There are a few significant advances in technology that exponentially transformed how we live and work. The personal computer, the mobile phone, remote meeting platforms, the internet/ecommerce and now the metaverse, just to name a few. Much of the conversation around the metaverse , however, has been around gaming, brand engagement and the news headlines about Mark Zuckerberg. But recent innovations being pioneered by Meta and Google are making virtual reality closer to real. Couple this technology with commerce giants like Amazon and you have all the ingredients for a new retail recipe.
The Journey to Immersive Tech
Augmented reality was the first step into multidimensional retail when brands expanded into 2D. The home furnishings category led the way with ecommerce features to see how items looked in homes and applications that allowed consumers to decorate their spaces with paint colors and patterns at a touch of a screen. Apparel companies followed suit and quickly leveraged the technology to create virtual closets and try-on services hoping to expand the physical experiences of stores onto their ecommerce sites. Grocers, however, had yet to explore the possibilities of multidimensional retail, at least until now.
High Tech on Aisle Three
Contactless shopping and home delivery services were thrust upon the grocery industry in response to pandemic health and safety concerns. As consumers quickly adjusted to the new convenience of shopping for food at home and having an abundance of new delivery options like Grub Hub, Uber Eats, Instacart, Door Dash and more, grocers had to pivot to transition these “temporary” offerings to mainstream in their business models.
Amazon has been nipping away at the grocery industry segment for years, looking for more innovative ways to tap into the frequency and volume of the U.S. food market. The acquisition of Whole Foods was soon followed by Amazon Fresh, Just Walk Out technology and pricing optimization for home delivery services (although they just increased their threshold basket size for free delivery). These initial tests were designed to support their vision to build and own the omnichannel grocery segment. With that mission, how can regional and local grocery brands and supermarkets compete going forward?
Enter 3D Retail
Imagine sitting on your couch (potato is optional), engaging with 3D enablement technology and bringing a customized food shopping experience right into your home. You would have access to personalized merchandising displays, curated assortments, preferred meal ingredients from prior recipes, real time/in stock inventory choices, AI generated basket add on recommendations (need a shake with those fries?) and a clean, contactless interaction all with one-click checkout and preferred delivery or local pick-up zones from designated regional stores. Whoa!
Now imagine the benefits of this experience for grocers as well. No overhead, no labor, no restocking, better freshness control and minimized stock loss from theft and spoilage; digitized pricing optimized to comparative offerings, instant CPG and advertising digital media platform/coop revenue, virtual chef demonstrations, product placement tie-ins (think cookware and other merchandise recommendations), and an endless ability to differentiate your brand without physical expense and brick-and-mortar overhead. Another whoa!
And similar to other marketplace business models, grocers could align seamlessly with specialized food providers like farm to table, sushi/fish, regional delicacies, desserts, wine and flowers all of which could be purchased in the same virtual trip and shipped/delivered directly from the source (no middleman).
If all of this seems decades away, think again. The technology is here and the need for grocers to transform their business models is real. Walmart and Target have already eaten into market share; Amazon’s strategic initiative is food, so it is only a matter of time before they transform supermarkets into digital marketplaces. The couch potatoes are eagerly awaiting.
Note: Columbus Consulting is a Robin Report Collaborative Partner