Walk into the food store of the future, and you’ll be walking into an environment influenced by intense collisions of the wellness and foodservice industries, built around efficient and precise fulfillment of hyperpersonal needs and staffed by customer service representatives who are assisted by an army of robots scrubbing the floors, replenishing the shelves and making sandwiches. Behind the scenes, computer vision and artificial intelligence (AI) will be at work providing everything from basket-building strategies to pricing, security, inventory and pay. There are few cash registers and even fewer center store aisles. Specialty departments from meat to pharmacy aren’t permanent fixtures but plugged-in modules that can grow, shrink or change as needed. It’s a small store built to serve the community and needs to be both experiential enough to draw attention and foot traffic in a world that increasingly will use food as a traffic driver, and technologically advanced enough to be an efficient node in an omnichannel network.
This may be surprising to shoppers of today, but it won’t be to the store of the future: It will see those customers coming, and it will know what they want.
It’s no secret to the food retailers of today that the physical store environment needs to change to keep up with both emerging technologies and the shoppers whose lives have been influenced by them, but a revolution is still in the early innings. For the most part, retailers understand the model that has served them well ever since Piggly Wiggly founder Clarence Saunders pioneered the self-service grocery format more than a century ago—orderly rows of shelving showcasing brands, efficiently enabling shoppers to pick their own selections—is in need of radical reinvention for the digital age and intense competition for share of stomach.
Illustration by Chris Philpot
To be sure, a gradual evolution of the retail food space has been taking place, particularly as retailers bring better data to bear on the concept of customer-centricity and unwind the process-focused stores of yesteryear. The first robots rolled onto store floors in 2019, and experiments in checkout-free shopping and AI-influenced pricing are well underway. Fresh departments are growing in size and in prominence. Many national brands and packaged goods are in decline, with private labels and convenience foods growing in their place. Natural and organic foods, only the first signals of a seemingly unstoppable health and wellness trend tightly tied to consumption, have become the new normal for shoppers and need a place to reside.
Just as important, digital capabilities have opened up a new appetite for convenience among shoppers, many of whom seemingly no longer have the time nor the mindset required to use stores as a means to assemble ingredients, which they’ll then need to unwrap, prepare and combine in their kitchens to feed themselves and their families. This has given rise to a new wave of convenience-focused food and the emergence of the “grocerant,” with all manners of to-go food—preprepped, heat-and-eat, fully prepared or served in-store—demanding their own space and their own solutions.
But satisfying convenience-minded consumers also means connecting with them wherever they are and in the modality they desire. So food stores of the future will need to do triple duty to serve as pickup points for orders assembled there or delivered there from a distribution hub, as well as a point from which home deliveries can originate. The store of the future will also need to communicate with its shoppers and their homes or appliances as needed.
The technologies that will enable much of this transformation—such as 5G wireless to process the massive data, computer vision and robotics that will serve as the future store’s brain—are already in development, with some taking root in supermarkets today. Fast-forward a decade, sources say, and these same technologies will mature to meet intensified consumer demand for wellness, convenience and experience that will coalesce around food consumption and give rise to the format of the future.
“I don’t want to waste my time walking through an aisle, picking stuff from a shelf,” says Daniel Montano, a partner and design principal with Little Diversified Architectural Consulting, a Charlotte, N.C.-based architecture and design firm with clients including grocery retailers worldwide. “I want my time outside of my house to be value-added, to be something that adds to my life and does not detract from it. Walking through an aisle with bleach and soap, then transferring to coffee and then to the produce department? That is going to die, because it has no value.”
Health and Wellness Accelerates Through Hyperpersonalization
Sources speculating on the grocery store of 2030 invariably predict it will reflect a tighter integration with health and wellness—already hugely influential in food—that’s accelerating by aligning with trends toward personalization, customization and sustainability that are increasingly significant in supermarket purchase decisions and marketing.
Advances in areas such as gene therapy—and an associated attempt to reel in soaring costs of healthcare—will give rise to medicines and foods that are ideally suited to provide nutrients and formulations for particular customers, Montano predicts.
“If you look at the hypercustomization and growing trends on wellness and health, concerns with global warming and the other things we will have to deal with as the future comes, I think groceries will be, among other things, redefined by an ability to be completely based on our genes,” he says. “I think hybrid customization of what we eat is going to be a key driver.”
