INDUSTRY: GROCERY
(Photo: FairPrice.com.sg)
NTUC Fairprice: Building the grocery store of the future
What does the future of supermarkets look like in Singapore, and how will it change how you shop?
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f you’ve ever wondered how the future of grocery might look, NTUC FairPrice is now giving you a glimpse into that space, and allowing the public to experience its new concepts for both online and offline shopping. Talking with Singapore Business Review in a recent podcast, head of digital business at NTUC Johnny Wong explained some of the innovations that Singapore’s biggest online grocery platform FairPrice was soon to reveal. Wong said the last 12 months have been challenging. When Dorscon orange was implemented, the demand for online groceries exploded. FairPrice saw as much as five times the normal peak demand. But they rallied by relying on their in-house team. The fact that they handle their own logistics helped as well as their many networks of brick and mortar stores.
Starting a ‘dark store’ from scratch would need a level of automation that we have to insert over time to keep prices affordable
Once they found their footing, Wong said their online capacity grew as much as four to five times. Online grocery penetration went up to 15% from a previous 7%. This challenge as well as the surge in demand for online groceries actually helped birth the new concept for the future models of online and offline groceries. The grocery store of the future FairPrice operates on three different models for its online grocery platform. They have the central warehouse model, an automated warehouse system that services near and far customers. Then there are the FairPrice supermarkets and hypermarkets across Singapore that make hyperlocal deliveries within a three-kilometer radius for faster grocery deliveries. “Because there are so many eyes in that hypermarket with a large
supermarket, looking at the fresh produce and making sure that those fresh produce is as fresh as can be, then you can have a guarantee that vegetables and fruits like it come to you are really good,” Wong added. In fact, 60% of orders have fresh produce on them. But what they’ve recently started doing is creating what Wong calls “dark stores”. This is a brick and mortar store that FairPrice purposely closed to the public, to cater exclusively to online deliveries. However, these ‘dark stores’ may still be a long way from full automation. “Today, there’s a lot of manual picking in the store because we just took an existing store with a fixed layout. But certainly, if we were to do a ‘dark store’ from scratch, we would be looking at a level of automation. This automation that we probably have to insert over time because we, as a social enterprise, want to keep prices affordable, as much as possible to a Singapore consumer,” Wong said Still these ‘dark stores’ have been doing well and Wong added they were planning to open more in the future. FairPrice didn’t just stop with its online platforms. They started experimenting recently with an upgraded in-store concept called “Scan-and-Go”, in what Wong describes as FairPrice’s many different initiatives to digitise the instore experience. In stores that offer the “Scan-andGo” feature, customers are able to pick their products, use their phones to scan and pay for the items, and then simply walk out with their purchases. There are no long queues, no waiting time, and almost no contact whatsoever. The system also uses A.I. with machine learning algorithms to determine trust scores. FairPrice plans to use these data to better understand customer preferences and to personalise the in-store experience. “Even beyond personalisation, we’re looking at doing some interesting things for both an in store experience, and also the online grocery experience. Stay tuned a little bit,” Wong said. SINGAPORE BUSINESS REVIEW | DECEMBER 2021
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