Tech Within Grocery is Satisfying Our Appetite for Convenience

Technology is making grocery shopping deliciously convenient. Time-starved consumers welcome innovations that offer efficiency and ease, elevating a weekly habit into a pleasant experience. Notably, grocery is a strategically significant category for retailers who compete for big weekly baskets. Adopting grocery tech can give retailers a competitive edge by satisfying consumers’ needs and earning their loyalty. Let’s look at 2021’s top grocery tech trends and how they’re reinventing global grocery.

E-grocery

Online grocery shopping gives consumers omnichannel options to boost customer satisfaction. Experts predict U.S. e-grocery sales will nearly double by 2024 ($187.7 billion vs. $95.8 billion in 2020). ¹US Grocery Ecommerce Sales, 2019-2024. Insider Intelligence eMarketer. February 1, 2021. More than half (52%) of Americans say they’ll purchase groceries online post-pandemic, including 71% of Millennials. ² Maake, Katishi. Exclusive: More Than Half of US Adults Say They’ll Buy Some Groceries Online Post-Pandemic. Retail Brew. March 29, 2021.

“[O]nline grocery shows no sign of slowing down,

even as consumers return to physical stores …”³ Petrak, Lynn. Delivery and Are Sticking to Online Grocery Buying: Report. Progressive Grocer. May 27, 2021.

Last year, the U.K.’s online value share of fast-moving consumer goods rose 11%. ⁴Winning Omnichannel: The future of FMCG and Retail post-COVID. Kantar. 2021. Across the pond, Amazon is set to overtake Tesco as the U.K.’s largest retailer by 2025, due in part to significant e-grocery growth. ⁵ Skeldon, Paul. Amazon set to become UK’s largest GMV retailer by 2025 as online grocery grows. Internet Retailing. June 2, 2021. In addition, this year consumers are most likely to buy groceries online in Spain and France. ⁶ Gerckens, Claus, Franck Laizet, Daniel Laubli, Eugen Zgraggen and Jean-Albert Nyssens. The path forward for European grocery retailers. McKinsey & Company. March 25, 2021.

BOPIS

Buy online pick up in-store (BOPIS) keeps growing in popularity. In 2019, only 39% of U.S. consumers used BOPIS to buy groceries and that figure is set to surge to 60% next year. ⁷ Cramer-Flood, Ethan. US Click and Collect in 2020 and 2021. Insider Intelligence eMarketer. March 24, 2021. Walmart’s cross-category BOPIS sales rose 109% year-over-year in 2020 to $15 billion while Target BOPIS sales rose 192% year-over-year to $6 billion. ⁸ Cramer-Flood, Ethan. 7 companies driving the US click-and-collect boom. Insider Intelligence eMarketer. April 7, 2021. In the U.K., 58% of consumers are expected to use BOPIS this year. ⁹ Click and collect, an already popular option, finds a new gear. Insider Intelligence eMarketer. March 29, 2021 Also, BOPIS growth rates will remain high in 2021 in Italy (7.4%), Spain (7.3%), and Canada (7.2%). ¹⁰ Click and collect, an already popular option, finds a new gear. Insider Intelligence eMarketer. March 29, 2021.

Delivery

Home delivery gives consumers a chance to skip the store entirely. The top feature that is “very important” to most U.S. consumers is fast, free delivery for online orders. ¹¹ Petrak, Lynn. Delivery and Are Sticking to Online Grocery Buying: Report. Progressive Grocer. May 27, 2021.

• Walmart partnered with grocery delivery platform Instacart to offer same-day delivery. ¹² Browne, Michael. Walmart teaming with Instacart on same-day delivery pilot. Supermarket News. August 11, 2020. In addition, Walmart’s in-home delivery service puts groceries inside consumers’ fridges, which involves installing a smart device in their front doors. ¹³ LaFave Grace, Christine. How Walmart Wants to ‘Win the Kitchen.’ Winsight Grocery Business. June 10, 2021.
  
