Reimagining The Grocery Store

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Supermarkets are having a moment. Leading brands are focussing on blending virtual experiences through contactless payments, smart shopping carts that make recommendations, and using robots to automate online orders 

Best Buy CEO Corie Barry, in a company-wide earnings call last week, shared how the brand is looking to optimize its workforce, reimagine its physical presence, and make investments to provide a better, more seamless shopping experience.

This is a recurring theme among supermarkets across the US and Europe. The competition is tougher than ever, as customers are demanding more tactile options online and more convenience in-store. 

In the last two years, Best Buy has invested in developing virtual stores because of the rise of customers interacting via phone and chat during the pandemic. The virtual stores operate via a small in-house staff and offshore call center agents. Barry said the company is already seeing results — doubled revenue from these interactions compared to Q1 last year. 

The company is also looking to continue reshaping its brick-and-mortar stores, looking at about 45 remodels for its store experience concept to  bridge the gap between online sales and physical shopping. Online sales are responsible for 31% of domestic sales, twice as high as pre-pandemic levels.

Age of the shoppable fulfillment center

Walmart continues to ramp up its supply chain capabilities. This week, the supermarket chain announced its plan to build four high-tech fulfillment centers across Indiana, Illinois and Pennsylvania. It’s important to note that Walmart’s fulfillment centers (FCs) differ in function from its distribution centers (DCs). FCs are used to store millions of items ordered via Walmart.com to be picked, packed and shipped directly to customers as soon as the next day. Meanwhile, the retailer’s DCs focus on receiving, storing and distributing products to Walmart stores.

The company is keen on its fulfillment centers following a tech-first approach. These new facilities will employ 4,000 associates focussed on jobs such as control technicians, quality audit analysts and flow managers. Plans include using the latest automation technology to provide online consumers — including members of the Walmart+ customer benefits program — with access to next- or two-day shipping on “more items than ever before”. 

Blending online and in-store

In an attempt to make stores smarter, Albertsons Cos. has partnered with Veeve Inc. to pilot “intelligent” AI-powered shopping carts that will enable customers to ring up items as they shop and pay without going through checkout. Inspired by Amazon? Perhaps. 

The smart carts use barcode scanning and computer vision to identify products as they’re added to or removed from the cart. It has a built-in scale that automatically captures the weight and calculates the price of unpackaged groceries, such as fresh produce. A touchscreen near the cart handle keeps a running total of the items added. When done, customers press the Checkout button on the screen and tap to pay or insert a credit/debit card using the adjacent payment device. The carts will roll out later this year. 

An interesting feature includes turn-by-turn in-store directions to find items across the aisles. There is scope for more customization. Customers feed in their mobile numbers so carts can pull up past information, make recommendations and keep track of loyalty points.  

Earlier this month, Albertsons also went live with consumer-generated product ratings and reviews on the retail websites of 11 of its supermarket banners. Chicago-based PowerReviews worked with the grocery brand to help customers browse and interact with authentic product ratings and reviews. Data shows that 90% of online grocery shoppers read ratings and reviews before making a purchase.  

Payment made easy

Amazon is using its arsenal of solutions to target the supermarket experience from all angles. Earlier this week, it rolled out the Amazon One contactless payment system, which uses palm-recognition technology at Whole Foods Market.

The technology uses custom-built algorithms and hardware to scan a person’s unique palm signature and speed up the checkout process. 

Conclusion

Drones are still a part of the conversation. Walmart plans to roll out DroneUp drone delivery for online orders this year. It will impact six states, enabling the retailer to serve 4 million households via the service. But the more interesting conversation is taking place behind the scenes. Ocado Group, a technology provider for grocery stores, announced the acquisition of materials handling robotics start-up Myrmex Inc. Stores are looking to speed up intelligent asset handling systems and advanced software can be a critical differentiator.