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October 26, 2017

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3 Areas of Innovation Disrupting Grocery Shopping

July 11, 2016

 

Books, music, movies…dinner? Just as online shopping brought other retail giants to their knees, these three trends in grocery retail will chew out traditional retailers unless they evolve quickly.

 

As a young, urban consumer, I shop for groceries and household supplies quite differently from my mother did when I was a student. Growing up in a rural area, before farmer’s markets and food coops became the norm, there was no access to organic food except for the blueberries we would pick every August. A trip to the local grocery store involved a thirty minute drive each way, usually forgetting the grocery list on the kitchen counter. Today, many grocery shoppers don’t even have to get out of bed to get the supplies they need to eat healthily and sustainably. In the past ten years, online-retailing and smartphones have changed the retail landscape, while both startups and established companies have launched successful innovations that could prove to be the best thing since sliced bread. I’ll take you through three trends — blending brick-and-mortar stores with online functionality, online delivery and meal-kits, and curbside pickup at brick-and-mortar stores — that we at Great Lakes GrowthWorks think consumers will come to expect from grocery retailers in the coming years.

  1. BLENDING DIGITAL WITH BRICK-AND-MORTAR: Apart from being a powerhouse in selling and popularizing organic food, Whole Foods Market also has found a way to reach their more wired customers through their namesake mobile app. Whole Foods offers coupons, recipes, and streamlined grocery lists on its app and website, which means shoppers know all the current sales and discounts going on at their specific store they frequent just by checking the Whole Foods app. The ingredients for Whole Foods recipes can be uploaded right into a grocery list with the exact amount needed, making a handwritten list unnecessary. Lastly, the app connects right to Instacart, an online company that sends a proxy to pick up and deliver your grocery order. All in all, consumers at Whole Foods have both the in-store and the online-level experience with which they can interact simultaneously, which gives the company more opportunities to engage shoppers.

    Additionally, the Whole Foods brand has recently launched a new line of grocery stores targeted toward millennials called 365 Market. Their first store in Silver Lake, Los Angeles has no loud speakers: information is conveyed via smartphone. It also boasts an app that serves as a sommelier, digital price tags that are scanned by the shopper, and a sophisticated “teaBot” which allows users to customize and brew thousands of different combinations of tea. Whether Whole Foods’ efforts to appeal to millennials will succeed remains to be seen, but both versions of the Whole Foods brand rely on apps to improve in-store experience in a way we’ll be watching closely. Whereas self-checkouts were a technological advance that boasted convenience but also inspired accusations of poor service, these new approaches emphasize improved customer experiences.


     

  2. BRICK-AND-MORTAR NOW MEETS SHOPPERS HALFWAY: Innovations in grocery aren’t just for upmarket retailers like Whole Foods: many companies from Walmart to Meijer are working to make getting groceries easier for their customers. Since Walmart sells 57% of all groceries in the U.S., this goes to show how widely these changes are taking place. Walmart is enlisting help from the tech startups disrupting transportation to compete with online retailers like Amazon Prime. Last month, Walmart partnered with Uber and Lyft, to deliver products to consumers’ homes. In addition to delivering groceries and goods through Uber, Walmart (along with Meijer, Kroger, and Giant Eagle) also offers curbside pickup at little to no additional cost to the consumer. Geared toward busy moms and people who need more accessibility, this offering includes consumers who wouldn’t otherwise be able to shop in-store. Curbside pickup can actually be seen as an update on what used to be a common practice in the U.S. before supermarkets became the norm. What Walmart and others are now promoting with curbside pickup is reminiscent of general stores, where the clerk would fetch everything on a shopper’s list for them. Innovations can be a return to simpler times of the past using the technology of the future in order to deliver the convenient, yet more autonomous and customizable consumer experience that shoppers want and expect.

     

  3. NEW DIGITAL PROVIDERS COME TO YOU: Meal kits have proliferated in the past few years, offering sets of ingredients delivered directly to the home to make just one meal. Now there are apps for vegan diets (Purple Roots), Southern recipes (Peach Dish), and many other dietary and culinary preferences. Blue Apron, one of the most popular brands, combines the joy of cooking with the ease of ordering takeout. Perfectly apportioned ingredients, complete with a recipe and nutritional information, are delivered three times per week. Subscribers no longer have to hunt down obscure ingredients at the grocery store—something I’ve found myself doing many times—when trying out a new recipe. Blue Apron meal kits and other similar offerings excel in connecting subscribers to new recipes and types of cuisine all while reducing food waste and packaging costs. Plus, an added offering of Blue Apron is a bottle of wine complete with a description of the wine’s original vineyard that pairs perfectly with each meal made. Meal-kits, while a growing competitor for grocery stores, can give other retailers a focus point that has been at odds with the supermarket model: removing the stress of going to the store, even removing or reducing the choice of what to cook for dinner, can be a liberating experience that helps customers get out of their routines of cooking the same things every day. The trend toward curated experiences and selective product choice is seen across all types of retail and is something grocers can use to their advantage by publishing recipes on their websites (see above) and suggesting innovative new ways to use food and other products.

    Though the “Uber for X” business model has proliferated in the past few years, Instacart is the “Uber for grocery shopping and delivery” company most likely to last for the long term. Grocery delivery apps have been around since the 1990s, but because they relied on their own warehouses and suppliers, the overhead was too much to maintain and they went out of business. Instacart sends contracted employees who work as designated shoppers to grocery stores who then deliver the groceries to customer’s homes. By partnering with brick-and-mortar grocery stores, like Whole Foods and Plum Market, Instacart has been able to grow their business while helping traditional grocers increase sales as well, since orders on Instacart tend to be two to four times as large as they otherwise would be on an in-person visit to a grocery store. After all, with growing numbers of urban-dwellers living without cars… there’s only so many groceries one can carry by hand in a single trip.

 

To recap, innovations in grocery technology are not only helping people like me to find recipes or discounted ingredients at a moment’s notice while shopping. They are also taking the lead in developing environmentally-friendly business models, decreasing food scarcity, and increasing food accessibility. When Americans waste as much as 40% of the food we produce by throwing it out, efforts to reduce food waste are urgently needed. Aging Americans have struggled to get to the grocery store after losing their drivers’ licenses or to carry heavy items in-store and volatile fuel prices can strongly impact consumers’ willingness to drive long distances. The increasing availability of home delivery and curbside pickup allows the market to include more people and lifestyles in a society with increasingly flexible work hours and commuting patterns. These trends have already aided in efforts to reduce “food deserts” where there are few grocery stores with healthy offerings. So, while some might write off digital innovations in grocery stores as being ploys to attract iPhone-obsessed young adults, these developments enable businesses to help solve the health and environmental challenges of today and tomorrow.

 

 

Image by Caden Crawford

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