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Issue Date: Vol. 53, No. 9, September 2013, Posted On: 8/22/2013

Vending Location Watch: Are Supermarkets Doomed?

Hank Schlesinger
TAGS: bulk vending, vending machine location, vending machine placement, future of supermarket, e-commerce, brick and mortar trends, AmazonFresh, retail trend, virtual shopping, home delivery services, FreshDirect, Stop & Shop's Peapod, online shopping, curbside pickup, Click2Go, online groceries

Is the supermarket destined for the dustbin of history? Will some of the most profitable bulk vending locations cease to exist in the coming years?

Some marketers are predicting that e-commerce will take a large bite out of the traditional supermarkets. If this seems far-fetched, retail experts suggest taking a look at what online shopping did to the bookstores and electronics outlets over the past decade. To be sure, Amazon is getting into the food-delivery business with AmazonFresh, as is Wal-Mart.

Two new concepts have already added convenience for shoppers. The first is home delivery services, not unlike those offered by FreshDirect, Stop & Shop's Peapod and other online grocery operations, which require trucks and distribution centers. The second combines traditional supermarkets with online shopping, and offers curbside pickup and payment for busy consumers; orders made at home are fulfilled and waiting at a designated time in front of the store.

The Pentagon is testing a new curbside pickup program for active duty military personnel and their families. The Click2Go program allows military customers to place orders online and then pick them up outside a base's commissary. At present time, the Click2Go program is being tested at Fort Lee, VA, with expansion set for bases in California and Nevada in the coming months.

Online sales of groceries are expected to grow more than 12% annually through 2017, while projections for traditional grocery stores will inch up only 0.2%. The trend is not limited to the U.S. South Korea has pioneered online grocery shopping with bar-coded billboards in which consumers scan items with their smartphones. And there are "virtual supermarkets" where aisles are filled with images and barcodes. | SEE STORY

For bulk vending operators who have long depended on the vestibules of local supermarkets, the change in consumer shopping habits could be profound. Whether the trend catches on and how fast retailers adapt remains to be seen.

Topic: Bulk Vending

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