Dispatch from Day 1 of GroceryShop: Grocery at a crossroads

Early in the pandemic, Sam’s Club had one priority: Keep everybody safe.

That helped spur the Walmart-owned membership club to launch curbside pickup in just six weeks, Tim Simmons, the retailer’s SVP and chief product officer said Monday during the first day of the GroceryShop conference that brought about 4,000 attendees to Las Vegas.

In the years since COVID made shoppers fearful of their weekly grocery trip, consumers have continued to shift their behavior and make new demands of food retailers.

“I understand the temptation to slow down, but I’d say we’re accelerating on the innovation front,” Simmons said.

In fact, Simmons announced Monday that Sam’s Club plans to build a design studio near its Bentonville, Arkansas, headquarters to speed the retailer’s pace of innovation. The company is scheduled to break ground on the design studio in the spring and open it about a year after that.

“We’re democratizing innovation and design thinking,” he said. “Any team can go in the collaborative space to fall in love with a problem and, as a team, work on the best ideas we can to solve the problem.”

Retailers and industry experts alike Monday called out a grocery industry at a crossroads, one that will be forever changed by the pandemic and the swift pace of innovation that followed.

Plus, there are the many added pressures facing the industry right now: Inflation, ongoing COVID concerns, excess inventory, labor challenges, supply chain disruptions, rising energy costs and a consumer whose habits have changed and whose spending power has been pressured.

“Consumers are shifting priorities faster than we’ve ever seen them in this industry,” said Laura McCullough, managing director of North America for data firm NielsenIQ.

No longer can grocers focus solely on the in-store experience or on digital channels. It’s truly an omnichannel world.

“People are going to shop online and in-store for the foreseeable future,” said Bryan Gildenberg, SVP of commerce with Omnicom Commerce Group. “You can’t just be good at one or the other.”

Five years after being acquired by Amazon, Whole Foods Market continues adding tech elements to its shopping experience. It’s testing Amazon’s Just Walk Out technology in two stores, along with Amazon One palm pay tech and “smart” Dash Carts.

But Whole Foods is also further refining its brick-and-mortar offerings, CEO Jason Buechel said in his first public appearance since taking the top spot at the grocery chain at the beginning of the month.

“We’ve hit a great stride with our partnership with Amazon,” Buechel said. “Not only are we able to learn a lot from each other but we’re able to co-create … We’re definitely in constant conversations. We’re able to learn from each other.”

Even as Whole Foods becomes more tech-minded, though, the grocer remains focused on its in-store shopping experience, he said. A new Whole Foods in Manhattan, for example, has an open butcher station so customers can watch the meat being cut.

“We’re really excited about bringing back the theater of retail,” Buechel said. “It’s been a little bit difficult during the pandemic … It’s going to be a hybrid experience. Customers aren’t looking to talk to a robot about what type of cheese they want.”