It’s something that has bugged me all weekend. What on earth is going on with Foodstuff North Island’s new Auckland supermarkets? An article in the NZ Herald this weekend hails the arrival of a new supermarket chain called “Fresh Collective by New World”, which appears to be small, boutique supermarkets, as described in the article by Chris Quin, the company’s chief executive:
“The store is quite different to what we’ve done in the past,” Quin said, showing off a new central hub design layout in a prototype store where staff such as butchers and bakers would be handling and processing goods, interacting with customers and answering questions.
Doesn’t sound that exciting – instead of the butchery and the bakery sections being located on the side of the store, they will be in the middle. But the most surprising thing is that Quin is pictured in the middle of the prototype store – rows and rows of white-paper covered polystyrene blocks with grocery items drawn in a black marker pen. He calls it a “three-D reality, a richer experience”. There is even a video of Quin in the middle of his 3D reality extolling the virtues of this supermarket (in the background there is one section where all the pictures are coloured in – why?).
Let’s compare Foodstuff Northland’s approach to retailing in the 21st century to that of Amazon, a company which has made three very interesting moves:
- Announced an agreement to buy the Whole Foods chain in the US for $13.7 billion,
- Is expected to enter the Australian retail sector this year,
- Is experimenting with a supermarket with no checkouts using a combination of machine learning and computer vision, called Amazon Go (although the public launch appears to be delayed).
Now you might think that none of that has anything to do with NZ, that Amazon is no threat to supermarkets in our little country at the bottom of the world. And moves like that daft concept store, certainly demonstrate to me they aren’t at all worried by the one of the world’s largest and most voracious tech companies destroying their business model. But here’s why I think they should care:
- In an insightful piece, the columnist Ben Thompson writes that Amazon bought Whole Foods so it could become its first customer in its ambition to create the world’s most dominant supply chain. Why would NZ be immune to this? Kiwis have been enthusiastic customers of arguably the world’s most dominant cloud computing provider Amazon Web Services.
- If Amazon gains a strong foothold in the Australian market, how long before it looks to move into NZ?
- The Amazon Go idea of using machine learning – which relies on massive amounts of data (another good reason for the Whole Foods purchase) – to enable people a kind of friction-less shopping experience is actually the future of shopping. Not moving the butchery into the middle of the shop!
Now I’m only going on what was written in that NZ Herald article (I did look on the Foodstuffs North Island website but it didn’t have any information about the new stores). The company may have very exciting plans concerning deep learning algorithms, they just decided that now is the wrong time to tell us, and instead thought it was more appropriate to create a polystyrene store.
Apparently the model was developed so supermarket owners/operators, executives and suppliers could give feedback on the “entirely new brand”. Not falling into any of those categories I haven’t paid a visit, but judging from the article and promotional video, I’m tempted to suggest that they knock down the polystyrene. Amazon is closer than you think.