Amazon's purchase of Whole Foods means big changes coming for grocery stores. While investors will also be shifting their strategy and working with existing tenants to stay competitive, grocers will also be looking at design and technology to stay competitive with Amazon. Branko Prebanda, a senior principal at the Retail Design Collaborative, says that grocers will begin integrating technology and will alter the design to become more experiential, with ready serve food and dining areas. To find out more about how grocery design is going to change and the move to make grocery—which will likely always have some in-store experience—as close to ecommerce as possible, we sat down with Prebanda for an exclusive interview.

GlobSt.com: Why do you think that grocery will never move completely to ecommerce?

Prebanda: In the newly evolved economy where commodity based goods are so accessible through ecommerce, there are several reasons why in-store shopping will never completely move to ecommerce. One is the in-store experience, and another is an innate desire to connect with the products being purchased.

Many grocers, in all formats, are evolving their stores to be part market/part ready-serve restaurant. The reason being is customers desire a more unique experience out of their weekly, and often daily, trips to the grocer. Going to the grocer is no longer solely about stocking up for the week or weeks ahead, it's also about trying an artisanal tonic, or an exotic cheese. That involvement is something that drives customers to find unique and stronger loyalty to the in-store experience.

Since the beginning of trading, the connection between purveyor and consumer has always been strong. Customers still enjoy smelling fresh fruits, looking at the meat and produce selections and physically touching those products before making a purchase. Perishable food items are items that people appreciate purchasing in a brick-and-mortar grocery, as opposed to online. No doubt ecommerce has affected the grocery experience. That said, there will always be a desire for connectivity to perishable goods in grocery stores.

GlobeSt.com: How will Amazon's purchase of Whole Foods—essentially creating a hybrid between the platforms—change the grocery store experience?

Prebanda: The anticipated changes, from a broader standpoint, will be one of many overall efficiencies and data-driven differentiation. We see several possibilities of how they could make dramatic changes. Those possibilities include the customer point-of-sale (POS) experience in-store, as well as utilizing their robust data analysis to better serve their customers.

The customer POS experience could change dramatically, offering the customer a faster, more efficient and reliable check-out process. In its beta version in Seattle, Amazon Go has explored this new customer experience. They have provided a platform for the POS to be moved from a permanent, aisle driven experience, to a checkout process based on mobile technology in the customer's pocket. By using a mobile device in combination with RFID technologies embedded on the products, one can walk out of the store and be charged immediately and directly. Buying a gallon of milk can be as easy as walking in, selecting the milk and walking out.

Amazon is a data company. While the acquisition of Whole Foods continues to be finalized, no one is really sure how they will enhance the grocery experience. With Amazon, one thing is for sure – a heightened use of technology will be utilized. We can imagine a stronger understanding of customer trends, habits and needs through their robust data analysis.

GlobeSt.com: How is in-store technology changing to address the needs of customers?

Prebanda: In addition to efficiencies in the customer POS checkout experience, we also see an opportunity for consumers to have access to more information, on the fly, within their grocer experience. There are already technologies readily available on mobile devices, when used in combination with cameras and product SKU's, to gather health, product comparatives, pricing and availability information. We are seeing some stores begin to offer more connectivity and engage their customers in more data-driven decision making.

Technology is changing everything about how we live, work, play and shop. The grocer industry is adapting to these technologies and providing customers with tremendous potential for a more efficient experience. At the end of the day, humans are social animals. Even with technological advancements, there will always be a need for social engagement, and the grocery store has and will always be one of those places.

GlobeSt.com: How will other grocers need to respond to the Amazon/Whole Foods deal to remain competitive?

Prebanda: They will have to adapt and evolve from a technology standpoint, but more importantly, a focus on a heightened customer experience. In larger formats, we have seen greater organic offerings, cheese markets and fresh rolled sushi. While these programs have added to customer experience, we see a large change in some of the smaller specialty markets. In these formats, experience plays an even more important role. We are seeing a much deeper focus on curated, artisanal food offerings, as well as in-store dining. From organic juice cleanses to fresh-made organic pizzas – customers who choose to shop in-store want a more unique experience.

GlobeSt.com: How will the physical design of grocery stores change with the inclusion of ecommerce platforms?

Prebanda: Like we've discussed, we believe that there can be a balance between commodity-based ecommerce and in-store customer experiences. Stores will strive to keep customers coming back and staying involved with their brands. Through providing a more unique offering, and a more efficient customer experience overall, stores will keep customers coming back. We do anticipate the overall format of stores to become more condensed, as a result of commodity purchases online. That will leave stores to focus the majority of their design intentionality on non-commodity based goods like meats, fish, fruit and vegetables, as well as ready-food offerings.

Additionally, designing for these more unique offerings can include a variety of indoor and outdoor specialty spaces, such as plazas, parklets and outdoor patios. In sum, we see the physical design of stores focusing more intentionality on customer efficiency and experience.

GlobSt.com: Why do you think that grocery will never move completely to ecommerce?

GlobeSt.com: How will Amazon's purchase of Whole Foods—essentially creating a hybrid between the platforms—change the grocery store experience?

GlobeSt.com: How is in-store technology changing to address the needs of customers?

GlobeSt.com: How will other grocers need to respond to the Amazon/Whole Foods deal to remain competitive?

GlobeSt.com: How will the physical design of grocery stores change with the inclusion of ecommerce platforms?

Instant Insights /

Getting Grocery As Close to Ecommerce As Possible

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