If you like the shopping scene now, get ready for more change faster. If you think the shopping escalator is going too fast already and you want to get off, you ain’t seen nothing yet! At least that is the message I took home from The Future of Shopping by Jeorg Snoeck and Pauline Neerman. I for one am looking for an off-ramp, but it is not looking good. Just coming through a home renovation, I was able to get the exact models of range and microwave oven I wanted by going online. Unfortunately, it meant renting a truck and hauling the range 160 miles from an outlet store to home and adding a 300-mile round trip to an already planned visit up-state to claim my microwave oven and bring it home.
I like to shop at my hometown bookstore, but I get much faster service and even delivery on Sunday from Amazon. Snoeck and Neerman indicate that today’s consumers want their purchases customized to their tastes, cheap and right now. If a company can’t meet their needs, they will go somewhere else. The bigger a company becomes, the more likely that it can provide it cheap and right now, particularly when it has competition. The authors project more consolidation and fewer companies bidding for our dollars in the future. More Amazon, Walmart, Wayfair and Pinterest for example. My comments to their own words in bold (with the appropriate page number) follow:
“Retail as we have known it for centuries is dead.” (page 11) The Future of Shopping is mainly about FMCGs (Fast Moving Consumer Goods) and how marketing and distribution will be affected by continuing changes in the marketplace. Only one chapter is devoted to food, but many of the principles described in other chapters have applicability to food. Their projections have these goods moving faster with savvy consumers looking for quick service, the lowest price, the ability for returns if not completely satisfied/delighted, and part of a unique experience with a WOW factor. Those companies that can adapt rapidly will survive. Those that can’t will disappear. When price becomes the primary factor the big players who can remain nimble will likely squeeze out even the most innovative competitors.
“This fourth industrial revolution is powered by smart technology, which for the first time is now capable of self-learning. In addition to the physical world, there is now a new digital dimension, which is starting to intertwine itself inextricably with the corporeal.” (p. 15) Will AI and its algorithms make us more productive and give us freedom or will it squelch personal creativity and put many of us out of a job? The Future of Shopping tends to see a bright new future for us as we consume more and more FMCGs, services and experiences. A more dystopian future is suggested by Andrew Yang in The War on Normal People. Maybe I am just getting too crotchety in my old age, but the vision of shopping in the future described by Snoeck and Neerman frightens me more than it reassures me. The reason I read this book and decided to review it, however, was because of the implications on how we will shop for food in the future.
“Direct sales sound appealing, but it is not easy to make the distribution model viable. Besides shoppers will not readily give up the convenience of one-stop shopping at their local supermarket.” (p.244) Distribution will be the challenge as online shopping becomes more and more prevalent. It is one thing to order packaged, shelf-stable food for delivery, but what about wanting to pinch the premium bread or squeeze and smell the fresh peaches? The idea of shopping at a particular site and having it shipped direct is appealing, particularly if it guarantees predictably superior quality. Eliminating the middleman is what direct sales are all about, but are we really eliminating the middleman or are we just purchasing items from an online sales group who subcontracts the actual buying to a number of suppliers? And who is the transporter? DHL? UPS? FedEx? US Postal Service? An independent shipper? And how do those items get to the transporter? The middleman is really a supply chain probably inhabited by numerous minimum-wage workers who may soon be replaced by robots to cut costs.
“For many routine purchases, the physical store no longer has an added value in an era where it is possible to order products efficiently online or through a subscription service.” (p.245) For a busy person capable of planning ahead, it makes little sense to spend precious time buying shelf-stable ingredients and products at a supermarket. Such items can be ordered online and delivered to the doorstep. Perishable items represent a different challenge. Subscription services like Hello Fresh can also deliver items to our homes in a container that will keep the contents from deteriorating between the time of delivery and time of arrival home. Some of these companies even offer a service to enter the home and put perishables up in the home refrigerator/freezer.
Once-a-week drop-off of boxes of fresh organic fruits and vegetables through a CSA (Community Supported Agriculture) provide another solution for harried food preparers. The current trend is to move away from individual foods to meal solutions—either in a box at the supermarket, a subscription service or other means. As noted earlier, providing a unique experience will be important, but the winning supplier will be the one who can deliver that dining experience at the lowest price, soon if not right now in a convenient form taking minimal preparation time. The competition will be fierce, and only a few suppliers may survive, and they may not be as responsive once they achieve market dominance.
“what we eat must become healthier and more sustainable. This is an area where technological evolutions can have a serious impact on making this possible.” (p.247) An alternate quotation comes from Best Before: The Evolution and Future of Processed Food which suggests that
“We have tied the hands of the food scientists who are most interested in taking processed food in the direction we would like to see it go—healthful and sustainable—and have enabled multinational corporations that are keen to get their marketing departments to sell us what they most want to produce.”
The campaign against ultra-processed food may tie the hands of food scientists. How is it possible to develop healthier foods by evolving technologically when limiting any processed food to five or fewer ingredients? Are we letting a cute food rule (Rule #6 in Food Rules by Michael Pollan) become a guiding scientific principle without solid scientific evidence? Possibilities of producing meat-like substances, either plant-based or through cell culture that can overcome animal welfare issues are condemned ahead of time because they are identified as ultra-processed and proclaimed unhealthy by association.
As one who gets more packages of books by mail than I would like to admit, next day delivery is great, but how sustainable is that? The problem is made even worse when perishable foods are the FMCGs in question. I have seen no Life Cycle Assessments on the home delivery of foods. I find it hard to believe current delivery options are more sustainable than the one trip to the supermarket my mother made in the 60s and 70s to bring home all the groceries she would need for the week. One knock against processed foods is that they don’t rot, but rotten fresh produce becomes inedible food waste. How sustainable is that?
“People, it is argued, need to be protected from themselves, in the manner that has already happened for tobacco and alcohol. If the food industry takes no action, the government will be forced to step in and impose limitations, which is the solution favored by the World Health Organization.” (p.248) Protection from what? Harmful foods, supposedly. There are basically two types of products that are deemed harmful: (1) those high in sugar, fat and/or salt and (2) those “full of preservatives and artificial ingredients that might not be best for you and your family.” The NOVA classification scheme has conveniently grouped these two types of products with functional foods into a mega-class it has called ultra-processed food. Distilled spirits appear to be no longer an ultra-processed product as the definitions have been modified.* Led by Whole Foods, Panera Bread and other food operations, Big and Little Food try to obscure the push against processed foods with clean labels.
A push will soon be made to provide warning labels on ultra-processed foods. Another strategy to protect consumers include placing heavy taxes on foods high in sugar, fat and/or salt. One way the food industry may find around such protections is to provide ingredient mixes for 3-D printers as most homemade foods are not considered to be ultra-processed.
Bottom line. I found the sneak peek offered by The Future of Shopping to be simultaneously intriguing and disturbing. It seems to be over-simplistic with a too rosy view of marketing opportunities and too dismissive of the technical challenges needed to make it happen. Like any good study it opens up more questions than providing clear answers:
- Is the current state of shopping just the beginning of a megatrend or the completion of a major shift?
- Will AI help us live better lives or put many of us out of work and unable to afford these great shopping opportunities?
- How will we balance online and instore retail experiences?
- How will the food industry produce healthier food given the restrictions on ultra-processed products?
- How sustainable is an economy based on online sales and home delivery?
- How will consumers react to being told what they can and cannot eat?
Next week: The future of marketing and distribution of food
PS: Jeremy Chafas at the Eat This blog has just posted a round-up of news on ultra-processed food including an extensive review of my posts on this blog site in June. I have responded to his round-up with my comments. Check out our dialog.