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few industries have been as impacted by
the coronavirus as the grocery business
when lockdowns began grocery stores
transformed themselves physically to
respond to safety concerns at the same
time demand skyrocketed pushing food
retail sales to record highs and in many
cases remaking entire supply chains I've
been in this business since I was a
child
covin 19 was something we've never seen
before
everybody has been affected and I think
the industry will be remade in the
future intrusion the pandemic has
triggered a boom in online shopping
instacart the nation's biggest
independent grocery delivery service
reported that its order volumes are up
as much as five hundred percent
year-over-year so what happens next what
will be the lasting legacy of kovin 19
for the food retail industry and its
workers simply put how will we shop in
the near future plastic shields masks
social distancing markers if you visited
a grocery store any time in the past few
months you've almost certainly
encountered these new cosmetic changes
but what about consumer behavior are we
shopping differently there to find out I
spoke with bill Bishop a veteran
industry analyst consumers are first of
all going to the store less frequently
they are rushing through the shopping
experience more quickly than normal
browsing is not fashionable during the
pandemic people definitely started
buying different things
Calvin Rodriguez operates an independent
family-run grocery store
Billy's marketplace in Ridgewood Queens
number one was paper paper products a
lot of non perishables and they were
buying more bulk before the pandemic
local independent stores like Billy's
marketplace made up only about 11% of
all grocery sales most Americans shop at
the nation's biggest chains like Walmart
Emma's
Whole Foods or Kroger the retail grocery
business is a huge business made up of
many competitors which makes it a
hyper-competitive very low margin
business before the pandemic grocery
stores in the inner city I would say
we're struggling a bit right there was a
lot of competition there was a lot of
big-box stores coming into New York to
cater to the tastes of his mostly
millennial customers Rodriguez set up a
beer bar and a coffee shop in the store
we wanted to create an experience and
that's where we thought this industry
was headed we wanted to create where you
could almost get everything in one we
know everyone that's walking in through
that door and we have a relationship
with our customers but with New York
still on partial lockdown those
offerings are simply not possible
because of safety regulations
fortunately late last year Rodriguez had
the foresight to jump on the biggest
trend in food retail e-commerce usually
we don't know the difference between an
instant car shopper and a regular
shopper with such low margins it's
impractical for smaller operations to
create their own delivery services
instead if independent stores like
Billy's want to sell online they have to
look to third-party companies like
Shopify or instacart previous to
pandemic it was about 1% which you would
say 1% is pretty small
after the pandemic had doubled it went
to 2% although a 1% increase may not
sound like much in an industry with such
low margins 1% can be the difference
between being profitable or simply
breaking even
before the pandemic online grocery
shopping was a small fraction of all
grocery shopping but since then it has
gone mainstream well the largest player
in grocery would be Walmart Walmart has
approximately 5,000 US stores which can
be found 10 miles from 90% of the u.s.
population we've been focused in this
space for a while now building a
curbside pickup and capabilities that
are in over 3,300 of our locations as we
stand today and growing each week
according to ward although the trend
toward online shopping has existed for a
while now
the coronavirus accelerated its adoption
we heard that customers felt more
comfortable if they didn't have to have
a personal exchange all of our curbside
interactions now a contact list in fact
my customers don't even wind that window
down and the the transaction is
conducted inside the vehicle our
associates load the trunk on the
customers behalf more than thirty eight
point six million Americans have filed
for unemployment since March creating a
new talent pool for those expanded
operations one area of growth has been
in non-traditional gig work
instacart for example relies on gig
workers to shop for its customers but
like many industries that rely on gig
workers the sustainability of this
delivery model depends heavily on the
workers compensation and whether they
are classified as employees the
long-term benefits for retailers with an
online presence lies than the data they
can collect about their customers if a
retailer has your business online and
offline it gives you a complete picture
the household or a much more complete
picture which is very valuable the
growth of e-commerce has also given rise
to dark stores the name of which can be
misleading dark stores aren't really
stores in a traditional sense because
they're not open to customers they're
more like Depot's that serve primarily
as a location for pickup or dispersed
delivery it's particularly important
because it's a route to profitability
the cost of picking the order so we call
pick and pack substantially less than a
dark store looking further into the
future a sign of things to come could be
online only companies like o kado based
in the UK okada only does home
deliveries from its warehouses akkad o
is a standalone online service that is
generally regarded as the absolute state
of the art if a typical supermarket is
50,000 square feet the Nakano unit is
350,000 square feet and it reaches
tremendous efficiencies
back in Queens Rodriguez remains
confident the ones the pandemic passes
his customers will still want the
neighborhood in store experience that
Billy's offers I'm really trying to get
people here I feel like if everything
goes online what kind of experience are
you really gonna have you gotta get out
of the house sometime so it's almost
sick make people feel at home that's
really what we wanted to do make people
feel at home at the store
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