Technologies and Trends shaping the Supermarket of the Future

Technologies and Trends shaping the Supermarket of the Future

Traditional bricks-and-mortar supermarket chains, seeing that they are at risk of losing power and profits in this revolution, are strengthening their own e-commerce capabilities. The value attached to Whole Foods Market by Amazon will have come as a wake-up call: established food retail chains must use CRM data to increase sales.

It is true that Whole Foods Market has stores only in the USA and the UK, and that today’s online innovators such as Instacart are mostly US-based - but the shift to selling more food online will quickly sweep through developed nations.

During the next decade the global grocery e-commerce market is forecast to expand at a compound annual growth rate of 13.5%, from an annual value of €43 billion today to €135 billion by 2025.

Business analysts note that although e-commerce players are making efforts to establish a foothold in the USA and Europe, they face serious challenges here because the existing grocery market is saturated and margins are low. This means global growth in food e-commerce will be driven by Asia, where there is highest consumer willingness to purchase groceries online, combined with rapid urbanization, low labor costs, and a relatively undeveloped retail market.

To give just one example of growth potential, in China, the world’s most populous nation, the e-commerce share of the grocery market is currently only 4.2%. To put this into perspective, in nearby Japan the share is 7.2% and in South Korea it is already 16.6%. This is a sure indicator that businesses such as the Chinese multinational conglomerate Alibaba Group, owner of Alibaba.com, will be at the vanguard of big changes.

Consumers’ expectations will rise

Widespread food shopping online and fast deliveries to customers’ front doors will be just the beginning of this brave new world. Computer codes and algorithms will also enable supermarkets to personalize their offering to customers, using data gathered about shoppers’ individual habits and preferences.

The “Recommended for you” web-page so familiar to buyers of products such as books and electrical goods can also direct shoppers towards the foods they like.

Grading and inspection equipment - at point-of-origin, prior to shipment to the supermarket, or from the on-line dispatching warehouse - can ensure the produce has the desired size and ripeness without bruising or mold. In addition, sorting equipment at different stages in the supply chain will be able to provide essential information on sizing, quality and other quality markers.

In readiness for these needs, the sorting machines made by TOMRA Group are being enabled to share data to ensure the highest standards of quality and safety. These machines are also being fine-tuned in data-gathering and application to help processors pick the correct incoming material, to get to the final product in the most efficient way.

Traditional supermarkets fight back against the online disruptors – and information about shoppers’ preferences and habits will be an important weapon. Consumer-facing technologies, such as shopping-cart-mounted devices or smartphone apps, will steer shoppers towards the aisles and shelves where they are more likely to make purchases. Sensors in the store’s shelves will keep track of the items customers put in their carts and bill their mobile payment system as they exit the store.

Another likelihood is that supermarkets will remain the same size but change in concept, becoming destinations for click and mortar shopping. Because retailers need to offer consumers a consistent omnichannel experience, stores will connect the physical and digital worlds. Here, consumers can see and feel products they might order online. Here, too, the online product offering could also be accessible via interactive screens.

These changes align with the forecast growth in consumer demand for healthier, high-quality produce, more choice, and greater convenience – a demand which will increase massively as household incomes rise in developing nations, bringing 70 million more people globally into the middle-class every year.