When The Jetsons first aired, the Food-a-Rac-a-Cycle, a contraption that dispensed dinner at the touch of a button, was nothing but a futuristic fantasy.

Flash forward a few decades, and time-pressed shoppers can now replenish laundry detergent, cat food and diapers with the flick of the Dash Button, a WiFi-enabled button that can be attached to just about any surface.

“And literally with the click of a button, you can order replenishments," explains Kelly Ungerman, co-leader of McKinsey's & Company's e-commerce and omni-channel practice.

The Dash Button spurred a flurry of handwringing over whether such shortcuts would slow the inertia of consumption or, worse, make us stupid. 

But the overriding message is that the future is here, and the innovation in e-commerce is not poised to slow anytime soon.

A Technological Surge

Online grocery sales in particular are booming, especially in population-dense cities such as Hong Kong and New York City, where public transportation makes it difficult to lug multiple bags of food.

“By definition, it limits their basket size," Ungerman says. 

While emerging markets — the Asia-Pacific, Eastern Europe, Africa and the Middle East — show the most significant growth, bullish market predictors put U.S. food e-commerce at 15- to 20-percent growth over the next several years. Most growth in online grocery sales comes from Web-driven store transactions, which means brick-and-mortar businesses can get in on the action, too.

“A shakeout" is on the horizon, Ungerman adds, noting that smaller regional chains and grocery stores without the scale to compete – or a unique value proposition – are most likely to lag behind.

Ungerman says despite projected growth in the near term, the online channel will still only represent a small sliver of total grocery sales – and that success is not a sure thing.

“It’s not a slam dunk,” she insists. “There are real challenges to making it work, but the market is more poised for growth now as the supply side starts to catch up. Services like Amazon Fresh are expanding, brick-and-mortar retailers are starting to get more serious about a variety of models from home delivery to click-and-collect, and some disruptors are entering to fulfill unmet demand.”

For online-only grocers looking to tap into the exploding new market stream, stiff competition breeds invention 

Amazon Prime Air promises in the future to deliver quickly with the aid of drones. China's largest online grocery retailer, Yihaodian, enables shoppers to pick out virtual items from virtual shelves, all without ever having to leave the park.

“You can point your phone at an indicator in a public area, like a bus station, and it brings up a virtual store on your phone or tablet," says Ungerman. “And then you can literally go through and order what you want, and then have it all sent to your home."

Others target nostalgic expats looking for a taste of home. And, in turn, companies like Coke have a platform to tap into that nostalgia.

Last year, Coca-Cola re-launched Surge, a 90s-era drink taken off the market in the early 2000s, through an Amazon-only distribution pilot.

“We wanted to test the ability to distribute a brand to a targeted group of loyal consumers and were able to use a platform like Amazon to get national distribution to run our test" says Julie Bowerman, who runs Coca-Cola's North American e-commerce business.

Online grocery is still emerging and not easy to figure out how to ship our brands and packs through these types of distribution models, nor for our retailers to build the infrastructure and capability. However, consumers will be demanding the convenience of e-commerce, and so we must figure it out, she says. 

“Millennials and teens use online to shop and make purchase decisions at a higher rate than any other consumer group. It's conceivable these consumers will adopt online grocery shopping much quicker because of their orientation towards using (mostly) digital technology to make shopping decisions, " Bowerman says.

But for right now, it's primarily for busy families, mostly urban and affluent consumers," she says.



Online Grocery 604

E-commerce: Not Just for the Wealthy

Nick Nickitas, the 30-year-old CEO of Rosie Applications Inc., a supermarket delivery startup, hopes to make e-commerce no longer just the purview of the wealthy.

“The big question is: Now that we have these capabilities, how can we transform people's lives?" he asks.

Rosie reads retailer and consumer data to power an enhanced shopping experience. And even though the app is named after the Jetsons' maid, it brings a human element to the e-commerce experience.

“In our scenario, we don't force (customers) to trade the brick and mortar for technology," Nickitas says. “We're enhancing local retail, and enabling the small stores to compete with Amazon and all of the others."

Rosie helps level the playing field for retailers by providing them with the software they need to manage online orders.

“When you look at online grocery solutions that have come to the market, almost all have set to replace local merchants," says Nickitas. “Local retailers who have physical assets often struggle to connect with digital customers, because they lack technology to do so."

Grocery stores pay a fee for the service, which results in smaller markups and service charges, plus no sign-up fees for consumers.

Rosie's lower costs foster much-needed connections between retailers and clients with food-access issues, such as the elderly.

“That's a big part of our mission," Nickitas said. “Enabling local retailers to be competitive, but making sure everyone has access to healthy foods, no matter where they live, or what their economic situation is."

A few months ago, IBM named Rosie one of the top eight new startups in the world.

“Building a smarter, more connected planet resonates with IBM, and I think that's why they picked us," Nickitas said.

Rosie is currently available in eight states — New York, Massachusetts, Kansas, Illinois, Utah, Idaho, Colorado and Wisconsin, and will soon be available in Nevada and Rhode Island.

Welcome to the future.