CAN AMAZON FIX THE GROCERY GAME?
Online retailer is going where many have gone — and failed — before it, all in a bid to make food shopping a little easier
In Amazon Go’s world, shoppers walk into a supermarket, grab an item and walk out. No scanning. No card swiping.
Sounds fantastic. But will it work?
Retailers and tech companies have long tried to fix what we hate most about grocery shopping — time wasted in long lines, tedious barcode scanning and waiting around for receipts. They’ve tried everything from self-checkouts, to home delivery, to mobile pay — even refrigerators that order for you.
Some fixes have worked (kind of ) and some have been massive fails. Here’s a list of six that have been part of the grocery checkout mix for the past decade or so. SELF-CHECKOUT Too often shoppers ran into problems scanning or otherwise getting the systems to work. While the lanes still remain in many stores, others are beginning to pull them out. The parent company of Albertsons, Vons and Pavilions said last month it is taking self-checkout lanes from 96 stores of 352 it has in southern California, according to the Or
ange County Register. As of 2016, 41% of shoppers in North America have used them, according to Nielsen. DELIVERY REBOUND Once upon a time, all grocery stores delivered. You called and put in your order in the morning and later that afternoon the delivery would arrive with food to make dinner. The rise of supermarkets and car ownership ended that for the most part. But the concept has come back several times, though not always successfully.
In the dot-com bubble of the late 1990s, Webvan was the poster child for online grocery delivery. It offered grocery delivery in 10 U.S. markets, launching in 1996 and going bankrupt in 2001 after losing millions of dollars. Other dot-com grocery delivery businesses that launched at the time included Peapod, HomeGrocer .com and Kozmo.com. Only Pea- pod remains, though much diminished from its heyday.
Delivery of groceries ordered online began to gather steam again a few years later. Large supermarket chains such as Safeway and Vons began offering online shopping with delivery. Companies such as Fresh Direct, InstaCart and Amazon Fresh, as well as variants tied to local stores, began to offer the convenience of ordering online and having the items delivered within a given window.
And while the services offer ease and convenience, they also come with drawbacks, which could account for the fact just 2.4% of total U.S. grocery sales in 2015 were online, according to Internet Retailer.
Finding a window to have items delivered is often difficult. Orders don’t always come exactly as placed. Sometimes items are unavailable, but online ordering makes the kind of on-the-fly substitution possible. Finally, consumers remain somewhat leery of having someone else pick out their fruit, vegetables and meat. SELF-SCANNING In Europe, Diebold Nixdorf, which makes cash registers, has launched a TPiSHOP app. This allows shoppers to avoid checkout lines by scanning each item they want to buy with their phone or with a hand-held scanner they carry with them as they walk through a store. The system is currently only available in Europe, said Dave Kuchenski, director of design and new technology incubation, but the company hopes to introduce it into the U.S.
But it’s not something all shoppers readily embrace, said Stu Lipoff, a fellow with the Institute of Electrical and Electronics Engineers and a partner with the consulting firm IP Action Partners.
“There’s something really artificial and uncomfortable of picking up a scanner and carrying it around when you’re in a store,” he said. DASH AWAY In an effort to make ordering groceries online effortless, Amazon in 2015 launched the Dash button. These small lozenge-shaped devices have their own Wi-Fi and come branded with different grocery items such as Tide detergent or Huggies diapers. Customers stick them to their washing machine or inside a cupboard, then click the button to reorder when they notice they’re running low on something. The Dash is synced to a user’s Amazon account. The buttons are now available for more than 100 items. But it’s unclear whether consumers are embracing the idea. Slice Intelligence said in March that only half the people who’ve bought one have used it. SMART APPLIANCES Smart appliances are the coming trend, but the actual follow-through is still being worked out. Samsung has focused heavily on this, with a line of refrigerators with built-in touch-screens that can keep track of food in the fridge and provide recipes that match the inventory. The Family Hub refrigerator comes with a smart screen preloaded with a MasterCard grocery purchase and delivery app. It integrated with grocery partners FreshDi- rect, ShopRite and MyWebGrocer. The refrigerator also works with Amazon’s Alexa voice-control platform, allowing consumers to speak their grocery list and have it automatically ordered.
An Internet-connected fridge is not the same thing as a smart phone, however. Customers who bought early Samsung smart refrigerators reported trouble when Google changed its Calendar program, which appears on the Family Hub screen. There was no way for customers to upgrade their refrigerator to accommodate the upgrade, leaving them with a fridge with a useless screen. MOBILE PAYMENTS It has been a few years since consumers have had the ability to turn the smartphones in their pockets or even the watches on their wrist into mobile wallets capable of paying for stuff at retail (and online), most notably through the likes of Apple Pay, Samsung Pay and Android Pay.
The regular use of mobile payments remains flat at 19%, according to a recent consumer survey by Accenture.
Significant hurdles remain across the entire mobile payments industry. Only relatively new smartphones are compatible with the various mobile payments methods, and some consumers are still concerned about security, though most mobile payment approaches are in fact more secure than handing a credit card to a clerk. DREAMING OF DRONES Aside from Star Trek-style replicators — which even Amazon hasn’t worked out yet — the Holy Grail of all online delivery right now is drones.
Deutsche Bank estimates drones could deliver for half of what trains, planes or automobiles cost. But while Amazon has a full drone lab up and running outside of Cambridge, England, so far no one’s quite got the mechanics and the regulatory issues worked out.
Until then, the only one who can provide that kind of speedy, pin-point service is, you guessed it, Santa Claus.