Manufacturers and retailers today are only beginning to attack this market. A Los Angeles pet food startup called Baseclaws is selling DNA kits that consumers can use to test their cats and provide optimal nutrition based on the results. The meal-kit company Sun Basket, based in San Francisco, is shifting focus from products based on lifestyles to those based on health states. The Kroger Co. is now undertaking similar experiments with its Home Chef meals, said Joe Grieshaber, SVP of merchandising for the Cincinnati-based retailer, at a recent conference.
In this test, a small group of shoppers “actually had a prescription for food and a Home Chef meal was sent to that customer to say, ‘This meal is actually what you need ... for your healthcare situation,’” Grieshaber said.
Because health is intensely personal and needs are different from one shopper to the next, supermarkets have traditionally marketed wellness broadly. Wellness could mean less sodium for one customer and less cholesterol for another, Grieshaber said. But the future store could tap into purchase histories, integrate further with dietitians and pharmacies, and use wellness to guide customized recommendations even into everyday purchases.
“Imagine you as a consumer have your own private data cloud that follows you around. And in that cloud is your digital identity, your profile, what you like, what your needs are from a food perspective based on your real-time current health information,” says Gary Hawkins, CEO of the Center for Advancing Retail and Technology (CART), a Los Angeles-based platform for consumer goods innovation. “When you walk into a store, you’ll be able to give that store permission to access parts of your profile so even if you’ve never been there before, they can begin to personalize that shopping experience just for you.”
For example, a shopper sharing such access wouldn’t need to request that an order for prepared food be made gluten-free or vegan if that’s what the profile of the shopper and their preferences indicate. But this aspect of the intelligent store will come to life in other ways as well: serving up textually relevant information such as recipes or offers in real time and storing and retrieving shopper data at appropriate moments.
Paul Scorza, chief information officer of Ahold Delhaize’s Retail Business Services unit, says computer vision, geofencing and blockchain will increasingly influence the store of the future. Common to all three technologies will be precision location of the people and the things in a store—data that can be monetized and reinvested in enhancements to store experience.
LEFT Giant Food Stores launched Marty the robot to report spills, debris and other hazards to employees. RIGHT Ahold Delhaize’s Lunchbox concept uses frictionless technology similar to Amazon Go.
Photographs (from left) by WGB staff; courtesy of Ahold Delhaize
“It’s not about identifying the exact person but noticing the hot spots of how people go through stores, where they stop, where they look, what routes people take through stores,” Scorza says. “I believe location of people is valuable information for lots of companies.”
Blockchain-enabled supply chains, in the meantime, will provide information about a product’s origin and the route it took to the shelf, which can be integrated in a more personalized experience for shoppers. “We’re getting there now,” Scorza says. “If I’m a diabetic, when I go to scan a product and put it in my basket, it’ll say, ‘Whoa, you know how much sugar is in that? You’re a diabetic!’ So I think all the data that you’re going to have about everybody is going to allow you to really use that technology to make it a better experience for a customer.”
Automated and Frictionless
Sources predict future food stores will also be defined by automation and frictionless features—some of which have already begun populating stores but will be considerably more widespread, and more effective, in a decade.
Frictionless shopping—often used to refer to technologies attacking the aspects of the current shopping trip that are considered time-consuming, inefficient or both, such as checkout—could take several forms, Hawkins says.
Computer-vision technologies allowing for frictionless checkout, now on display in small stores such as Amazon Go and the trailer-sized “nanostores” rolling out through tech startup AiFi, will eventually climb the size ladder as tech companies get their arms around computing power and 5G arrives for businesses. Already, companies such as Trigo Vision and Grabango are testing such systems in larger stores. While faster checkout is the attraction for consumers, retailers will primarily benefit from the data their trips leave behind, as well as effective new ways to combat shrink and shelf inventory and labor savings that can be invested in better customer service.
But other forms of reducing shopper friction could also gain currency, Hawkins says, including smart shopping carts, such as those developed by New York-based startup Caper; advances that make “traditional” checkout more effective, such as Israel-based startup NanoQ, which uses computer vision to scan an entire basket of items in seconds; and advanced product-recognition technologies that can determine spinach from kale.
