In the past ten years, the retail landscape worldwide has changed dramatically. Some businesses, such as video rentals and record stores disappeared when disruptive new technologies eliminated the need for brick-and-mortar stores. Others, like general computer stores and most bookstores have been displaced by online shopping and specialty brand stores. Popular brands like Blockbuster, Tower Records, and Borders have disappeared and most people under 21 won’t even know what they were  .
With the advent of online groceries shopping, could the same fate happen to your neighborhood’s supermarket? Will the groceries business end up controlled by Amazon and similar companies? The digital menace is real, and groceries companies know it. However, they are embracing digital innovations to strike back and stay as relevant players in their business.
Consumer have embraced e-commerce and groceries shopping is no exception. According to Nielsen, one quarter of groceries shoppers already order groceries online and more than half are willing to do it in the future . This has been impulse mainly by Millennials and Generation Z, who have little time and preference to avoid time-consuming chores and prefer to invest their time in meaningful experiences.
This trend is not exclusive of developed economies. Emerging markets such as Asia-Pacific and Latin America are avid for e-commerce, more so than Europe and North America. For example, while 66% of shoppers in Asia-Pacific are willing to use virtual supermarkets such as Amazon Fresh only 46% have the same interest in Europe .
However, consumers have not migrated massively to groceries e-commerce without concerns. Old habits die hard and groceries shopping has been for decades a sensorial and social experience . People are more likely to buy non-food products (beauty, cleaning products) online than fresh food. Shoppers fear receiving fruits and produce they would not have chosen had they been in the store, and smelling a freshly baked apple pie is not the same as seeing one through the Instacart app. In addition, most online shoppers have also felt the unpleasant experience of late deliveries or receiving products that don’t exactly match the online description of the products.
Wi-Fi in Aisle Four
To avoid extinction, groceries retailers have started to create a new retail experience for the future. Considering both the willingness of consumers to switch to online shopping and the resistance to shop certain products on the web, retailers are transforming their operation to give the customer the best from their brick-and-mortar stores and the online environment. Under this new approach, retailers are creating an “omni-channel”  experience where consumers can transfer between digital and physical channels of the company according to their preferences and the type of purchase .
Two retailers have started to work in how the supermarket of the future might look like. Tesco, a global retailer based in the UK, has invested heavily in technology development, including a new 3000-worker development center in India. Tesco’s shoppers can now order their products online and pick them up in most of their UK stores. In Seoul, consumers can shop w ith their smartphone from a virtual store in a subway station or a bus stop and then select if they want to pick their products at a real store or pay for a delivery service (see images). The company is also using shopping pattern data at their stores, obtained from their loyalty program, to select the best product-mix for each store .
Coop, in Italy, worked with Microsoft and Intel to create the brick-and-mortar store of the future. Introduced at the Expo Milan in 2015, Coop’s new store model relies heavily on technology to create a personalized shopping experience that resembles the town market experience decades ago. By just looking at a product, consumers get detailed information of it in screens located nearby including “ingredients, origin, carbon footprint, and wine pairing recommendations” , creating an experience that is more than just a chore. All of this is possible thanks to motion sensors, like those found in an Xbox, located through the supermarket. The sensors help identify which products the shopper looks and selects, also helping Coop to keep an instantaneous inventory of the products on the shelves  More information about Coop’s proposal is available at http://supermercatodelfuturo.e-coop.it/eng.
It’s still premature to know which of all these innovations will become mainstream in years to come. Some technologies might work in some markets but not in others. The experience of the music industry, with many promising devices and applications now extinct (think Rdio…) may give an example of what will happen in retail. However, there’s little doubt retailers must keep investing to adapt to the changes in preferences of consumers while still respecting old shopping traditions. It’s a matter of survival.
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