from a desktop e-commerce site.
The retailers also use Olean’s website to find technology products available from other approved technology vendors. The available technology applications also include the Retalix warehouse management systems from NCR Corp., and a mobile commerce app from Rosie Applications Inc. that retailers can provide their retail customers for placing orders for home delivery or in-store pickup.
Olean has moved to expand its expertise in e-commerce technology as well in order management technology to recommend the best ordering options to its retailers.
“Our style of offering technology is menu-driven,” Ketchner says. “Our customers know they need something and they put a lot of stock in our opinion, so if we have something that fits their needs, they have access to it.”
Olean offers retailers several applications for managing operations with suppliers and customers, and a retailer can choose as many or as few as it deems helpful, Ketchner says. Olean does not require its retailers to use its software and its retailers don’t receive any discount on the technology. The prices that technology vendors like Mobiair charge Olean’s retailers for each technology application ranges from $20 per week and up, Ketchner says.
All of Olean’s 145 small to mid-sized grocery store retailers are also shareholders in the company. The percentage of shares it gives to a particular retailer is based on its weekly order value from Olean. The more a company buys from Olean, the more shares it owns in Olean.
The ownership arrangement between Olean and its retailers helps both sides, Ketchner says. “We try to source out the best products,” he says. “The retailers own us, our success is tied to theirs, so we’re making sure they have the best technology for their business.”
Ketchner says that technology vendors such as Rosie Applications and NCR Corp., a provider of point-of-sale, warehouse management and related systems, will suggest technology products to Olean. Olean recommends those it believes will help retailers. Olean itself uses NCR’s Retalix software for its warehouse management system.
Olean plans to continue recommending new technology to small retailers. “It’s hard to get smaller, independent retailers to buy into the need for technology,” Ketchner says. Olean has also recently expanded its relationship with Rosie, which provides a grocery shopping app for consumers to place online orders for same-day delivery or in-store pickup.
This month, Rosie began to provide Olean Wholesale members with assistance acquiring and retaining customers. Rosie will also provide Olean’s retailers with in-store advertising and recommendations to customers based on a consumer’s preferences.
Sign up for a free subscription to B2BecNews, a twice-weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry. B2BecNews is published by Vertical Web— Media LLC, which also publishes the monthly business magazine Internet Retailer. Follow Tim Brusveen on Twitter @TimBrusveen.
Follow us on LinkedIn and be the first to know when new B2BecNews publishes new content.Favorite