How the Pandemic Could Fundamentally Alter Grocery Store Layouts
Retail Dive | June 9, 2020
Expanding e-commerce and turning stores into meal destinations were high on grocery executives' to-do lists before the COVID-19 pandemic. Now, online grocery adoption is accelerating ahead of schedule and expected to become a regular habit for a significant number of shoppers.
Tom Custer, vice president with FRCH Nelson, sees more grocers adopting a hybrid store model that combines an elevated in-person experience with enhanced online fulfillment capabilities. Grocers will have to expand their backrooms and add automation to address high volumes.
Providing more space close to where customers live and work is becoming essential to pick and assemble same-day orders. Whole Foods is turning its in-store cafes into e-commerce staging areas in cities like Philadelphia and Atlanta. Walmart has dabbled in automated grocery kiosks and has added bright orange pickup destinations to hundreds of its stores. Hy-Vee has built pickup lockers on its store grounds as well as at nearby destinations like local hospitals.
Expanding backrooms means shrinking selling floors, of course. Limiting products on the floor to targeted assortments will push to sell top performers in stores and then offer a wider assortment online.
The idea of elevating the store experience and moving non-perishable products online isn't new, but how and when retailers might make this shift has been open to debate. In China, Hema Market lets shoppers browse elaborate fresh food displays and order products for same-day home delivery using the store app. Firms like Locai Solutions and Alert Innovation have proposed automated store concepts where robots pick and pack non-perishable goods while consumers shop for fresh products and dine at store eateries.
Safety restrictions and new consumer attitudes have altered the store experience and promise to impact store designs going forward. Retailers will likely shift toward more packaged food displays and offer more made-to-order options.