Over the past 100-plus years, the food shopping experience in the U.S. has evolved primarily through large step-changes driven by innovative new store formats. Another such step-change can be expected in the not-too-distant future.
At the turn of the 20th century, food shopping was complicated and cumbersome. Consumers purchased their meats from the butcher’s shop; produce at “green grocers” or fresh markets; breads and pastries from bakeries; and shelf-stable, packaged food products at “dry grocery” stores such as A&P, the dominant such retailer at the time. In all instances, the stores were operated by clerks to whom the order was given and who would fulfill the order by picking items off shelves and displays behind a counter. Many of these stores allowed their customers to order remotely by note and later by phone, and clerks would prepare the order for pickup or even deliver it to the customer’s home.
A radical change was ignited in 1916 the dry-grocery segment when Clarence Saunders launched Piggly Wiggly, the first successful operator of “self-serving” food stores. In these stores, there were no clerks or counters between the customers and the products on shelves. Prices were displayed on tags, and customers collected their own items in hand-carried baskets and then went through a checkout station to pay for them. Customers very much liked the 20% reduction in prices enabled by the huge improvement in operating efficiency through the elimination of clerical labor costs.
Even more importantly, though, customers actually preferred this way of shopping over clerk service for two primary reasons. First, customers had direct access to product information and prices, enabling them to make purchase decisions at their own pace without feeling the pressure of occupying the clerk’s time. Second, they didn’t have to wait to be served by a clerk during busy periods. As a result, dry-grocery stores began a rapid shift to the self-service model, which transformed not just food retail but eventually all of retail.
Digital changes everything
Even though the emergence of e-commerce has dramatically impacted almost every other segment of retail, it had very little impact on customer experience in food until quite recently. This is due to a variety of unique challenges associated with selling food online, the most fundamental of which are (a) the cost to the retailer of performing order-fulfillment processes that are free in the self-service model and (b) the fact that raising prices to cover these additional costs is not realistically feasible.