The future of the supermarket: A daycare for the elderly?

I recently led a discussion about the future of food and food distribution with a group of 20-year-olds from all over the world. I was taken aback by their views and opinions, which collectively were dismissive of the role of supermarkets as a way to get food.  To them, supermarkets are a form of “daycare for the elderly.” They told me supermarkets are more important to older people, who they defined as being in their fifties and older. This younger generation believed older people visit supermarkets for socialization and interaction. They believe they spend their shopping time chatting to staff about the food and at the register for social purposes more than real information exchange.

 Should this be of concern to those who are in the supermarket business today? Is the long-term future of the supermarket open to question? How does this next generation expect consumers in the future to get food? 

My young audience told me that instead of shopping in grocery stores, they purchase food online and imagine a future where this will be their only way to get food. The emergence of online retailers, such as Ocado in the U.K., offers the opportunity to order home-delivered food online via telephone or computer and have it arrive in a very precise window of time. Young people will become used to purchasing food in this way. Why would they ever go back to bricks and mortar?

These 20-year-olds are not alone in imagining a different future for the supermarket. The 2015 World’s Fair in Milan presented a vision of “the supermarket of the future” as one with interactive screens that allow shoppers to choose from many options quickly.  Another version is a “drive-through market,” where everything is set up so that purchases from the car can be loaded almost instantaneously. Already, Tesco in Korea has perfected the “vending machine supermarket.”  Kroger has been testing new technology and services, such as QueVision and Express Lane, in order to keep up with customer expectations regarding the grocery shopping experience. A myriad of others, from Whole Foods to Microsoft, are getting in on the act.

All of these fail in one key criterion. They imagine shoppers will continue to go to where the food is sold rather than have the food come to them. Over the last 50 years, this was the fundamental precept on which the supermarket business was founded, that supermarkets need to be as close as possible to the consumer while maintaining economies of scale. Food distribution supply chains were cost-saving and had convenience in mind.   

The next generation imagines a future in which everyone will have a personal shopping drone. Programmed through a smart device and capable of understanding what its programmer/consumer looks for when choosing fresh food, it will have the advantage of convenience. Size and mobility will allow goods to be delivered almost immediately. This may be combined with some form of SmartWare technology, which measures individual calorie and nutrient requirements, predicting and delivering precise nutrition in a timely manner. Taken a step further, shoppers could virtually visit supermarkets via headset, shopping in the comfort of their own home while still feeling as though they were making the decisions themselves, and even ask friends to virtually shop with them! This shopping can occur without humans being on-site. 

So what should “supermarketeers” take home from these 20-year-olds? Will supermarkets no longer be needed to sell food? Industry publications indicate that this is not a vision supermarkets share, moving control of how food is purchased from the entity that controls the bricks and mortar into one which controls the virtual or internet space.  

Some fundamental questions arise. Does this help new entrants or incumbents? Does it facilitate or stifle competition and innovation? What are the new rules of competition? In this new world, the launch of new products, spontaneous purchases by consumers and the availability of free samples will be determined by a virtual presence, more to do with programmers and coders than with the physical location of a building or supermarket. 

Do you see challenges with the new paradigm? How do we secure delivery to the home? No problem, deliver the goods by drone with secured access to an outside door, refrigerator or cupboard. What can be done to ensure that these small drones don’t fall and kill people? Dedicate drone lanes, channels or space. Maybe these will be the very roads used today by cars to transport people. They can be transitioned to drone activity, especially since relatively affordable drones are capable of carrying up to half a ton and may soon be carrying people. 

A big win for young people is that purchasing food no longer has to occur through existing food retailers, and the control of food can move into the hands of growers or farmers. People can be even more connected to their food and potentially interact directly with farmers who produce and can grow to order. What are the implications or regulatory concerns for producers and manufacturers of food ?

The collateral damage of these changes would be the demise of the existing food distribution chains, but in the mind of a 20-year-old this is an acceptable consequence.  In their world, traditional distribution networks, food markets and convenience stores will end. 

Whatever the conclusions, the belief that supermarkets are going virtual should strike fear into anyone who is invested in the status quo. My 20-something-year-old audience is convinced. The demise of the supermarket as we know it is nigh.

This is exactly the type of discussion that will occur at ONE: The Alltech Ideas Conference in Lexington, Kentucky, this May. More at https://www.alltech.com/