Retail grocery listings are still reeling from Amazon’s (NASDAQ: AMZN) plans to take over Whole Foods (NASDAQ: WFM), but let’s face it, with grocers already running paper-thin profit margins, it is the recently announced U.S. expansion plans for German hyper-efficient supermarkets Aldi and Lidl that had the grocery retailers already on edge. After all, online shopping isn’t new, with WalMart’s (NYSE: WMT) Jet, Kroger’s (NYSE: KR) HomeShop, and Costco’s (NASDAQ: COST) Shipt being just some of the current home grocery delivery options.
Unlike most industries, where online shopping is the norm, grocery shopping has been slow to change. Thus, despite the rapid growth rate, home delivery accounts for slightly more than 1% of the industry’s more than $700 billion in annual sales. It makes sense, because, whereas most consumers trust the pizza shop to deliver a consistent product, most shoppers don’t trust their own family members to pick out their produce.
The industry’s challenge is to implement new technologies and models to improve efficiencies and the broader shopping experience, as well as improve the company’s street cred. For example, to lower costs and reduce its carbon footprint, Wal-Mart began experimenting with solar energy panels and Bloom Energy’s “Bloom boxes,” which efficiently incorporate a cleaner electrochemical process to convert natural gas into electricity.
With that in mind, we’re going to look at five must-have technologies/trends that grocery retailers should incorporate.
Grocers use more energy than other retailers because of their refrigeration demands, which remains one of their largest fixed costs. Alltemp (OTCB: LTMP) recently created a new refrigerant that maximizes performance via saving energy and increasing equipment life while protecting the environment; after testing in several Fortune 500 facilities, the refrigerant is now ready for market.
Refrigeration, air conditioning, and heat pumps account for about 10% of the global carbon emissions and energy consumption. Case studies confirm that Alltemp’s refrigerant significantly reduced the AMP draw to more than 40% from 10%. Alltemp’s test case at a McDonald’s restaurant location recorded a 23.7% kWh in refrigeration savings, while tests at 7Eleven, which more closely resembles the retail grocery model, reduced the refrigeration use by 38.16%.
Additionally, government regulations and rising R-22 prices were going to force millions of homeowners and business owners to replace their R-22-based air conditioners, creating a massive landfill nightmare and creating the financial burden of replacing decades’ worth of existing units. Plus, the energy savings are enough for some users to qualify for Energy Tax Credits.
In many markets, daytime lighting costs can nearly be eliminated by incorporating solar lighting tubes, while LED lighting can go a long way to reducing lighting costs and improving the shopping experience.
The general store at one point in time was the community hub of every American town; today’s grocers should embrace that important role and actively reinsert themselves as the historical community hub. Opportunities to do so range from offering cooking and nutrition classes to helping landlords attract complementary tenants so busy shoppers can order their nonperishable online, attend a workout class or other activity, and afterward spend a few minutes picking out their fruits and veggies.
Grab a box of Cascadian Farms granola and I challenge you to squeeze it, wherever you want, without pressing against the contents. Unlike the traditional cereal offerings, which are in huge packages, but only half full, most consumers want quality ingredients in sustainable packaging.
Bio friendly packaging
Speaking of sustainable footprint, major improvements in packaging materials will be the next wave of consumer interest. Companies such as Coca-Cola have been introducing bioplastics into their production process for a few years, with the ultimate goal being a 100% bioplastic. Industry rival PepsiCo has also experimented with edible packaging options. The “plant” bottle should be a huge improvement by reduce its environmental impact and, hopefully, reduce the negative health effects of BPAs and other toxins related to common modern packaging.
Instead of food inflation through loss of quality, it’s time that the grocers get in line with today’s trends.
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