• Amazon expanded its in-garage grocery delivery service, which requires a smart garage door opener. ¹⁴ Palmer, Annie. Amazon is expanding its service that lets delivery people drop off groceries in your garage. CNBC. April 27, 2021.
  
• Instacart launched an express service to deliver groceries within as little as 30 minutes. ¹⁵ Wells, Jeff. Instacart launches 30-minute delivery service for grocers. Grocery Dive. May 27, 2021.
  
• Uber acquired Chile-based grocery delivery company Cornershop. ¹⁶ Wells, Jeff. Uber buys remainder of grocery delivery firm Cornershop. Grocery Dive. June 21, 2021. Uber’s grocery delivery expansion spans North America (Miami, Dallas, Toronto, and Montreal) and South America (including Santiago, Lima, and Rio de Janeiro). ¹⁷ Kaiser, Tom. Uber Bets Big on Online Grocery Delivery via Cornershop. Food on Demand. July 8, 2020.
  
• Ocado partnered with Kroger in the U.S., Marks & Spencer in the U.K., and Casino in France. ¹⁸ Grocery shopping has changed for good, says Ocado. BBC News. February 9, 2021.
  
• Gorillas, a German startup that provides grocery delivery in 10 minutes or less, launched in New York City in May. ¹⁹ Wells, Jeff. 10-minute grocery delivery is coming to the US. Grocery Dive. May 24, 2021.

Autonomous vehicles

Grocery shoppers may soon receive their orders from driverless last-mile delivery vehicles.

• Albertsons Companies, which owns Safeway, is running a grocery delivery pilot using remote-controlled robot carts equipped with sensors to deliver goods to customers. ²⁰ Korosec, Kirsten. Albertsons taps Tortoise for remote-controlled grocery delivery robots. TechCrunch. March 5, 2021
  
• Amazon acquired self-driving startup Zoox last year and invested in self-driving vehicle startup Aurora Innovations. ²¹ Silver, David. In Self-Driving, Amazon Invests While Walmart Partners. Forbes. December 16, 2020.
  
• Walmart partnered with self-driving car companies Cruise, Nuro, Udelv, Ford, and Waymo. ²² Hawkins, Andrew J. Cruise is teaming up with Walmart for robo-delivery in Arizona. The Verge. Nov 10, 2020.
  
• Ocado recently invested £10 million ($13.8 million U.S.) in U.K. autonomous vehicle developer Oxbotica.

Recently the U.K. government announced plans to regulate the use of self-driving vehicles on highways. The U.K. aspires to be a global leader in the rollout of autonomous vehicles, as 40% of new U.K. cars could have self-driving capabilities by 2035. ²³ Carey, Nick. UK government green lights ‘self-driving’ cars on motorways. Reuters. April 27, 2021.

Drones

Earlier this year, new U.S. drone regulations came into effect, signaling a step toward efficient aerial drone delivery for retail. ²⁴ Duffy, Ryan. How Remote ID, the rule that will enable US drone delivery, came together. Emerging Tech Brew. July 2, 2021.

• Amazon has a fleet of Prime Air drones designed to deliver parcels to consumers’ homes in 30 minutes or less. ²⁵ Edelson, Sharon. Walmart Invests In DroneUp, A Last Mile Delivery Solution. Forbes. June 17, 2021.
  
• Walmart invested in service provider DroneUp. In partnership with Flytrex, Walmart expanded home deliveries in North Carolina using drones to transport grocery products. ²⁶ Edelson, Sharon. Walmart Invests In DroneUp, A Last Mile Delivery Solution. Forbes. June 17, 2021. ^{, 27} Leonard, Matt. Flytrex expands drone deliveries for Walmart, local retailers in North Carolina. Supply Chain Dive. May 26, 2021. 
  
• Tesco partnered with Irish drone startup Manna to test food delivery in Ireland. A Manna operator can manage multiple drones at once and complete 20 deliveries an hour. ²⁸ Keane, Jonathan. Drone delivery player Manna raises $25m as it eyes expansion. Silicon Republic. April 29, 2021.

