Been to a grocery store lately? It can be depressing.
That because the aisles of Safeway and Albertsons are veritable ghost towns nowadays as consumers increasingly shop at places like Costco, Target and their local drug store. But the biggest threat to the corner grocery store isn’t from other brick and mortar retailers, but instead the growing number of consumers buying products once purchased locally on Amazon or other e-commerce sites.
But that’s only the beginning, because if you think simply ordering online through a computer browser or smartphone is the logical end destination for Amazon’s assault on the grocery store, think again.
That’s because now the goal for Seattle’s online giant and product companies themselves is to move the point of consumption from the browser to the device, whether that be a coffee maker, oven or washing machine.
The most visible effort here is Amazon’s Dash platform (something we’ve covered at length here at The Spoon), but Amazon isn’t the only one. Appliance makers like Nestle and Samsung are adding reorder capability into their products while startups like Juicero are creative entire supply chains built around smart, connected devices. There’s also other platform providers like FreshHub and Hiku, which are independent platform providers looking to take food and consumable shopping closer to the point of consumption.
The only question for many is how far will this go, and will this attack on the dry-good centric middle of the grocery store spread to the edges, where companies like Campbell’s have increasingly put their focus?
There’s no doubt that long-term, fresh is seeing just as much change as dry goods. In some ways it’s obvious, as Amazon Fresh, Peapod, and the other online grocers continue to grow, as well as the ever-growing interest in meal kit delivery services. In other ways, it’s less obvious, as new forms of delivery (drones, sidewalk robots) move into early rollouts.
But fresh is where grocery stores can fight back. Walmart has been working with startups like Hiku to enable in-home scanning coupled with curbside pickup. Point of sale technology provider NCR is working with companies like Intel and Microsoft to expand options as well.
Grocery stores can also fight back through more compelling in-store experiences. This has already been happening in some ways as grocery stores expand their in-store demo areas, but the next logical step is for these companies to with in-home technology providers themselves to create demos and “experiences.” Whether this means having a sous vide appliance maker to show how to make steak or Juicero to demo the company’s juicing system, it doesn’t matter. It really should be all of the above.
Clearly, there’s no easy way forward. As the century-old grocery store model is increasingly under attack by evolving retail and online models, change is needed to prevent the ghost town from spreading to the outer edges.
That said, by embracing technology – including those startup innovators in the kitchen – grocery stores can help reshape themselves and how consumers shop for food. Consumers increasingly want fresh food, and the reality is unless we expect tens of thousands of muscular drones delivering the evening meal to our homes, physical store and connected device hybrid models are likely going to become increasingly important.
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