If the pandemic taught us anything it was how to modify our shopping habits. We Venmoed, learned to pick up curbside, used Instacart elves to squeeze our melons and tried on virtual approximations of the real clothes we purchased.
Last week I hung around ShopTalk for Women, a curated network of women in retail, where two new trends caught my imagination. Both of them might permanently alter the traditional grocery shopping experience. One is “Grab and Go” shopping and the other what’s called “Micro fulfillment “centers. Together they paint a picture of a near-future shoppers’ world devoid of sales folks and checkout lines, or even, because of those micro fulfillment centers, devoid of aisles. This future picture sounds efficient, capable of eeking out margins and streamlining the grocery process. But it’s the antithesis of making a trip to the store a social experience, or even very human at all.
Even though many of us may miss catching up on the National Enquirer at the checkout line, Grabango and companies like it believe that no checkout line should get between the shopper and the exit. They see checkout as a store’s biggest pain point for both retailer and customer.
“Retail is highly competitive, margins are thin, and loyalty is critical to success,” says Meredith Valentine, Grabango’s VP of Marketing. The company has quietly been retrofitting certain existing grocery stores, including Giant Eagle GetGo store and unnamed, large-format grocery store(s), with what they call G-Rails. These sleek, industrial-looking beams hanging overhead are studded with nearly invisible cameras and sensors. The unobtrusive technology detects humans (though only as blobs that aren’t identified as male or female, and without facial recognition) and the stock on shelves. A shopper can walk into a grocery store, pick up a few items, walk up to check out, and scan the QR code found in their Grabango App.
While the company began installing the systems before the pandemic, it has seen customers getting more comfortable with using apps at the same time as they have a desire for “less dwell time in store,” as Valentine puts it. Comfort with such systems is thus spreading across a much wider demographic range, she says. You’d think cameras capturing every move a shopper makes would be a data storage nightmare, but Grabango’s software learns to store only relevante “incidents,” like someone taking a candy bar from the shelf — a much less expensive data storage model. Other companies like Standard Cognition, a close competitor, use similar technology. Both focus on retrofitting existing stores.
Traditional grocers are clearly warily eyeing Amazon, which now has 26 Amazon Go convenience stores as well as two Amazon Go supermarkets, where you identify yourself with a special Amazon app on entrance, pick up what you want and just walk out, with the total cost billed to a pre-registered credit card. Amazon has also opened 11 Amazon Fresh supermarkets, currently only in California and Illinois, but has plans to build at least 28 more across the country, according to Bloomberg. In these full sized supermarkets, the scanning is done on special “Dash” smart shopping carts, though Bloomberg reports Amazon is testing its Go store “just walk out” technology in at least one Fresh supermarket.
Grabango and Standard Cognition are all about retrofitting existing stores so that any retailer, from a supermarket giant to a local corner store, can adapt. Standard Cognition has also used its technology in locations like stadiums, making sure people can grab their food and get back to their seats without missing the action.
Despite the fact that many grab-and-go proselytizers say now-unneeded checkout clerks will be redeployed to other jobs in the store, I find that suspect. After paying for installing and maintaining the systems, it’s likely there will be substantial pressure to reduce store personnel.
You may remember my December Techonomy column about ghost kitchens. (They are restaurants that only fulfill online orders, with kitchens often on upper floors of buildings or otherwise tucked away from view.) Well, think of micro fullment centers as the ghost kitchens of grocery. Fabric is one of the most notable players in micro fulfillment. Stores, they propose, should not even have retail space, or allow customers in at all. Rather, they aim to fulfill e-shopping orders that will be packed not by humans but by robots. A customer places an order online, a robot fulfills that order, and it can be picked up close to home, often at what might have once been a vibrant in-person supermarket location.
Do the math. Fulfilling a typical $110 online grocery order with human labor takes about an hour, and costs the store around $20 in labor. Human pickers roam through a warehouse or a conventional store picking items off the shelves. According to an article in Forbes, human picking of groceries is a money losing proposition for retailers.
Robots, combined with the dramatic rise in curbside pickup we’ve seen at numerous chains including Walmart, Kroger and Target, are seen by many in the industry as a new golden grail to compete with the likes of Amazon. OK. Maybe a sterile, efficient future for grocery shopping will mean a bit more margin for retailers, and a bit more efficiency for shoppers. But I can’t help thinking that as we emerge from the pandemic we’re going to want to squeeze the Charmin and make idle talk about the weather with checkout clerks again. I sure want to
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