Consumers today either go to the store or order deliveries online. Now, a California startup with Baltimore expansion plans envisions another choice, on-demand mobile stores that consumers hail like Uber rides.
Robomart, based in Santa Monica, California, calls itself the world’s first store-hailing platform. Vans stocked with merchandise come to consumers, who then pick out household cleaners, pain relievers, fruits and other items in contact-free transactions.
“This is the first new retail channel created since e-commerce,” said Ali Ahmed, Robomart’s co-founder and CEO. “We’re building the platform for store hailing. We believe it will be as big or bigger than what we saw in the ‘90s with e-commerce.”
Baltimore-based investor and marketing firm CEO David Warschawski also believes in that vision. His new venture capital firm, W Ventures, made a six-figure cash investment in the 4-year-old company earlier this month. The firm also will offer Robomart marketing services, valued in the six figures, through the Warschawski marketing agency in exchange for equity.
Under that agreement, Robomart committed to opening an East Coast headquarters in Baltimore within three years. It plans to launch an East Coast expansion from there.
“I do not think brick-and-mortar retail, especially in grocery, will go away, but will more people use delivery like Robomart? The numbers bear that out,” said Warschawski, managing partner of W Ventures.
Robomart says it delivers the store, instead of only specific items, to the consumer. Through a smartphone app, a consumer can see what a mobile store stocks, call it to his home or workplace, and open the van door with a swipe on a phone. The shopper’s account is automatically charged for anything pulled off the shelves and at prices comparable to those at stores, Ahmed said. The van driver is not involved in the transaction.
Efficiency and convenience are major advantages, Ahmed said. Customers don’t have to schedule and wait for a delivery slot or create a basket online first. The service is fast. Early trials show it took 15 minutes, on average, from hailing a van to completion of the transaction.
Ahmed believes fresh produce, which many shoppers prefer to pick out themselves, is a natural fit.
The company introduced itself at the CES electronics trade show in Las Vegas in 2018, unveiling a self-driving grocery store prototype. It has since developed three versions, though none are self-driving. The Pharmacy Robomart is now in a pilot phase on the streets of West Hollywood, stocked with about 500 packs of 50 products, including over-the-counter medicine and household and personal care goods.
And coming to the streets of Los Angeles soon will be Grocery Robomart, with fresh fruit and vegetables and refrigerated items, and a ready-to-eat Snacks Robomart.
For now, the business model works thanks to some key partnerships. California van rental company Zeeba is supplying the vehicles. Illinois-based Zebra Technologies and California-based Avery Dennison are supplying the merchandise tracking technology, which performs functions such as letting the Robomart know when it needs to restock at a warehouse hub.
The grocery category could appeal to shoppers who are picky about their produce or have had bad experiences with produce from grocery delivery services, said Marie Yeh, an associate professor of marketing at Loyola University Maryland’s Sellinger School of Business and Management. And it could help shoppers fill in with staples between more complete grocery shopping trips, she said.
The contactless technology is likely to appeal to consumers even after the pandemic, a time when consumers have come to expect such options, she said.
“It’s a really interesting idea,” Yeh said. “I do think it’s innovative. It might meet a niche.”
Ahmed said he and his co-founder came up with the idea for Robomart more than a decade ago when they both worked at consumer goods company Unilever in Pakistan. But the technology for such a venture was not yet well enough developed.
Warschawski, who has been an angel investor for years, said Robomart appealed to him because it represents the type of game-changing idea W Ventures looks to support. The firm typically looks for startups that are either located in Baltimore or willing to move at least some operations to the city.
As with its investment in Robomart, W Ventures typically invests not only cash but also Warschawski communications services in exchange for equity.
In the Baltimore area, Robomart could help serve unmet grocery needs in “food deserts,” typically low-income areas that large grocers often overlook, Warschawski said. It also could be popular around the city’s many colleges, he believes.
Warschawski said he envisions Robomarts eventually will exist for numerous types of retail, such as hardware or apparel. The channel could be opened to retailers who could use it to distribute their own brands or merchandise, he said. One well-known grocer, which he declined to name, already has expressed interest.
“Retailers already have the infrastructure, inventory and personnel stocking goods,” who also could stock Robomart, Warschawski said. They can then reach customers in places where they have no stores.
“We see that this has legs and potential beyond the grocery and ready-to-eat,” Warschawski said.