New supermarket Addie’s opened its first store in Norwood, Massachusetts, launching a disruptive new concept in the retail industry: a pick-up-only store designed solely for stocking, storing, and bagging groceries, so the shopper doesn’t need to set foot in the store.
To make this new concept of shopping without having to enter the grocery store a reality, Jim McQuade, co-founder, and CEO of Addie’s, raised seed funding of $10.1 million led by Disruptive Innovation Fund, the venture capital arm of Clay Christensen’s Rose Park Advisors.
“We believe that taking better care of busy families should be done in a way that also takes care of our team, our community, and our planet,” McQuade said. “With our seed funding, we’ve built an end-to-end experience to serve people in and around Norwood in a way that can be replicated in the suburbs nationwide. We look forward to quickly expanding, offering busy families across the country drive-up grocery convenience without compromise.”
The pandemic has accelerated the need to reinvent how busy consumers shop for groceries. According to Mercatus, online grocery shopping will double to more than $200 billion by 2026.
However, traditional retailers and established grocery delivery apps have struggled to optimize the consumer experience.
Home delivery options can only extend beyond densely populated urban environments, and curbside pick-up from traditional supermarkets could be more efficient, reliable, and unprofitable. These models have significant limitations: few available time slots, low-quality products, service fees, and frequent stock-outs, leading to shopper frustration.
Rather than merging in-store shopping, online shopping, and direct-to-consumer delivery models, Addie’s has reimagined all aspects of shopping, from inventory management to store distribution, enabling accurate and affordable pick-up in a few minutes, the company said in a press release.
Consumers shop through Addie’s app or personalized website and choose the pick-up time that best fits their schedule.
The company reported that Addie’s saves time, money, and valuable resources by redesigning the store as an on-site warehouse and the parking area as a convenient pick-up point. These savings translate into higher starting wages for store employees ($20 per hour), all while maintaining competitive prices for customers and using only a quarter of the energy needed by regular supermarkets.
“The 100-year-old grocery business is not immune to disruption. The traditional business model of in-store shopping makes serving convenience-focused shoppers highly challenging. We see disruptive potential in Addie’s technology-powered drive-up grocery model and are excited to support them as they launch,” said Matt Christensen, CEO and managing partner of Rose Park Advisors.
The first Addie’s store occupies 22,000 square feet of space. The grocery store offers a curated selection of national and local brand favorites and constantly improves its assortment based on customer searches and requests.
Consumers purchase groceries through Addie’s app or personalized website, then choose a pick-up window. The company plans to expand across the U.S. and open 10,000 stores over the next ten years.