The rise of the ‘hybrid’ supermarket
Grocery stores and food-to-go establishments are rapidly changing. Only five or ten years ago, it would be unheard of to outsource a stranger on a bike to go fetch your groceries, or a single coffee from Pret - now, it's commonplace.
While online grocery shopping has been around for several years, it’s developed from a weekly commitment (planning when you will be in, scheduling the time of your delivery for a few days time, for instance) to a quick convenience that you can have at your doorstep in hours, or even minutes, rather than days. The pandemic only catalysed these changes: demand for rapid grocery delivery services soared, often due to people who were isolating or shielding.
New research indicates that over 20 per cent of all in-store grocery activity in the near future will be fulfilling online activity, rather than traditional grocery runs. Supermarket staff picking online orders, drivers for delivery firms such as Deliveroo and UberEats collecting groceries for delivery, and customers collecting their online shopping, make up an increasing proportion of people in the supermarket. The dual rise of the gig economy and what the Wall Street Journal identifies as a ‘new market for ten minute groceries’ only suggests that supermarkets will continue to face exponentially greater demand from online orders.
Challenges for retailers
The new role of the supermarket as a ‘hybrid’ store, comprising significant transactions in both traditional in-store purchases and online fulfillments, have posed challenges to retailers.
One of the most significant challenges, simply, is handling and processing a greater volume of data. According to a report by the TLT, nearly half of grocers said that the volume of data is the biggest obstacle in gaining value from data.
Similarly, retailers face the challenge of integrating different IT systems. Gaining a single view of the customer will allow retailers to be more sensitive to changes in demand across their whole customer base, rather than viewing online and in-store customers as separate categories. Meanwhile, gaining a single view of stock is imperative for seamless distributional and restocking practices.
Ultimately, consumer demand in online transactions is sky-rocketing; supermarkets will require integrated and agile systems in place to keep up.