Online Grocery Shopping Is Returning to the Physical World
In the beginning, the internet gave us music, and music stores closed. Then it gave us news, and newspapers closed. Next came books, and yep, bookstores closed, too. One could readily imagine a future in which brick-and-mortar retail of all kinds would soon follow.
Grocery stores that found success on the internet are instead returning to the physical world with a hybrid business model: the "virtual" supermarket, a shop for smartphone users that carries photographs and bar codes instead of food. After the success of locations in mass transit stations from Seoul to Philadelphia, the virtual supermarket is about to hit the city above ground. Chinese supermarket giant Yihaodian announced this week it is opening 1,000 brick-and-mortar locations.
According to Inside Retail Asia, the first "Unlimited Yihaodian" outlets will open in Beijing, Shanghai, Shenzhen, and Guangzhou. Customers can browse the aisles, scan codes, and have groceries delivered directly to their homes. There are no bags to carry and no check-out lines, and Yihaodian will be able to offer half-day delivery in China's biggest cities.
It's the biggest and latest in a series of decisions by supermarkets to create physical locations for online purchases. Last year, the South Korean branch of British supermarket Tesco put up grocery billboards in Seoul metro stations, enabling commuters to shop while they wait for the train. Sales rose 130 percent, and the number of the service's registered users increased 76 percent.
The U.S. online grocery store Peapod has followed suit. After trial runs in Philadelphia and Chicago, last month Pea Pod launched over 100 "stores" at commuter rail stations in Boston, Connecticut, New York, New Jersey, Philadelphia, Washington, D.C. and Chicago. In July, a Barcelona metro station inaugurated Europe's first virtual supermarket.
Grocery stores want to reach time-starved commuters, but they also seem to be capitalizing on consumers' desire to browse. It's one of the reasons why many people at least claim to still prefer physical bookstores, even as the monstrous success of websites like Amazon seem to negate that notion.
If you can't beat 'em, join 'em. Yihaodian has also experimented with subway stores, but the announcement this week marks a big move back into physical space. No longer will "virtual supermarkets" be only in mass transit stations. They'll occupy actual retail space in the city.
Top image: Reuters/Gustau Nacarino