Even if you’re a hidebound traditionalist who buys all of your food from ruddy-faced farmers at a local market, you’ve probably heard of dramatic changes in the way people are starting to buy their food. From voice shopping to self-checkout to Amazon Fresh and one-hour deliveries, a quiet revolution has been afoot in the FMCG industry, and it’s wise to believe that new technologies are about to shake things up even further.
Here are 5 big changes we expect to see in the next 5 years.
1) Voice is coming
We’ve said it before, and we’ll say it again: voice technology is developing very quickly, and we firmly believe that customers won’t be able to resist the unprecedented convenience of buying a week’s worth of groceries simply by uttering a few sentences and having a box full of sustenance appear on their doorstep in an hour or two. If Google and Amazon are both committing to a technology, it’s hard to imagine that it won’t be omnipresent within a few years.
What does this mean for consumers? It means that you will probably start buying your necessities from your couch, with either a digital assistant or a phone. A recent Business Insider survey found that 51% of people aged 14-17 are already searching the internet with voice-enabled digital assistants and that 33% of the youths who aren’t doing so already are interested in beginning to use the technology.
What does this mean for brands? It means that brand loyalty will become even more important. A shopper in a supermarket might inspect a product that catches their eye, try a free sample, or buy something because it’s on sale. A consumer ordering things while lying on their couch is far more likely to buy the products they’re used to. Making your product a customer’s default choice will be incredibly valuable. Make sure you’re ahead of the curve in letting people buy what you’re selling with maximum ease!
2) Look out for Alibaba
While online shopping is 6-7% of the UK grocery market and about 5% in the Americas and France, Asian consumers are far more likely buy their groceries online, with 37% of shoppersreporting that they’ve tried buying groceries online, compared to 13% in Europe. One reason is Alibaba’s “New Retail” strategy, which attempts to seamlessly combine eCommerce with brick and mortar. “That means that the whole inventory and supply chain is one solution for whatever your needs are,” Jet Jing, the president of Tmall, Alibaba’s brand-focused e-commerce platform, recently told Business Insider. He added that no matter whether purchases are generated online or offline, “it will be fulfilled in whatever is the most efficient route to you.”
As Business Insider notes “Nowhere is the New Retail idea more on display than in Hema Xiansheng, Alibaba’s futuristic supermarket. Launched in 2015, Hema has expanded to 46 stores in 13 cities in China, with plans to open up to 2,000 more branches in the next five years. The fresh-food-focused supermarket offers customers the ability to shop in-store or on its app, see the origins of its products, have food delivered for free or prepared for pickup within 30 minutes, and pay with facial-recognition technology.”
Hema has been extremely popular with the Chinese public, and many industry watchers believe that Amazon and Whole Foods will try to emulate their business model. To shop at Hema, customers need to download the store’s app, “which logs all of your purchases, saves your preferences and delivery address, and allows you to pay with Alipay, Alibaba’s mobile-payments provider. After shopping at Hema, you’ll have a personalized product page.”
Alibaba’s New Retail could be the future of grocery shopping.
3) The end of the line?
If you ask anyone what they hate most about grocery shopping, the answer will probably involve being wedged in a line full of crying babies, shouting kids, and old ladies digging through their coin-purses for pennies. Self-checkout has been popular with retailers, but consumers have a laundry list of complaints about the machines, line-ups, and waiting 20 minutes for age verification when you really, REALLY want to be on your sofa with that bottle of white wine.
But forward-thinking retailers are working towards a future that is line free. Alibaba’s aforementioned use of facial recognition technology and app-based payment has rendered these lines a thing of the past. Amazon Go has unveiled its checkout free model which relies on cameras and sensors to determine what you’ve purchased, and lets you walk out of the store after debiting your app based account. And voice or eCommerce based shopping will allow consumers to avoid the supermarket altogether. The end of the line is right around the corner.
4) Everything is Shoppable, and Everywhere is a Shop
Department stores, malls, and supermarkets, like bazaars and public markets before them, have endeared themselves to consumers by allowing them to buy everything they need in one place. But with the rise of digital assistants and smartphones, consumers are now able to buy anything they could possibly desire from wherever they happen to be. As the futurist Tom Goodwin writes:
innovation also lends itself to a further squeezing of the purchase funnel and a world where everything becomes a shoppable layer. In a way, the idea of the old bazaar has gone full circle: rather than visit somewhere where you can be surrounded by every merchant, you are now constantly visited (through your phone’s location awareness and notifications – and, increasingly, domestic internet of things devices) by every merchant surrounding you.
This is the principle behind beacons, but this layer will soon become constant and prevalent. While washing machines that order their own powder are a well-known near-future concept, retailers advertising products to you based on your home temperature pattern or energy usage will also come into play.
5) Don’t Forget the Robots!
Young us would be very disappointed if we found out that we’d written a list of future predictions that didn’t include robots, so here we go. An Economic Times article from 2017 notes that Nestle has begun using robots to sell its Dolce Gusto coffee machines in Japan, Pizza Hut in China has opened PH+, a concept restaurant that has two robot waiters, and Walmart has been experimenting with drones that fly around its warehouses monitoring inventory levels. While we don’t know exactly how robots will impact the future of the FMCG industry, we boldly predict that they will revolutionize something!
There you have it. The future of FMCG is likely to move away from the business model of traditional supermarkets, as companies move towards voice-based eCommerce and shoppability. Brick and mortar grocers are unlikely to disappear, but in order to thrive, they’ll need to leverage technology and integrate with eCommerce to provide consumers with a more convenient and rewarding shopping experience. We at Adimo are confident that the future of this industry rests on giving consumers the easiest way to buy what they need. And also robots.