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Unmanned stores top list of innovative grocery concepts

New report from Euromonitor says concept could benefit rural consumers, although technology and trust are two big obstacles

An unmanned grocery store in small-town Sweden and farmers’ market stands at gas stations in Estonia are among the innovative grocery concepts featured in Euromonitor International’s latest report, What’s New in Retail: Emerging Global Concepts in 2016. 

Euromonitor’s global retail experts reviewed more than 100 submissions from analysts around the world to identify emerging concepts in four key areas: Grocery, non-grocery, non-store and digital.

According to Euromonitor, the winning concepts “represent the future of retail and the ever-evolving shopper environment.” The winning concepts were determined through seven criteria, ranging from enhanced customer experience to innovative omni-channel strategies and new hybrid formats.

Described as the first unmanned shop in Sweden, Näraffär is a 45-sq.-foot store in Viken, a town of approximately 4,200 people on the country’s southern tip. The store carries grocery staples such as milk, bread, sugar and canned foods, which customers purchase by scanning barcodes.

Shoppers must be registered, have bank identification and go through a credit check to be approved to shop at the store—which houses six surveillance cameras to dissuade customers from shoplifting. Invoices are sent to shoppers once their transaction is complete.

Michele Malison, retailing analyst at Euromonitor in Chicago, says that the unmanned store concept has also been introduced in the U.S., through a Minnesota-based store called Farmhouse Market.

Established in 2015, Farmhouse Market caters to the approximately 40% of Minnesota’s population residing outside of major metropolitan areas and have less choice when it comes to retail food.

The store’s approximately 275 members (who pay an initial registration fee of US$99 and annual renewal fee of $20) can shop around-the-clock, while it is also open to the public on Tuesdays, Thursdays and Saturdays.

“For rural towns where the population is declining and retailers are exiting because the business isn’t viable, this model of unmanned or minimally staffed stores can be very helpful,” says Malison, who says that consumers are becoming increasingly comfortable with self-service.

The Euromonitor report says that success for unmanned stores hinges on their ability to overcome two key challenges: Technology and trust.

The unmanned store concept requires its shoppers to have some familiarity with smartphones and apps, with Euromonitor saying that much of their customer base is likely be elderly shoppers on fixed incomes and a “relatively low” comfort level with technology.

At the same time, a potentially large and anonymous customer base also poses challenges for the retailer, says the report. However, Malison says that’s unlikely to be a deal-breaker in small communities where residents tend to know one another.

The report also profiles the introduction of farmers’ market stands at select Alexela Oil stations throughout Estonia. Alexela offers the stands to local farmers free of charge, enabling them to sell home grown items such as fruit and vegetables, honey, milk, jam, etc.

According to Euromonitor, the concept also encourages new and existing shoppers to frequent the company’s stations, helping it build a loyal customer base.

Malison says their inclusion in the report reflects the growing importance of farmers’ markets – and healthy eating in general – in what she calls “the new norms” of consumer preferences.

“Consumers continue to seek out fresh, artisanal and organic food items, and they care about responsible sourcing, and all this together helps define what it means to be living a healthier life,” says Malison. “Farmers’ markets are often associated with fresh, organic and locally produced products, but despite the demand they’re harder to access for people in urban areas who live busy lifestyles.”

Malison says that farmers’ markets are popping up in non-traditional environments. The operator of the Serdika Centre in Sofia, Bulgaria, for example, recently introduced a farmers’ market that operates on the mall premises from 10 a.m. to 8 p.m. daily, rather than only on Saturdays and Sundays like traditional markets.

The market was launched in association with the Sustainable Society Association, which works to develop farmers’ markets in the country’s largest residential centres.

The complete Euromonitor report can be accessed here (registration required).

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