Automation is bringing changes to the entire retail landscape, and when it comes to grocery stores, those changes are nothing short of inventive.
With the advent of online shopping came a revolution in convenience. Suddenly, customers didn’t have to travel to a store to browse its wares or make purchases; instead, the store would digitally come to them. In the past two decades, we’ve seen digital storefronts challenge and even overthrow brick and mortar shops in almost every consumer product category, from clothing to electronics to homeware to media. And yet, the most essential of these categories is still sold almost entirely at physical retailers, and that’s groceries.
It’s not for lack of trying, of course. Supermarkets around the world have allowed customers to order food and household items online for years. Amazon, the world’s largest e-commerce company, set up its Fresh subsidiary specifically to bring its speedy deliveries to the grocery space. Despite these efforts, a recent study showed that only two percent of food and alcohol sales in the US are made online.
This doesn’t mean change isn’t coming to the grocery industry, however. With automation set to play an increasingly large role in our world over the coming years, change is inevitable – but it’ll be different to the changes seen across other retail categories.
Solving the wrong problem
American supermarket chain Kroger made headlines earlier this year when it announced plans to partner with Nuro on a driverless food delivery service. Using Nuro’s compact, autonomous vehicles, Kroger hopes to make its products more easily accessible.
It’s undoubtedly an interesting concept, and one that could be applied to many other goods. But if people are forgoing online grocery shopping and delivery in favor of visiting physical stores, how will an autonomous delivery vehicle change their minds?
In a 2017 survey by Morgan Stanley, researchers found that 84 percent of respondents prefer to do grocery shopping in person because they can see and choose what they buy; in other words, people like to be picky with their food. This is a major issue for online supermarkets, and even the smoothest delivery service won’t solve it. If retailers want to transform the way people purchase food, they’ll need to use technology in a way that meets their business goals while still addressing consumer needs.
A physical-digital middle ground
While Amazon is investing heavily in grocery deliveries with the aforementioned Fresh service, its bolder move to make food shopping more convenient involves driving customers to a physical store.
Amazon Go, which in January opened to the public in Seattle, aims to speed up the purchase experience while still letting consumers be choosy about the produce and other items they pick up. The store’s cameras and sensors feed into a machine vision system that identifies what products shoppers pull from the shelves, allowing them walk out the door and have their account automatically charged, saving time that would otherwise be spent waiting in a checkout line. Other retailers are jumping aboard this vision, with rivals popping up in San Francisco and throughout China.
This trend toward cashier-less shops doesn’t mean the idea of bringing the grocery store to the customer has no legs, though – Toyota’s vision of a retail paradigm shift suggests it most definitely has legs, or rather, wheels. The company’s e-Palette is designed to increase convenience, maintain a physical experience, and bring the shop to the shopper by turning it into an autonomous vehicle. If this technology is combined with the types of foods that people prefer to hand-select, like produce and meat, there may soon be a compelling reason not to travel to a supermarket.
The retail landscape has been in flux for the past two decades, and automation will only change it further. But with different goods presenting different buying habits and challenges for stores, the way in which automation is embedded into the purchase experience will differ between product categories. And when it comes to groceries, we’ll be seeing some very unconventional approaches.