Retail

Mobile Checkout, Resetting Store Experiences And Fairway Market’s Fight To Stay Relevant In NYC

Fairway Market

While innovative grocery has been in the news heavily over the last several years — with seemingly every name in the game trying to keep pace with each other in terms of online ordering, delivery services, friction-free checkout and a whole host of other digital upgrades and advancements made possible by the mobile era — New York City’s Fairway Market believes that innovation has always been the heartbeat of grocery.

A Fairway representative told PYMNTS that Fairway’s goal has been to “embrace the future as it happens” since it first made the jump from being “a small, corner, fruit and veggie stand on the Upper West Side of Manhattan” to being a full-service chain of grocery stores for the people of Manhattan.  Today Fairway operates 15 stores in the New York, New Jersey, Connecticut tri-state area, as well as four liquor stores.

But from its early days with sawdust-covered floors, items on milk crates and a single cash register, Fairway today is now a fairly beloved local institution in the city known for its selection of small-batch goods and exotic and varied food offerings.

“We were always first to offer unique, different, imported, things-you-didn’t-know-existed foodstuffs,” Fairway notes.

Today, Fairway Markets reports, it is a very much the same store as the one that first opened its doors to the public over 85 years ago, retaining its dedication to unique selection, small vendors and exclusivity in its offerings. But it is also aiming to develop into newer and more frictionless version of that brand.

And while the firm is avidly embracing reinvention as what it has always done, it is worth noting that reinvention is something that Fairway Market has needed in recent years. Fairway never posted a profitable quarter after going public in 2013, and interest payments on its $280 million in debt has diminished its cash resources. The firm briefly entered bankruptcy in 2016 — though it was able to exit after reaching an agreement with its  lenders to cut Fairway’s borrowings in half in exchange for equity.

Fairway’s new CEO, Abel Porter, has repeatedly affirmed that the dark days of two years ago have passed, and the firm is ready to compete.

“We’ve moved dramatically quickly to be able to compete,” Porter said in an interview on Nov. 16. “We’re not burning cash, we’re accumulating cash.”

But Fairway, with its small scale, is increasingly standing toe-to-toe with rivals like Amazon-owned Whole Foods and Trader Joe’s that both sell similarly unique goods for discerning and high income “foodie” customers — meaning many have their doubts about whether a small “David” like grocery can compete in with not just one Goliath, but a slew of them setting up camp in its hometown.

In his brief tenure as CEO, however, Porter has focused on upgrading the shopping experience and promoting variety at Fairway.

Porter also told Bloomberg in late 2018  that Fairway is no longer looking to expand so much as it to better optimize the square footage it has — adding things like like noodle stations and poke bars, and experiences like a cooking school in Manhattan at its flagship Broadway and 74th street location. A wider selection in the produce department, which amounts to 20 percent of Fairway’s business, has generated about 7 percent more revenue in same-store sales, Porter said.

Fairway has also of late embraced delivery through partnering with grocery delivery services Instacart, Shipt and Google Express — a move that has pushed eCommerce growth to a 50 percent annual rate.

And as of this week, Fairway Market has officially launched mobile self-scanning checkout in all of its stores. According to Fairway Market, the move is a first of its kind for grocers in the region.

Via FutureProof Retail to introduce the grocery technology, Fairway now lets shoppers use the Fairway-branded mobile checkout app to scan products with their phone cameras. Weighted items, such as produce and products from the olive bar or hot bar, can be weighed at digital scales.

Checkout is handled through a QR code that appears when all products have been scanned and purchased. Instead of going to the cash register, the consumer can just walk out the door.

“We’re thrilled to launch our new mobile shopping experience, providing Fairway Market customers with a cutting-edge shopping convenience,” said Mike Penner, director of retail applications and technology at Fairway Market. “This continues Fairway’s tradition of offering the best food for our customers in the way that’s most convenient to them. The response from mobile shoppers has been incredibly positive.”

Fairway is a small fish in a great big pond that in recent years has been filling up with sharks.  It will not be an easy swim for the small market. But it is clearly serious about upping the level of its game, from a variety of angles — and for New Yorkers the market’s iconic status combined with its willingness to embrace the new might just keep its doors open for another 85 years.

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