Food Halls, Greenhouses, Fresher Experiences Distinguish Supermarkets of the Future

Help stores stand for taste, education, excitement and empowerment

From the February, 2018 issue of The Great Grocerant

Nearly 30 years ago, SupermarketGuru Phil Lempert shared his fresh food-centric vision for retailers going forward.

Recent initiatives have moved grocers closer to it today. Still, he contemporized his call for change with his release of 10 food trends that will shape 2018: “Rethink the four-walled structure, much the way Apple has done for its new headquarters…. wake up each morning thinking about how we can make the shopping experience better.”

He cited promising developments, such as:

• Food halls popping up throughout the United States, bringing excitement. Food halls grew by 37% in 2016. Hy-Vee has done its version in-store, as have ShopRite and Mariano’s to name just a few. The message to shoppers is “we are all things food.” There is the new model that Reebok and B8TA, both in Santa Monica, CA, are testing: showroom-only stores where products can’t be purchased, just displayed and available to try. It's a great concept to introduce new food products, to read the labels, to taste, to ask questions — a mini-model could be incorporated in every store.
• Eataly World opened Nov. 15, 2017 in Bologna, Italy, with a million square feet of everything food: 40 farming factories, 40 restaurants, six educational rides — a Disneyland for foodies if you will. They predict 10 million visitors a year (Disney World attracts just under 20 million). This is a blueprint for ideas we should be incorporating in our stores. Taste, education, excitement and empowerment — four things every supermarket should stand for.
• In Milan, Italy, the Coop — the supermarket of the future — uses technology to give shoppers total transparency and total information: how we should be using artificial intelligence and augmented reality and move it to everyday shopping.
• In Japan, supermarkets have put greenhouses on top of, or adjacent to, supermarkets. Why not put a greenhouse right inside the store and allow shoppers to pick their own items right off the vine? After all, we have beer and wine coolers where shoppers enter and select their brews; why not for produce?

Mr. Lempert gave an experiential nod to Coles in Australia, which launched a “quiet hour” once a week where there are no PA announcements, no music, no stocking shelves, no commotion, to offer the parents of the one-in-six children who have a developmental disability a haven to shop.

His reimagined supermarkets include new strides in sustainability, energy-efficiency, shopping convenience – and ultimately the relationship between retailers and their customers. For example:

• Waste-free supermarkets continue to grow globally, but here in the U.S., only a few exist; in.gredients (Austin, Texas), in Denver's Zero Market and in Brooklyn's Fillery have made commitments and should be a model for all stores to learn from.
• It’s time to build stores that are truly energy-efficient with solar glass blocks and solar roofing that not only reduce energy, but also create additional energy that could power an entire store.

“Online grocery is at the top of everyone’s list, and there is no doubt that it will continue to grow and evolve. Click-and-collect will become the dominant online channel for all the reasons described here,” he said, citing demand: “Today, approximately 25% of all grocers offer this service. KMPG reports that almost 75% of shoppers would use this service to avoid delivery costs. And the International Council of Shopping Centers found that 61% who do use click-and-collect also come in the store and make additional purchases. Shoppers do want to have a relationship with their supermarket. They don’t want the experience to be faceless.”

Mr. Lempert expects online delivery “will become more fractured, and more local. As we see these companies popping up on the landscape, companies like Milk & Eggs, GoodEggs and Thrive Market are creating a new model that serves just a local area with a specialty. They have developed unique, and sometimes proprietary, relationships with farmers and purveyors to offer curated offerings. They are not trying to offer the 40,000 products that are on the supermarket shelves; in fact, many of the products they offer aren’t on the supermarket shelves at all.”  Noting the recent launch of Boxed Spirits in California — the first bulk-sized alcohol e-commerce play that is directed to steal business from Costco and Sam's in this category – he predicted “the larger national and regional delivery players will have to shift to the auto-replenishment model.”

One of the biggest threats to traditional grocers is being created by blockchain technology. INS Ecosystem, which wants to reinvent the way people shop for food, has raised over $60 million, and Unilever and scores of other manufacturers are signed up as partners, Mr. Lempert said, explaining “the goal is to out-Amazon Amazon with even greater efficiencies and to have brands selling directly to consumers, eliminating the need for retailers entirely.

“As much as tech might want to disrupt the way people shop and make everything more efficient, let's remember that this business is all about people and our relationship to shoppers,” he stated. “It's time to imagine just what a supermarket can be.”