The founder of SupermarketGuru said the $13.7bn Amazon-Whole Foods deal would accelerate the grocerant trend - whereby food retailers are offering fresh prepared hot or cold food made in store that's ready to eat or heat - and effectively competing with foodservice outlets.
“Whole Foods has done a good job in grocerants, but I would expect with this partnership it will escalate and do a phenomenal job,” he said.
“What Amazon is going to do, is bring new intelligence into the grocery world… We’re going to see people who are computer wizards, molecular biologists, sustainability experts, and people like that, coming into a whole new world. And they’re going to see grocery through a lens that has never been seen before.”
Grocery hacking with technology
Lempert said future developments from Amazon-Whole Foods would likely center on technology to improve efficiencies and reduce instore labor costs.
“Expect to see more robotics in the back room and even robots like Pepper in the front of the house.”
‘Pepper’ is a humanoid robot developed by SoftBank Robotics that can interact with humans.
Asked if consumers would adjust positively to being served or greeted by a robot, Lempert said it would bring the “curious and trendsetting” millennials and generation Z into grocerants and others would soon adjust, just as they had done with drones and driverless cars.
“Keep in mind, companies like Amazon specialize in life-hacking – they want to work out how to do everything easier. So, that’s going to be a very quick change that we’re going to see in the supermarket world.”
Use of such technologies, he said, would also free up budget that could be used investing in higher caliber chefs and more interesting food offerings and recipes.
The Amazon-Whole Foods pair up would also see Amazon drive developments forward in online deliveries, he predicted.
“Amazon currently has 100 distribution centers here in the US. When they take over Whole Foods, they’re adding another 460 [ie. Whole Foods stores] and if you look at the Amazon prime member - 90% have a Whole Foods within ten miles or less from them. And the result of that is, Amazon Delivery is really going to have a huge push forward.”
Applied to grocerants, Lempert said an online delivery model would add a new offering to the restaurant delivery sector, competing with the likes of UberEATS and DoorDash.
“…Today in America, people really like ordering online and then it gets divided between those who like to pick products up and those who want it delivered,” he said.
With grocerants headed the direction they were, he said customers would be able to do both.
Store eats and locker rooms
Asked what sort of store layouts Amazon-Whole Foods might develop in the future, Lempert said it would likely follow Hy-Vee’s latest model in downtown Des Moines in Ohio – soon to be considered ‘the norm’ in grocerants.
“The store is about 30,000 square foot and it’s 50% fresh foods and grocerant, which means a lot of the other items that are typically on the shelves like cans, jars and boxes are not in the store. What they’ve done, is put out lockers in the front of store so you can go online and order the toilet paper and bottled water – those things you never want to run out of and are brand loyal to.
“You can have your lunch or dinner, do your shopping for fresh produce and then on the way out you can stop at your locker and collect all your other items. That, for me, is what’s going to happen with Amazon-Whole Foods,” he said.
Lempert said the concept would be difficult for some customers to adjust to, namely the ageing baby boomer and overall senior category, but younger consumers would love it.
“Frankly, they love going into store and being able to get a glass of wine and shop the store with that glass of wine!”