Opinion

The Future of Grocery Shopping Just Arrived

04 March, 2016 Share socially
The launch of Amazon Pantry in the UK (Prime Pantry in the US) should be seen as a landmark moment in how consumers shop for groceries. Landmark not just in the familiar context of traditional supermarket doom stories but in the more positive context of opportunity that this move represents.

At a most basic level, I believe that in the future few, if any of us, will buy and transport groceries home in cars. Future generations will consider this as bizarre as video rental stores have become today.

Instead, we will buy nearly all our groceries in the following 3 ways:

1. ‘The Super Curator’

Those who can afford it will have groceries home delivered, completely on-demand. This will mean not just exactly when they want it (even hourly but probably daily) but exactly what they want – global brands, local brands, niche brands, fresh brands, rare brands as well as fresh, ‘picked this morning’ produce and complete, ready to eat foods and drink.

The providers of this service may be made up of some of today’s more speciality stores or providers. Whole Foods may evolve into this space and Hello, Fresh is currently interesting too. However, these will come under pressure from even more targeted, specialist individuals who are expert in understanding their client’s individual (functional and emotional) needs and picking, discovering and recommending perfect foods at just the right time. Think ex-advertising account handlers with a passion, knowledge and network for food who can conjure up the perfect, even unique, ‘meal experience’.

Face-to-face contact will be the primary means of access via mobile devices and on platforms like Skype. There is also every chance that these ‘specialist individuals’ will eventually be robots.

2. ‘The Super Discounter’

Those who cannot afford to use a Super Curator all the time will use a Super Discounter. Huge warehouse organisations like Amazon and CostCo (and perhaps Aldi and Lidl etc) will deliver industrially produced, good quality groceries and brands for every taste at low margins. These will be accessed online in similar ways to today and delivered (in carbon neutral and eventually self-driving vehicles) at pre-set time slots.

In the UK, Amazon Pantry has perhaps just launched the first of these via a partnership with Morrisons, a lower/mid supermarket player, that has struggled like most of its peers although especially so with online delivery. That said, it has retained positive brand associations for freshness. The partnership would seem to suit both well – Amazon offers Morrisons delivery and scale while Morrisons offers a supply chain operator food freshness cues. It will be intriguing to see how this develops from both a brand fit and a consumer appeal perspective.

3. ‘The Super Convenient’

The only other meaningful spending in the sector will be convenience and impulse driven. Immediate consumption and spontaneity will be the key drivers and these stores will focus on fresh, ready to eat foods typically resembling some of the more popular and ethic fast and casual dining outlets today. Popular, democratic and generally good quality, they will command a premium price regardless of whether they offer an eat-in experience or not – take-out or take to eat at home will probably be the norm.

So what of the rest…

What will happen to today’s mid-markets like Carrefour, Albertsons, Auchan, Sainsbury, Asda and Tesco?

It’s going to be really tough.

Some, like Booths in the North West of England, will hang on perhaps for a generation due to local connection. Co-operative & social-orientated players likewise but most will disappear or significantly diminish.

The odd player that does survive will focus on smaller, urban store locations and will be almost exclusively dedicated to people who have a higher than average interest in cooking/ food or who seek out specialist foods and diets, such as sports/ performance nutrition. This is an exciting new niche that offers lots of opportunity too. Expect to see celebrity chefs being joined by other aspirant entrepreneurs all looking to launch multi-country brands into this new, multifaceted specialist space.