At Groceryshop 2018 in Las Vegas this week, thousands of attendees from CPG brands to grocery retailers, ecommerce software vendors, and tech startups met to share ideas and lessons learned in pursuit of adopting a digital approach for their business. IGD’s Global Insight Director Ben Miller shared five predictions on where the future of the online grocery store is headed. His firm has forecasted $227 billion in growth for the grocery sector over the next five years. IGD expects online grocery market share in the USA to reach 3.5% over the same time period.
Ecommerce enables grocers to extend the digital shelf with greater selection than they are able to provide in-store. Where no physical constraints exist, the online aisles can offer up all the items that appeal to an individual’s diet and preferences.
In the future, grocery retailers will act as personal shopping assistants by harnessing the potential of smart devices to truly connect shoppers with helpful tools. Miller believes it may look a bit like what cosmetics brand Coty is doing today by using facial recognition software to identify over 2000 looks that will work for a consumer’s unique facial features. These looks are presented with tutorials on how to apply their makeup and once a look is selected, the products are seamlessly added to cart. Over 80% of new Coty customers are using this tool to shop. Wouldn’t it be wonderful to pick a recipe for dinner and have all the ingredients automatically show up in the cart? No browsing the aisles for individual items necessary.
Consumers demand convenience. Next-day delivery is out; next-hour is now expected. The only way to get there is for grocery retailers to become more efficient. And the technology is already available to help us get there — from robots in the supply chain to artificial intelligence supporting more precise inventory forecasting and promotion planning.
Consumers won’t note the difference between online and in-store shopping in the future because it will be frictionless. They will be able to shop the physical shelves while easily accessing digital product information such as nutrition, ratings, and reviews, and then pay for items in their physical basket without interacting with a clerk.
Perhaps in the future the physical store won’t exist at all or at least not in the way we think of it today. Shoppers will be able to interact with a digital shelf in a smaller footprint store that doesn’t need to carry as much inventory. After all, Amazon already unveiled a pilot grocery store in Amazon Go that is frictionless and leverages smart devices so a shopper can grab items from the shelf and go. The app figures out payment by tracking shelf item movement, much like travelers now hail rides from Uber and the app figures out payment without any effort from the passenger.