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What business are you in?

Do you know what business your company is in? Seriously, how clear are you about what problem your company solves in the world, in the community, by being in existence?

Let’s take a grocery store, for example – why do we need one? Have you ever asked this question? It is an especially important question today, when pretty much anything we want, can be delivered to our doorsteps.

To help answer the question ‘what business is a grocery store in’, let’s first analyze why grocery stores came into existence, after all, they didn’t always exist in the form they do now. In short, grocers, large and small, have the ability to purchase goods in bulk and then sell them to a larger volume of consumers. If we focus primarily on larger stores, such as supermarkets, their primary role is to have “everything in one place”, a way to bring many different goods to a single location, making shopping easier for customers. So, in essence, a grocery store was trying to solve the problem of access to goods. Consumers did not have to produce items that they needed themselves or did not have to go to individual producers to obtain the desired goods, instead, producers ‘came’ to the consumer via a grocery store. A very logical solution to a very real need.

Is this still the problem that grocery stores are trying to solve? Partially yes, but the need is no longer as strong as it was even ten years ago. Such platforms as Amazon connects producers with consumers directly. Green Bean Delivery is just one example of connecting farms directly to consumers. Today’s technology allows us to have a “virtual” grocery store. That, by itself, is a serious challenge to traditional Krogers, Meijers, and many, many other grocery retailers. What has been a limiting factor for a full ‘virtualization’ of a grocery store so far, is the delivery capability. Amazon’s manned logistics model is not for everyone, but the new age of unmanned vehicles that is rapidly entering our world, is shifting the entire delivery paradigm. Nowadays we see large chains, such as Kroger, testing unmanned delivery “carts” that will bring food from the store to your door. Companies all over the world are testing and deploying drones that can be used for a wide range of services. And this is just scratching the surface. Once the legal constraints are removed, unmanned vehicles will likely be everywhere.

And what if we go a bit further and add in the Internet of Things (IoT)? What if your fridge will be ordering food for you and a drone will deliver it to your door? What will the role of a grocery store be when the entire ordering and delivery mechanism is automated between consumers and producers? I won’t attempt to predict the place of supermarkets in this new world, but I am sure it will be different than today and the problems that they will be solving will be different. Will Kroger, Meijers and other grocery stores become simply warehouses where drones replenish? Maybe. Maybe they will focus on providing a unique ‘in-person’ experience at the store that can’t be done virtually? Or maybe they seize to exist altogether?

We need to ask these questions and attempt to visualize possible scenarios so that we can plan how we transform from today’s state to the future state. This is the first step to effectively prioritizing projects that we do today and those that we will be doing in the near future. Our change needs to have purpose and direction. Answering what business we are in and what business we plan on being in, is the foundation.

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