A Frictionless Marketplace Operating in a World of Extremes

These are both evolving and challenging times for food distribution and retailing. Never before have the same consumers behaved in so many different ways. Consider Sally, a hypothetical shopper, who may begin her food shopping experience by visiting the neighborhood supercenter, searching for items she perceives to be undifferentiated, seeking larger sizes and the best prices for given products. Sally decides to stop at Whole Foods to satisfy particular nutritional needs, social causes, or deeply-held beliefs such as organic food products are safer. On the way home, she stops by the fresh seafood distributor to pick up today’s fresh catch for this evening’s meal. Waiting for her when she arrives at home is the wine she ordered on the internet three days ago from her favorite vineyard in another state. Sixty years ago, Sally’s shopping experience would have been quite different. Shopping at a limited number of specialized food retailers like the butcher or general store, she would be greeted by name. The day’s current events, and mutual friends would be discussed while the retailer assembled her order based on her list and known purchasing habits. Today, consumers face a much different shopping experience. They have increasing choices regarding where to purchase their meal solutions. Sally could just as easily have decided to stop by the local Boston Market or the neighborhood grocery store deli to pick up a ready-toeat meal in answer to the question: “what is for dinner?” Where are we headed and what forces have moved us from the shopping experience of sixty years ago? If the forces and trends identified in this paper hold, there are at least, two, inter-related dimensions to describe what future grocery supply chains might look like in a frictionless marketplace, operating in a world of extremes. Frictionless (2000 and beyond) The “Frictionless Marketplace” is characterized by a renewed emphasis on the individual shopper. Redundant supply chain components such as warehouses are eliminated and the retailer once again becomes the “Agent” for the shopper, facilitating the transfer of goods and services from manufacturers to end-users (Terbeek, 1999). Greater customer focus must go beyond the superficial by addressing all the basic building blocks of the organization. The status quo must change from disconnected, multiple channels, and silos to a unified orchestration of the customer experience. Retailers need to be capable of delivering a unified seamless customer experience that treats customers as the unique individuals they are. In a frictionless marketplace: • Core competency arises out of anticipation of shopper needs. • The internet, the dominate form of technology, links all supply chain participants. • Information technology is applied to the individual shopping experience in ways never dreamed of in the past. Articles in this Theme: