What will the grocery store of the future look like?
Imagine a world without grocery stores, Doug Stephens, futurist and founder of Retail Prophet, asked the audience this question soon after taking the stage at the Retail Council of Canada’s Store 2018 recently. “Raise your hand if you have trouble imagining that.”
Many in the audience did have trouble imagining such a world. And that’s no surprise. Stephens explained that for a lot of us the grocery store is our earliest shopping experience, one that continues throughout our lives and that today we visit the supermarket, on average, 2.2 times per week.
“But how many of you can imagine a world without Tower Records, Fotomats or video stores?” asked Stephens. Once prolific on the retail landscape, all these business models have gone by the wayside. Of course, we still have access to these products—music, photos, video content—but how and where we access them has fundamentally changed.
Over the last century little has changed at the grocery store, however, in terms of the economic model or customer experience, said the Reengineering Retail author. But seismic changes are afoot—brands are under siege, making the idea of selling direct to consumer increasingly attractive. Retailers “aren’t having a picnic either,” competition is fierce and it’s tough for grocers to make money. While Walmart and Amazon duke it out there’s also tremendous disruption happening in the industry and those mired in the old way of doing things are vulnerable.
Consumers are changing, too. Today’s consumers want their grocery shopping experience to be as frictionless as their streaming service or their Uber rides, Stephens said. He envisions a future where each of us has a digital agent to complete tasks like making reservations and purchasing products. It’s a future where the store increasingly comes to the customer, whether through the likes of Amazon, subscription services or other platforms.
Will physical stores endure? “In my opinion the future of a chain, perhaps like Loblaw but you could insert any brand name in there, will not be that those stores will go away, but I think it’s entirely possible that three quarters of them will go dark,” said Stephens. What we call a store today will become a mini warehouse tomorrow, local fulfillment stores for online purchases and for merchandise that’s needed at full-line stores. “And those full-line stores won’t necessarily be invested in the selling of product and obsessed with sales per square foot; they’re going to be interested in selling experiences with those products.”
Experiences he said, that you might find today at Italy’s Eataly World, where consumers can have an immersive food experience learning how to make pasta or gelato. Or Alibaba’s technologically-driven Hema stores in China where shoppers can instantly access a wealth of information via their mobile devices. He also pointed to the fast-growing b8ta chain in the U.S. that offers consumers a chance to discover, try and buy a curated selection of tech products. At b8ta stores, every interaction shoppers have with the products are measured and brands subscribe to get this data. Such an approach creates a new revenue stream for retailers, said Stephens.
“I think there’s an opportunity to tell a way bigger story in the grocery category,” he said, adding that grocers shouldn't rely on retail clerks to tell that story. “I’d like to see more brand ambassadors when I go to these incredible grocery stores of the future. I might want to talk to a sommelier or a fitness coach,” he said.
On a final note, Stephens cautioned that too many companies are waiting to see what future they will inherit. They’re waiting to see what Amazon or Alibaba do next and how they will respond. But futurism, he says, is not about predicting the future. “It’s about understanding the past, the present and really embracing that,” he said. “Once you understand that, it’s about executing and engineering the future that you want.”