What is the something that everybody needs to do? It’s getting groceries. In 2021 the way we purchase our groceries is changing in an extraordinary way.
Amazon has found a way to enhance customer experience whilst doing your weekly grocery shopping. It is Amazon Go’s “Just Walk Out Shopping”. It is a something that Amazon has been developing for several years, to create the technologies that are a combination of computer vision, sensor fusion and deep machine learning. It involves the use of sensors and automation to allow customer to shop and checkout without interacting with a human employee or even a kiosk. The sensors and software are trained to analyse and perceive what items get removed from the shelves and update the customers shopping cart in real time. When the first Go store opened in 2016, according to reports, Jeff Bezos (Amazon CEO) visualized Go stores to go beyond basic grocery stores, but also configurations of stores that sell freshly made packaged meals and 7-Eleven limited grocery stores. If this does indeed happen and Amazon expands to several different models, it could potentially be a threat to competition is both fast-food and fast casual dining establishments.
Whilst technology is advancing in grocery stores, there are now alternatives to going to the store in the first place. Gorillas is an on-demand grocery delivery company that promises to deliver your order within 10 minutes. The company was founded in 2020 and has already achieved unicorn status ($1 billion in valuation). Their rapid expansion has led to the company already operating in several countries such as Germany, Netherlands, Belgium, and the UK. To achieve this incredibly fast delivery time, Gorillas operates a vertical or so called ‘dark store’ model which involves micro fulfilment centres. The CEO Kağan Sümer believes the normal weekly grocery shop is something of the past, since people today live much more spontaneously and says we should change of shopping habits accordingly.
Will these technologically advanced methods of grocery shopping take over the conventional way we are used to doing our groceries?
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Innovation in the FMCG and specifically grocery industry is quite fascinating indeed. What I find most striking though, is the difference in technological advancement in your two examples. Looking at the Amazon case, one can see how it took lots of investment upfront and probably even more engineers to build and technology that can identify products, purchases, and people and use all these inputs to create a reliable purchase history for all parties involved. It just seems like a very complicated undertaking, with some type of AI at the core of the service.
Gorillas on the other hand has much more straightforward approach. While it is true that they are very innovative they do not really bring any new technologies to the industry. Perhaps their app counts because it let’s you choose and store grocery items you want to shop or have shopped. Beyond this, Gorillas true innovation lies more within their logistics and distribution strategy. In fact, Gorillas uses many relatively small storage locations to ensure short delivery times. Right, getting your groceries delivered to your doorstep in under 10 minutes is nothing short of a breakthrough. It is striking though, how this technology simply waited for the right moment to appear. After all it mostly relies on breakthroughs in other industries e.g. smart phone or app stores. Even their logistics strategy isn’t really all that innovative, considering that a large number of small and dispersed delivery centeres has been used as a strategy for dispatching online purchases for a while. It’s striking how two breakthroughs can be similar in their magnitude and yet so different in their initial investment (whether financial or no).
Perhaps there are more synergies like the one exploited by Gorillas that we will find out about in the future?
Thank you for your contribution! I have been especially interested in the role of AI in the grocery retail industry lately, so this was a fascinating article. There truly is so much potential advancement and innovation in the way that grocery shopping is done- these are only the first steps.
I have heard about robots being used in grocery stores to keep track of inventory and stock the shelves/aisles, or robots packing groceries to send out for deliver. Another recent advancement has been self-driving grocery delivery, which is mean to be very quick, much like the goal that Gorillas has. They even have tested out self-driving grocery stores! These are essentially mini-stores within a car that hold the daily essential products such as fruits, vegetables, bread, etc. This has already been tried in several states in the US, where people are able to call the grocery store to their house, and it literally drives to their front door. It is truly impressive. I am excited to see where the future takes us!
Very interesting article about the future of grocery retails. It is fascinating to see how grocery retail has changed in the past decade. A few years ago, we found it extraordinary to order our groceries online and deliver them to our doorsteps. E-grocery has become the new norm, and therefore it is interesting to see how this industry is already at the start of disruption. E-grocers, such as Gorillas, are starting to disrupt the e-grocery industry with an entirely new business model that allows on-demand delivery.
These new technologies and business models are already changing our conventional way of shopping and will undoubtedly continue to do so in the future. The distribution and logistics behind Gorillas are most definitely using innovative technologies. Because gorillas work with many small distribution centers, it is even more critical that the right products are in the right distribution center. The data and technology of Gorillas make it possible to make accurate predictions about which products are requested where and when. Therefore, demand forecasting is necessary for Gorillas.
It is also fascinating to see how, for example, how distributed ledger technologies have made their entrance in grocery retail. It allows for a more transparent and secure supply chain. These technologies enable the detection of food fraud within seconds, making it able to remove unsafe food for consumers to eat from the shelves quickly.
Thank you for sharing your insights.