A new picture of the American food consumer5 minutes
The pace of digital disruption has been gradual in industries like books and banking, where early adopters have had to slowly convince the majority to jump on the band wagon. Not so in food retail, where change is coming, and fast. The e-grocery revolution is already taking off, and is predicted to hit its stride as swiftly as consumers can fill up their online carts.
Just two years ago, the digital supermarket was a niche channel, but the Food Marketing Institute estimates that by 2024, 70% of U.S. consumers will be grocery shopping online. And Peapod reports that 10% of all shopping is expected to move to click and collect or delivery in the next five years. Adoption will be driven in no small part by the major players – Amazon is making its mark on Whole Foods, and big retail chains like Walmart, Target and Kroger are all investing in omnichannel and testing disruptive tech like blockchain, indoor farming and refrigerated pickup lockers.
A recent study on disruptive technology by Panasonic found that industry leaders in food service, hospitality and retail increasingly rely on disruptive technologies to accelerate their businesses. They’re investing to improve things like personalization and communication, and see a time when artificial intelligence will play a critical role in their business. The 10 leading disruptive technologies being adopted by these industries and others are expected to generate trillions in economic value in the decade ahead. Panasonic is deeply engaged in these technologies. We believe that connecting them into integrated solutions is essential to creating entirely new experiences.
Here’s a snapshot of how technology will impact Americans who are hungry for convenient nourishment.
Consumers who connect to their food
In the new world of food retail, transparency and sustainability will be key, and locally grown will continue to be a selling point. As shoppers realize they can find out almost anything about a product at the tap of a smartphone button, they now want that same information about their food. Where did it come from? And how long ago? Were the animals treated fairly and what does the farm look like?
Food suppliers are testing blockchain and IoT sensor technology that can tell shoppers all that and more just by scanning the label, and grocers are excited about the potential of such solutions to drive customer engagement. Industry experts point to other benefits: safer food and less waste. Remember that romaine outbreak? Supply chain transparency will let farmers and distributors quickly find the source of contamination, and the consumer won’t have to drive three states over to locate the last head of lettuce.
Demanding farm fresh food, fast
The changing landscape of food retail will also bring new grocery options and experiences. Better, fast meals are now possible thanks to the rise of meal kit delivery companies, and grocers are getting into the game, offering a more attractive on-demand model vs. those subscription-based services. With capability to provide a mix of private label and name brand products, accommodate consumers’ last-minute schedule changes, and overcome the hurdle of produce perishing on doorsteps by utilizing click and collect, food retailers have the infrastructure to grow this market.
Thanks to innovative technologies, indoor farming is also gaining traction, with 45% of retailers exploring this solution to meet the demand for locally grown food. Savvy grocers are taking the indoor farming concept out of the warehouse and into the produce aisle, growing herbs and other crops right on their sales floor. Smart, attractive living merchandiser cases give shoppers a level of freshness that importing can’t, and also provide a competitive advantage in the fight for foot traffic. This unique “produce theater” lets customers watch their dinner fixings grow right before their very eyes.
Another theatrical, value-added concept being adopted by retailers is the produce butcher. Cooking soup tonight? Step up to this special counter with the ingredients you’ve picked and have the produce butcher peel, slice, dice and do the julienning for you – enabling fresher, healthier dinners while chopping prep time in half.
Looking for different options for living foods & dry goods
Industry insiders don’t foresee online grocery services replacing brick and mortar completely, but they do anticipate store locations becoming fewer and smaller, with more specialized offerings that cater to consumers’ convenience-driven lifestyles. Shoppers want to shop the way they want to shop, when they want to shop, and grocers are gearing up to let them. Stock-up trips will continue to decline as consumers shift to buying soap and other dry goods online, but living foods will be a mix of grab and go, delivery or click-and-pickup – all available from the same retailer.
Hussmann, a Panasonic company and world leader in refrigeration and display systems, is bringing the power of IoT to the food industry with food retail innovations like its cold pickup lockers. Retailers can place these refrigerated click and collect systems out by their curb or on strategic sites right in your neighborhood, overcoming the financial loss and logistics hurdles faced in the last mile before products make it from warehouse to home.
For shoppers. this means no more waiting around for grocery deliveries, and no more need to plan ahead. As one major retailer notes, a decade ago, people thought two-day shipping was fast: Soon, the next generation of food consumer will be able to order their groceries at three p.m. and pick them up by five, just in time to get dinner on the table.