Food Retail Execs See Amazon as Biggest Disruptor: Survey
A survey of more than 200 food retail executives has found that seven in 10 believe that if grocery stores don’t modernize, more consumers will find other ways to purchase food – most likely from the likes of Amazon, which they view as the biggest threat to traditional grocers.
The survey, from solid-state cooling provider Phononic, featured executives who work in the grocery and food retail space, among traditional grocers, convenience stores and big-box retailers that sell groceries. The aim of the survey was to uncover insights into shifting shopping habits, growing competition, the deployment of technology, and predictions on how these factors will affect food retail over the next five years.
“Food retail has become one of the most competitive markets, attracting numerous disruptors,” said Tony Atti, CEO and founder of Durham, N.C.-based Phononic. “However, margins on staple items are already razor-thin. Rather than cutting prices, grocers need to deploy new tactics that focus on leveraging technology to improve convenience and increase basket sizes.”
Phonomic pointed out that the food retail executives responses largely aligned in several key respects with those of consumers who took part in the company’s recent “Store of the Future” survey. According to the company, the executives’ survey responses showed how they’re looking to technology to meet consumer needs at a time of mounting competition.
Among the results:
- Asked to identify the biggest grocery disruptors, more than half of respondents (54 percent) fingered Amazon, two in five (41 percent) named Walmart, and one-quarter (25 percent) said online food delivery services, while smaller numbers chose Kroger (10 percent) and Target (8 percent).
- Three in five respondents (60 percent) said that their company invests sufficiently in in-store technology, and seven in ten (70 percent) said that their company is proactive in the implementation of new technologies to improve customer experiences. Despite that response, however almost half of food retail executives (49 percent) said that grocery stores haven’t yet figured out how to use technology like other retailers have.
- 87 percent of respondents said that creating an optimized store layout has been successful, with more than seven in 10 (72 percent) noting that the grocery store layout is changing to facilitate micro-visits.
- More than half of respondents said that providing more prepared grab-and-go meals at checkout would perform best.
- Looking ahead five years, almost nine in 10 respondents (85 percent) said that it was more likely that a greater number of physical stores would offer ways to auto-replenish basics; four in five (81 percent) said it was likely that pop-up supermarkets in urban and rural areas would simplify shopping; and nearly two-thirds said it was likely that supermarkets would come to resemble community gathering places with bars and restaurants (65 percent), and that the majority of supermarkets would be checkout-free (64 percent).