Last week’s blog post discussed the rise in automation and AI in the grocery industry, and how retailers can adapt automated technologies into their success plans. Run parallel to these advancements is a growing precedent to streamline grocery with innovative models like automated remote fulfillment, frictionless shopping, and dark stores. The demand for efficient, user-friendly e-commerce continues to rise and won’t subside post-pandemic: Consumers expect online grocery shopping to be simple and quick. Let’s explore a few more ways that grocery retailers are using innovative technologies to find solutions for challenges presented by the digital grocery ecosystem.
Robotic automation is on the rise in grocery stores across the country, whether in-store cleaning floors or in remote fulfillment centers filling orders. The pandemic and beyond has seen a massive increase in automated warehouse protocols such as Ocado’s pioneering innovations in the grocery warehouse automation market. Grocers both big and small are embracing remote fulfillment as a practice that both cuts cost and increases online-order efficiency by allowing retailers to fill more orders, faster.
Kroger now operates two Ocado-powered automated fulfillment centers in Ohio and Florida, and hopes that the success and expansion of such facilities will continue to streamline and augment order fulfillment efficiency.
Walmart, H Mart, and Albertsons have all adopted automated micro-fulfillment centers in an effort to fill mounting online orders, satisfy increasing e-commerce demand, and boost localized assortment. Thad Rueter writes in Progressive Grocer that these types of remote picking facilities allow for reduced “manual labor costs, and typically cover 70% to 80% of an order — in many cases, employees will need to manually pick bulk items and frozen and refrigerated items.” Some retailers are remote fulfilling on an even smaller scale: Like Indiana-based Munsee Meats is using small-scale remote fulfillment to make farm-to-table digital. Online orders are filled and stocked in the Automated Farmers Market—a QuickCollect GL self-serve locker system—and can then be retrieved by customers by scanning a QR code.
Remote fulfillment will continue to mold around the needs of rapidly evolving e-commerce ecosystems. Though some protocols may involve high-risk costs to increase efficiency and filling speed, retailers will have to weigh the liability of loss against the skyrocketing consumer demand for online orders delivered as quickly as possible.
The pandemic saw a rapid uptick in retail strategies to minimize contact between customers and employees. Self-checkout kiosks and contactless payment options ease concerns of social distancing and sanitation while increasing convenience and efficiency. Some pioneering grocers are embracing the concept of frictionless shopping to even further increase the amount of control a consumer has over the experience.
Grocery-convenience retailer Choice Market is one such example: The grocer recently launched frictionless-flagship, Choice: Now, in Denver. The company partnered with technology firm AiFi to create a frictionless experience that checks shoppers in using a QR code from the Choice Market app, which then tracks them as they shop and sends a receipt once they leave. The store also has self-checkout and staffed-checkout options for customers interested in a more familiar experience. Amazon Go and Amazon Go Grocery adopt a similar model, tracking customers through the app once they enter the store and charging the account once they leave. Just like Choice: Now, Amazon Go and Amazon Go Grocery stores are still staffed by employees.
One key to integrating the concept of a contactless store will be catering both to consumers that want a contactless experience and consumers that still want human interaction. Not all consumers are created the same; grocers will need to consider mixed needs and preferences when moving considering the idea of frictionless shopping.
Dark Stores & Isolated Pickup
Online ordering and pickup is here to stay, even post-pandemic. As grocers look to improve the freshness and convenience of curbside and in-store pickup options, some retailers are embracing dark store and isolated pickup point models. Dark stores—stores without “shoppers,” just customers picking up online orders—like Whole Foods’ recent venture in Brooklyn can help fulfill online and delivery orders and eliminate friction between an operating in-person store and hectic online order fulfillment.
Some grocers are also implementing isolated pickup points—such as temperature-controlled storage containers in store parking lots that function as individual units—to alleviate the stress of curbside or in-store pickup for spiking online orders. Both options remove some challenges that come with operating an in-store environment, and seem to be most profitable on a per-order basis. As e-commerce maintains growing popularity, reducing labor and time consumers spend in-store by implementing remote pick-up locations such as these may see an upward trend.
If the evolution of grocery in the COVID-19 era has taught us anything, it’s that change is often rapid and enduring—and though e-commerce is nothing new to retail, innovative technologies will continue to shape the way consumers shop online, in-app, and in-store. Adapting to the new digital ecosystem of grocery may be turbulent for many retailers, but as models such as remote fulfillment, frictionless shopping, and dark stores proliferate, advancement will become critical in a competitive market—and the digital consumer will thank grocery retailers for keeping up.
To learn more about how technology is changing the future of grocery and consumer trends in 2020 and beyond, download our e-book report on a 2020 Consumer Survey, Taking Stock of 2020: What Grocery Retailers Need to Know About Post-Pandemic Consumer Trends. In this e-book, you will learn about:
- Changes in Consumer Behavior: COVID-19
- Embracing the Future of Omnichannel Shopping
- Sustainability: What Consumers Expect & How Retailers Can Meet Expectations
- In-Store Shopping vs. Online Shopping: How the Management of Expired Foods Impacts the Consumer Experience