Grocerants in the New Amazon Era

In mid-June, news of Amazon’s bid to buy Whole Foods gripped the grocery industry. No one doubts that Amazon’s move will be a win for consumers, but some see this merger as the push the rest of the industry will need to modernize more quickly and use data-collecting strengths to be more customer-centric than the bigger players.

“Grocers that are customer-centric are going to win,” Shannon Warner, vice president of Capgemini Consulting’s consumer products and retail practice in North America, told Bloomberg. That means “leveraging all of the data they have about the customer to personalize experiences and make them more relevant,” she says. Knowing who follows a vegan diet, who is gluten-free and who appreciates Taco Tuesday at the in-store restaurant will help give smaller players some edge.

Grocers who keep pace with the Amazon deal will blend state-of-the-art backroom operations with a “showroom grocery experience,” according to Bloomberg News. Shoppers will still go into stores for the perimeter goods and prepared foods they want “to see, smell and touch before buying.”

Food analyst David Portalatin of The NPD Group, a market research company, notes that prepared foods will stay in demand, with prepared, ready-to-eat items purchased outside the home accounting for 1 in 10 entrees served in Americans’ homes. As grocerants continue to draw in people, smartphone payments need to come up to speed to allow for speedy, cashier-free checkout and curbside service.

According to Bloomberg News, the future supermarket will include apps that send “you promotions on your most-purchased items every Wednesday (since it knows you shop on Wednesday nights), and offers recipe suggestions based on what you’ve bought in the past. You also get meal delivery offers when it’s rainy (since the store remembers you seldom venture out when the weather is bad), and a reminder when your laundry detergent is probably running low.”

Grocerant-Ready Ideas:

• Improved sensory experiences for cheese, produce and other fresh foods
• Freshened grocerant menus with daily specials and come-back deals
• Mobile app pre-orders and curbside takeout