Looking over the latest retail news this month and one picture about the state of shopping in 2024 is clearer than ever before: the more things change, the more they stay the same. While technology has undoubtedly changed the way Americans live, work, and shop the adage “if it ain’t broke, don’t fix it” still seems to be true.

Kroger’s partnership with the UK company Ocado, which had revolutionized grocery delivery in its home country with innovative robotic distribution centers, was one of the most heralded stories of 2018. Kroger believed so much in the competitive advantages of the technology that they began opening Ocado-based “sheds” in markets like Miami and Austin where the grocery giant has never had a physical store presence. Kroger hoped that Ocado’s convenience and speed would give them market share in places where people had never shopped them before. It turns out that didn’t materialize in a profitable way as customers weren’t interested in buying food from a retailer they couldn’t shop and see in person. As my research colleague Nicole Larson at Colliers put it in a recent LinkedIn post: “For brands eyeing sustainable growth, diversifying into physical retail is not merely an option – it’s an imperative.”

The grocery tech world was rocked again when Amazon announced it was pulling its revolutionary “Just Walk Out” technology from all its full-sized Amazon Fresh locations. The Fresh banner has been a rare misstep for the online behemoth that once hinted it could open as many as 600 Fresh stores by 2023. Today, with less than 50 open and many more projects built out but sitting vacant, Amazon has gone back to the drawing board and erased the primary differentiator between Fresh and other grocers: the ability for a customer to take things off the shelf, be charged for them immediately, and then walk out without ever going through a checkout lane. The stores were outfitted with hundreds of cameras and servers and cost as much as $4mm per store in technology capital expenditures alone. But after all that money was spent, the cameras never worked as intended. Over 70% of transactions had to be reviewed by a team in India before charging the customers which not only was wildly inefficient but raised serious privacy concerns to boot. While the company is now hoping to test a new cart-based scan & go system at its stores; customers have remained loyal to their market leading grocery brands.

In this months “Big View”, I’ve also included an article about the decline of ghost kitchens from The New York Times. Immediately after the pandemic, restaurant brands seemed to be in a mad dash to minimize dine-in options and maximize their footprints for the burgeoning app-based delivery market. However, apps like DoorDash and GrubHub have been largely unprofitable resulting in higher fees and a trend in post-pandemic behavior that emphasizes the social element of dining out, even if it’s just a lunch at a local fast-food restaurant. We want to be near people, and we want to know where our food comes from.

It’s worth remembering all these failures and pull backs as we read about the next big tech hope: artificial intelligence. I have no doubt that there will be major breakthroughs and game changing applications of this technoliogy but we need to be wary of “clever” solutions in search of problems no one is asking to be solved.

Mike Jordan