Cashierless stores and pop-up shops: Food retail responds to COVID-19

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As we’ve learned, especially of late, the future is unpredictable. We look to the past, hoping to identify patterns explaining our current situation and the potential changes coming our way.

In terms of the coronavirus, we have to go back a long way to find worthwhile comparisons. Of course, we look at the flu pandemic of 1918-1919. The Great Depression, World War II, and September 11 are also common events to analyze. They were dire situations, global in scope, each leading to radical changes in how we live today.

The Great Depression led to massive change for the banking industry. World War II revolutionized American industrial production. And the events of September 11, 2001 reshaped travel, security, and even privacy.

So how will future generations view this crisis through the lens of history? What facets of everyday life will they point to and say: “We do this because of the COVID-19 outbreak in 2020”?

As a product marketer, I think about consumer behaviors. As a guy with a healthy appetite, I think about food.

So naturally, I keep a watchful eye over the food retail industry. We’re already seeing an altered trajectory of our consumer behaviors, especially when it comes to food shopping.

218% surge in delivery: How COVID-19 is changing food retail

One of the clearest indicators of the changed trajectory is the surge in online food shopping.

Comparing the average daily app downloads from February to March 15, TechCrunch found that Instacart, Walmart Grocery, and Shipt saw surges of by 218%, 160%, and 124%, respectively.

This makes complete sense during this shelter-in-place phase of the pandemic, but also has major implications for the future of food retail. If the grocers’ online service proves to be safe, easy, and personalized, it may accelerate the ongoing shift toward digital for this industry.

Of course, in-store food shopping is going to return. The big question is: How will consumer behaviors change? Most likely, the actions taken by stores during the pandemic will greatly affect consumer choices later on.

For instance, the pandemic has shown the value of clean, safe shopping spaces.

And like a chain reaction, this value will affect consumer views. From now on, many shoppers – including myself – will prioritize stores that have taken the necessary precautions to keep consumers and employees safe while providing their essential services.

Bare shelves – but why?

There’s also the demand/supply issue to consider. Many of us dashed to grocery stores for staples and an extra supplies of chips and ice cream. (Okay, maybe that was just me, but tons of people flooded grocery stores, which led to empty shelves). This situation was not a result of lack of food, but more the spike in demand that pinched stores’ supply chains.

Yet some stores are managing this surge better than others. Here again, consumer sentiment comes into play. Brands who have best mitigated the disruptions and kept their shelves better stocked than their competitors will earn more loyal customers as a result.

Lastly, there’s the issue of communication. The pandemic has highlighted the role of the grocery store as an essential service. These stores, and the heroes who work in them, have shifted their operations to address the rapid spike in demand and to comply with new government guidance.

They’re shifting hours to help senior citizens shop with lower traffic. They’ve put tape on the floor to help us maintain six feet of separation at checkout. The order-online-and-pick-up-curbside service is seeing its popularity skyrocket. And delivery services are evolving with contactless delivery now in widespread use.

For many stores, it’s a monumental marketing lift to communicate all these new ways to help. From simple messages such as, “Hey, our hours are changing”, to the announcement of a new curbside pickup service, the stores who can segment their audience effectively and send them relevant, timely updates are the ones who are helping the most.

So, what does the future of food retail look like?

Some might argue that COVID-19 only hastened the arrival of the future of food retail; that the changes were already happening before this life-changing event.

A cashierless store concept has already been in play, with the improvement of the customer experience at the heart of it. Consider the below avec box concept – the store contains a variety of fresh foods, everyday items, and important household products.

This new way to shop is really simple:

  • Download an app
  • Register your personal details
  • Walk to a shop
  • Find the things you want
  • Pay via the app
  • Leave with your items.

One key advantage of this futuristic food retail business model: These stores’ streamlined implementation means they can be built rapidly to serve customers in areas of greatest need.

Think about the possibilities for future pandemic or emergency responses. With some simple updates, these pop-up stores could allow you to schedule a time to enter – this would help with social distancing.

The ability to adapt the supply chain optimizes just-in-time manufacturing efficiencies along with route logistics of essential items to stores. And by knowing your customers’ shopping preferences, you can predict inventory to the meet the types of fluctuating demands we’ve seen during this crisis.

Even beyond a crisis, these new types of stores just might alter how we shop for food. Instead of big grocery stores that serve a broad audience, new stores could be available locally with hyper-personalized inventory. It’s like a corner convenience store just for you.

So, don’t be surprised if future generations look at these pop-up, cashier-less food markets as part of their regular shopping routines that offer exactly what they want, exactly when they need it.

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Ratul Shah
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Ratul Shah

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