Compared to retail categories like apparel and electronics, the grocery industry has been slow to adapt to changing times. More than half of consumers never buy groceries online, a statistic that says less about consumer demand than it says about the state of the industry.
But change is coming. Amazon’s entrance into the market last year caused a stir — leading to many, many headlines — but the ecommerce behemoth is hardly the only company out there trying to disrupt the grocery market. The percentage of grocery purchases influenced by digital media nearly doubled last year, and by 2025 roughly one-fifth of U.S. grocery sales are expected to happen online. Now it’s time for technology vendors to step in with new innovations, so that the industry can continue to evolve.
Here are five firms working to change the way we buy groceries right now.
In a bid to become more than just a company that delivers groceries from local stores, Instacart acquired the Canadian white label grocery platform Unata earlier this year. According to Unata’s CEO, the acquisition was done to combine the power of the two companies’ technologies and with the goal of creating the first “fully comprehensive, configurable digital solution for grocery retailers.” While specifics are scarce, the acquisition signals Instacart’s commitment to growth and its interest in developing new solutions to help local supermarkets compete in a digital world.
A startup specializing in software for grocery e-commerce, GrocerKey’s platform allows people to shop from any device. GrocerKey customers, including regional supermarkets like Piggly Wiggly, Food Bazaar, and Kowalski’s Markets, can manage their stores and have their own staffs pick orders with the startup’s mobile operations app. Earlier this year, the company released a mobile self-checkout solution that lets shoppers create lists, scan items into their carts, and complete their transactions with app-based payment options. Pricing and nutritional information, along with turn-by-turn navigations, are also available to guide customers through their local stores.
While Deliv isn’t solely focused on groceries—the same-day delivery startup serves all types of businesses and individuals—new interest from Walmart is making the company a real player in the grocery industry. Deliv joined forces with Walmart and the smart lock maker August last fall to test a service that would deliver grocery items inside the homes of Walmart customers. It also partnered with Sam’s Club in Miami to test last-mile grocery delivery in 2016. While Deliv isn’t strictly focused on the grocery industry, the perishable nature of most supermarket purchases, coupled with Deliv’s same-day crowdsourced solution, makes the startup a natural fit for the industry going forward.
Launched by Kroger in 2015, 84.51° is its data analytics arm. 84.51° is focused on developing new consumer engagement strategies. One of the firm’s most recent projects involved using data to help Kroger identify opportunities for innovation and expand its Simple Truth organic brand. In an interview last fall, the firm’s CEO said 84.51° sees 96% of every transaction, with the ability to determine what cars shoppers drive, whether they use Androids or iPhones, and other metrics. 84.51° is also using video of in-store traffic patterns to create better store layouts and determine which products should go on the “end caps” at the end of aisles.
Boxed has become the belle of the ball in recent months, thanks in part to talk of a potential acquisition by Kroger. The startup offers direct delivery of bulk-sized products, including groceries and household items, to consumers. Often referred to as a Costco competitor, Boxed has been able to compete on price by signing exclusive deals with brands in exchange for only selling one of certain types of items. Boxed has also added its own private label brands, along with launching a business-to-business unit. The B2B unit is part of what makes Boxed so attractive to potential buyers. Another aspect is its warehouse and fulfillment capabilities, which could be combined with a retailer’s to turn physical stores into distribution centers in the future.
Stephanie Miles is a senior editor at Street Fight.