With Amazon’s pending acquisition of Whole Foods Market, there may soon be brick-and-mortar locations for the Seattle company to experiment with new shopping and pick-up experiences.
(TNS) -- Here’s a vision for the next decade’s grocery store: It doesn’t include the aisles of cans and cardboard boxes that form the heart of most supermarkets today. Such products will be automatically ordered through “smart kitchen” devices that also restock products like milk and cereal a few days before a household runs out. Shoppers will be able to pick up those products from lockers on the outside of the store.
Fresh produce, some of it from farmers’ markets, could be one of the few types of groceries that largely avoid automation. So says Phil Lempert, the founder of SupermarketGuru.com and food trends editor for NBC’s “Today.”
“The center of the supermarket has been declining anyway,” Lempert said. “So the supermarket becomes 20,000 to 30,000 square feet of produce. And the produce people are going to talk to (customers), and the fishmonger is going to be talking to (customers) ... and there’s a registered dietitian (customers) can ask about healthy foods or reading labels.”
The industry is already heading toward auto-ordering. Samsung introduced its Family Hub line of smart refrigerators last year. In June, Amazon came out with its $20 Dash Wand, a tiny remote that doubles as a fridge magnet and bar-code scanner. Users can have the Dash Wand add to their grocery list by using Amazon’s voice assistant Alexa, or by scanning the bar code of an item they wish to restock. And grocers already are bringing nutritionists into stores to talk with shoppers, according to California Grocers Association spokesperson Dave Heylen.
With Amazon’s pending acquisition of Whole Foods Market, there may soon be brick-and-mortar locations for the Seattle company to experiment with new shopping and pick-up experiences. Amazon already offers AmazonFresh Pickup in two Seattle locations, where users order groceries online and drive to a station where workers load grocery bags into their car.
Amazon did not respond to a request for comment, and Whole Foods declined to comment because its deal with Amazon has not yet closed.
Most analysts agree that grocery stores are not going away. Just 7 percent of consumers in the United States bought groceries online in May, according to a report by the NPD Group. “Even among those people who shop online, three-fourths of their grocery dollars still go to brick and mortar,” said NPD analyst Darren Seifer.
And online retailer Amazon’s experiments with physical stores suggest it sees value in the venture, despite widespread concern about the “end of retail.” However, as online ordering continues to grow, stores could one day bid the air-conditioned maze of cereal, canned food and ice cream goodbye. Traditional grocery chains face substantial competitive pressure — mostly because there are better, time-saving alternatives to pushing a grocery cart up and down endless aisles under fluorescent lights.
“Traditional groceries in the long term kind of become a dinosaur,” said grocery industry analyst David Livingston. “The whole business model just isn’t sustainable long term.”
Lempert of SupermarketGuru.com believes that stores will survive — not least because they allow people to see and feel items — but they have to be better.
“There’s nothing that’s ever going to replace the experience of someone picking and smelling their food,” said Marcy Coburn, executive director of the nonprofit Center for Urban Education about Sustainable Agriculture. “No matter what tech innovation or product comes along.”
Coburn’s nonprofit runs San Francisco’s Ferry Plaza Farmers Market, a popular stop for locals and tourists. Even as delivery services like San Francisco’s Instacart take hold, the number of farmers’ markets has grown in the Bay Area; Coburn estimates that there are roughly two dozen in San Francisco now, and 300 in the Bay Area overall. By contrast, “we were somewhat of a novelty in the city” in 2004, when the Ferry Building market got its start.
At a recent farmers’ market in Ferry Plaza, San Francisco resident Craig Fatland bought strawberries and fresh green beans. He buys nearly all his produce at the market, partly because he enjoys interacting with farmers but also for environmental reasons. “I want to reduce the carbon footprint,” he said. “Delivery defeats some of the purpose.”
But for farmers to reach a broader audience in the age of Amazon, they will likely need to increase their presence online, partner with meal-kit distributors and spend more time marketing than was once necessary. “This is hard for farmers, because you’re talking about the oldest profession in the book,” Coburn said. “It’s a hard sell for farmers to say they have to tweet about it or Instagram it.”
Sara Evett and her mother took over Watsonville’s McGinnis Ranch when her grandfather retired from farming. Since then, she’s started accepting credit card payments at the farmers’ market using Square. “My grandfather never would have done that,” she said. The farm also maintains an Instagram account and a Facebook page. “I just felt it was important to have some kind of presence,” she said.
New York University business Professor Arun Sundararajan thinks that French startup La Ruche Qui Dit Oui (French for “the hive that says yes”) shows one possible future for farmers’ markets. It now serves more than 1,000 locations in Europe. First, a location manager finds out what the farmers have for sale on a particular day. Then customers place their orders online and congregate in a community market to pick up orders directly from farmers.
Though not yet operating in the U.S., La Ruche has received funding from Union Square Ventures, a New York firm that has backed Twitter and Tumblr in the past.
Sundararajan sees traditional grocery stores as “under severe threat,” and sees some combination of online delivery, urban farming and farmers’ markets as the future shape of the grocery industry. “This is a huge market — I doubt whether there’s going to be one single mode,” he said. “We’ll always have variety.”
©2017 the San Francisco Chronicle Distributed by Tribune Content Agency, LLC.