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Erewhon’s Small But Mighty Approach to Tech

Upscale grocer gives GroceryTech attendees a peek into the innovation behind its app
Marian Zboraj, Progressive Grocer
Chief Growth Officer Kabir Jain spoke about Erewhon's latest innovations during GroceryTech 2024.

Kabir Jain, chief growth officer at Erewhon, recently gave GroceryTech attendees a peek at how it's bringing experiential retail into grocery through its own app.

Erewhon is an upscale natural and organic food and wellness store based in Southern California. It is long known for offering high-end merchandise, including its own private label products, and for its organic café and beloved smoothies. The independent grocer currently operates 10 locations across Los Angeles. 

The small but mighty retailer launched the Erewhon app in July 2023. “Basically, the idea was if we can bridge loyalty and e-comm, they can work hand in hand and we can grow the pie through higher engagement, higher sales, higher frequency,” said Jain.  

For Erewhon, “loyalty” means membership. The grocer offers a paid loyalty program, where shoppers pay $100 or $200 a year to be an Erewhon member. Members receive such benefits as earning $1 back in points for every $10 spent, free smoothies and first access to merchandise. “It works really well because our members are, quite literally, bought into the program,” Jain said. “You spend $200, you're going to get your money's worth.” 

The app acts as the digital hub for all things membership, making it vital for every member to download the app. 

There were different aspects of the digital experience that Erewhon needed to complete before releasing its app, however. One was combining its businesses into one experience. Being known for its prepared foods/drinks and grocery products, Erewhon had the difficult task of  having to combine businesses digitally. 

“Someone will come into Erwhon, they'll buy a dozen eggs, a cappuccino and a bean burrito,” explained Jain. “That's a very real basket. We have to allow them to do the same thing in a single ordering experience. But as you can expect, it's really hard to do. You've got prep times, you've got hot, you've got cold, you've got different people in the stores managing it. How do you let the customer know when it’s going to be ready? If we couldn't do this, we couldn't launch the app, because if someone can't get what they want online that they can get in store, why would they try it?”

Erewhon implemented Dynamic Overall Order Prep Time Calculations. “We're saying, how long is this going to take?” said Jain. “We're adding up their cart dynamically and estimating how long it's going to take to get them this order.”

He continued: "This allows us to effectively say if you're getting just a cappuccino, that’ll be right to you in 10 minutes. If you're getting 14 grocery items, three smoothies and two burritos, it might take 75 minutes, but we're telling you in the order experience before you get to checkout, so you are pleasantly or not unpleasantly surprised.”

Another aspect of the e-comm experience that Erewhon needed to get right was search, since the majority of its “add to carts” come from search. Erewhon used search partner Algolia to help predict search intent through suggestions, effectively giving shoppers what they want faster. Erewhon is also personalizing the results by the user. “This will continually be used to dynamically move things you want up, based on your behavior,” said Jain. “We look at your online transaction history and your in-store transaction history to merge the two together to put to the front what we think you're going to want the most."

Speaking of personalization, the Erewhon app also features cart reminders and easy reorders. On the marketing side, the grocer is able to target and send each person individual push notifications. 

Then there’s product data. “We use a combination of our in-house data, third-party databases and, yes, AI to some extent,” said Jain. 

Erewhon writes AI-generated descriptions for its products. "Data has shown customers love to have qualitative descriptions of products," explained Jain, "so we use AI to generate descriptions of products using whatever information we have." 

Erewhon also uses AI to generate product recommendations. 

One aspect that Erewhon hasn’t quite mastered yet is distinguishing café versus grocery. ”A user is very often there for a single shopping occasion. They're getting groceries or they're getting lunch for the most case, but we don't really know what they're there for yet. When shoppers search cauliflower, we can either show café products or produce. One of these is not applicable. I already know that, I just don't know which one.” 

Some solutions the grocer is working on are looking at a customer's previous search history and the time of day that they're searching, to "then maybe make an educated guess as to what are they are trying to do," said Jain.

Overall, Erewhon’s e-comm efforts are paying off. According to Jain, the shoppers who have adopted digital spend 70% more, “They're more valuable shoppers. They have bigger baskets,” he added. “This gives us the confidence to continue investing, continue driving digital."

These future investments include implementing in-store kiosks for its cafés. Jain said that the company is also exploring subscription baskets and personalized nutrition.

In addition, Erewhon is also working on DTC. “We run a separate Shopify site where we can sell and ship a variety of Erewhon products across the country. We don't love the idea of it being a separate site. We'd love to integrate that into our mobile app, where if you're in New York City, we know you're in New York, [so] you're not going to see smoothies, since we can't ship them to you, but you're going to see everything we can ship to you.”

Progressive Grocer’s GroceryTech took place in Dallas June 5-7. The annual event provides an intimate and experiential event that brings together key retail decision-makers in the grocery industry – and their supplier and vendor partners – who are on a journey to modernize their technological ecosystems and are looking for one-on-one opportunities to explore new solutions for accelerating value.

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