“Computer-vision technology is growing by leaps and bounds,” Hawkins says. “Some of the technologies are not ready for prime time yet, but I have full confidence that within the next 10 years—and maybe before that—the code will be cracked, and computer vision will be able to pick up anything and everything in a store.”
Automation will undergo similar refinement. While robots are already rolling through the aisles of stores such as Schnucks, Walmart and Stop & Shop, their capabilities will increase as stores harness computing power and technologies such as the automated floor scrubbers in use at Walmart stores gain scale.
Automation is also a key to supermarkets tackling the costs of serving omnichannel shoppers, with many betting that automated fulfillment—live in only a handful of U.S. stores today—could become ubiquitous as e-commerce takes a bigger share of overall food sales. Here, grocers have eyes on incremental sales gains, wider geographic draws and omnichannel shoppers who tend to be more loyal and spend more with stores that get e-commerce right. But there’s debate about the form that fulfillment will take in the future: For example, Kroger’s vision for a 2030 grocery store supported by fulfillment enabled by large, off-site Ocado warehouses may reflect a different view than competitors now dabbling in store-enclosed micro-centers such as Albertsons; many believe a mix of technologies will prevail in 10 years.
Andrew Benzinger, business development director for AutoStore, a Norway-based logistics technology firm, says there are concerns whether some micro-fulfillment schemes can reach their potential if issues such as inventory limitations and the labor required to “marry up” automated and hand-picked combinations cannot be solved. AutoStore, which has developed cube-storage robotics similar to that of a small-footprint Ocado, is also part of a new store plan that combines an automated pick center with fresh grocery, as proposed by the architecture company Cuhaci & Peterson and the retail software firm Locai.
“All the stuff that requires no value” will be gone from the 2030 food store, Benzinger predicts. “It doesn’t take a skilled eye to pick the right box of Cheerios, but there is value in having somebody who can pick the right kind of bananas for me. Infrastructure will change and evolve. Grocery is just part of it.”
AutoStore could help retailers combine an automated pick center with
a fresh-focused grocery.
Photograph courtesy of Autostore
As younger, digital native consumers, now growing up in a streaming media, cloud-based, connected world, come of age as grocery shoppers, automation could dovetail with subscriptions in surprising ways, says Montano of Little Diversified Architectural Consulting.
“I could foresee a future where I don’t buy my refrigerator, I don’t buy my stove, I don’t buy my range, I don’t buy a blender—I don’t buy any of the things that I would have in a traditional kitchen,” he says. “My grocery store is going to lease them to me, then I have a subscription program by which I devote myself to that supplier, pretty much like Stitch Fix and some of those apparel companies.”
Experience Will Count
As e-commerce, AI and robotics make supermarkets into more efficient points of distribution, they will need balance with investments in experience that will make stores worth visiting in the future. This is where experts foresee accelerated integration with foodservice and restaurants and where some companies—including Hy-Vee and Kroger—see a bigger business opportunity.
“I think supermarkets will continue to split into either being a warehouse that ships things to a place or into a place for experience entertainment,” says Montano. “If that’s the case, then grocery entertainment, the aspect of restaurants and eating, really will be much more combined than they are today.”
Even these aspects of the food business will undergo massive disruption.
Hawkins of CART, for example, predicts that 3D printing with foodstuffs—a practice underway at a hospital in the Netherlands—shows promise. Ocado recently invested in London-based Karakuri, which is pioneering a robotic machine that the company says can make 360 meals an hour, or one every 10 seconds, combining up to 48 ingredients in precise portions. This plays into consumer trends for personalized nutrition and convenience while providing labor, distribution and ingredient savings for retailers. It could also easily fit into a vision for a future store: a robot distributor with a robot chef.
Karakuri’s DK-One robotic solution holds up to 48 ingredients, delivering personalized meals and portion sizes to customers.
Photograph courtesy of Karakuri
Making this future come to life will require a massive reinvestment in thousands of existing food stores—itself a dicey proposition. But even the process of renovation could experience effects of a digital-physical world in a decade.
“I am talking with retailers who are thinking about creating four walls and a roof to be able to drop different modules into it—the ability to change out modules and experiences and capabilities within those four walls gives it more flexibility,” Hawkins says. “Maybe you can drop in a module for seafood or for prepared foods or pharmacy. Then, a few years down the road, if you find prescriptions are all delivered by robots, you’ll be able to take that pharmacy module out and drop something else in.”
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