Robotic operations

Automating micro-fulfillment centers with robots boosts the productivity of picking and packing e-grocery orders. ²⁹ Study: Market for Micro-Fulfillment Centers to Reach $10B by 2026. Supply & Demand Chain Executive. December 15, 2020.

• Kroger is building e-commerce fulfillment centers with Ocado’s warehouse technology, which uses artificial intelligence (AI). More than 1,000 robots move around 3-D grids to fulfill thousands of orders per day from a single warehouse. ³⁰ Crets, Stephanie. Kroger opens its first robotic ecommerce fulfillment center. Digital Commerce 360. May 21, 2021.
  
• Instacart plans to build automated fulfillment centers and use robots to collect packaged goods while workers would gather produce and deli products. ³¹ Soper, Spencer, Jackie Davalos and Matthew Boyle. Instacart Bets on Robots to Shrink Ranks of 500,000 Gig Shoppers. Bloomberg. June 1, 2021.
  
• Amazon developed robots that move items across its fulfillment centers, including Ernie, which removes items from a robotic shelf to protect worker safety and autonomous mobile robot Bert, which can navigate warehouse facilities on its own. ³² Feiner, Lauren. Amazon details new warehouse robots, ‘Ernie’ and ‘Bert.’ CNBC. June 13, 2021.

• Walmart will add micro-fulfillment centers to more of its stores to manage growing e-commerce order volume using robotics and AI. ³³ Redman, Russell. Walmart to build local fulfillment centers at dozens of stores. Supermarket News. January 27, 2021.

Hands-free checkout

Store hygiene became a top priority during the pandemic, sparking demand for a touchless shopping experience.

• Amazon expanded the rollout of its Just Walk Out cashierless technology to Amazon Fresh stores. The technology eliminates checkout lines and uses cameras and sensors to keep track of the products shoppers add to their carts. ³⁴ Soper, Taylor. Amazon brings cashierless tech to full-size grocery store for first time at new Seattle-area location. GeekWire. June 15, 2021. Also at Amazon Fresh, the Amazon Dash Cart uses sensors to identify products placed in it. ³⁵ Berthiaume, Dan. Amazon opens fourth high-tech grocery store in Illinois. Chain Store Age. March 11, 2021.

• Whole Foods is implementing Amazon One tech to let shoppers scan their palm, QR code in the Amazon app or use a credit or debit card upon entry for fast, contactless checkout. ³⁶ Garcia, Tonya. Amazon will open the doors to a grab-and-go, checkout-less grocery store on Thursday. MarketWatch. June 17, 2021. , ³⁷ Redman, Russell. Whole Foods Market adopts Amazon One palm-scanning payment service. Supermarket News. Apr 21, 2021.
  
• Asda encourages U.K. grocery shoppers to use contactless cards and other cashless payment methods. Its Scan and Go mobile app lets consumers use their smartphone to scan their products and pack as they shop. ³⁸ King, Mel. Tesco, Sainsbury’s Aldi, Lidl, and Asda’s latest lockdown rules on paying with cash. Essex Live. January 20, 2021.

Voice technology

Voice innovations like Amazon’s Alexa and Google’s Assistant use AI to maximize the convenience of online shopping.  

Amazon Fresh shoppers can access their Alexa shopping list through Amazon’s app or on the Amazon Dash Cart to navigate the store with greater ease. Throughout the store, Amazon Echo Show devices allow customers to ask Alexa for help in finding grocery products. ³⁹ Berthiaume, Dan. Amazon opens fourth high-tech grocery store in Illinois. Chain Store Age. March 11, 2021.

Voice technology is expected to grow as households get busier. In the U.K., 50% of parents use voice technology to make purchases and 53% of young parents use it to buy food. ⁴⁰ Crowe, Emily. Grocery tech trends: The unstoppable rise of AI, voice, automation. SmartBrief. February 1, 2021.

Grocery tech is in demand worldwide

The sumptuous blend of grocery and technology is making shopping easier and faster for consumers around the world. Retailers are implementing grocery tech to boost productivity, cost-effectiveness, and profitability in a sector known for slim margins. In the coming years, expect grocery tech to nourish the bottom line of progressive food retailers.