How Grocery Chains Can Use Technology To Adapt To A Changing Retail Landscape

How Grocery Chains Can Use Technology To Adapt To A Changing Retail Landscape

New technology and shifting consumer habits have forced grocers to evolve their in-store and online experiences for customers. They want mobile payment as an in-store option but also the ability to pay with cash. They want to shop for their groceries in-store but also have a rich online experience available if they don’t have time to stop and shop at the store.

In other words, no matter how they’re shopping, customers want to feel supported.

Retailers must become acquainted with the desires of today’s customers and react appropriately to emerging trends in digital and e-commerce if they want to survive. In this article, we’ll look at some of the ways grocery chains can adapt in this new world of retail and see an example of one chain that is working to give its customers a seamless shopping experience.

Mobile apps should offer convenience and savings.

As mobile usage continues to rise, retailers have been quick to offer native apps that let customers check everything from store locations and hours to loyalty card balances.

Outside of these basic data points, retailers should look to provide convenience and savings tools to customers through native apps. If you’re a grocer and you sell sandwiches inside the store, can a customer order a sandwich on the app and pick it up on their way to work? Does the app show what’s on sale and offer e-coupons that customers can scan from their phone?

Meeting the customers’ needs in this way requires a shift in design thinking. Technology teams should be thinking mobile-first and presenting those designs before desktop versions. In a mobile-first world, if your app doesn’t look good or work on a phone, it likely won’t be used.

Grocers must remain channel-agnostic.

Curbside pickup is expected to be a $35 billion channel by 2020. Grocery delivery is still in its infancy, but usage is expected to explode in the coming years as big-name chains look to stay competitive. That said, these offerings—and by extension, online shopping—don’t replace the in-store experience, which remains the top choice for customers looking to buy groceries.

Retailers should use e-commerce as a mechanism to offer convenience to their customers, but the fact is customers’ needs change from week to week. Some weeks, they want to come into the store and touch the products before they buy them. Other weeks might be busier, thus necessitating curbside pickup or delivery. In either case, the shopping experience should be seamless, and grocers should remain agnostic about which path customers take.

Loyalty programs to incentivize behavior.

One of the surest ways to drive customer behavior is with a loyalty program. It’s the flip side of incentivizing behavior through discounting the price of a product with a sale or coupon. Instead, the price remains the same, but the customer earns points that can be redeemed later.

Fuel points are a common reward currency for grocers. In recent years, we’ve seen higher point levels for different (i.e., more lucrative) product categories like gift cards or prescriptions, which might be worth double or triple the points customers receive on food items.

Another emerging trend is using other ecosystems as points of accumulation. One example is Loblaws, which rolled out its PC Insiders program in 2018 for $99 a year. Members of this program get 20% back in reward points when they buy various products from Loblaw store brands like PC Organics, Black Label, Joe Fresh and Shoppers.

Now that native apps are becoming ubiquitous with retailers of all types, we’re entering a new frontier where grocers can leverage their data to gain more traction with customers.

Gone are the days when retailers had to segment customers into large buckets with hundreds or even thousands of other customers. Today, retailers can tap into the power of technology and data to offer each customer a truly personalized experience. That might mean unique coupons or better product recommendations—whatever incentivizes them to pick your brand.

Leveraging robotics and automation

Customers expect a top-notch experience when they shop in-store. One of the big stumbling blocks to offering that experience is inventory mismanagement. If items on a customer’s list aren’t available, that likely means they’ll have to make another stop somewhere else—or they’ll bail altogether and get all their groceries from a competitor.

This is a huge problem for retailers, too. Out-of-stock items cost retailers an estimated $1 trillion, according to a study from the IHL Group (via Retail Dive). One chain that is prioritizing inventory optimization is Pittsburgh-based food, fuel and pharmacy retailer Giant Eagle.

The company uses an aisle-scanning robot named Tally at three of its locations. Developed by Simbe Robotics, the five-foot-tall robot glides down the aisles and scans shelves for items that need to be restocked. When it finds such an item, Tally alerts a human who can restock the shelf.

Not only has Tally helped get shelves restocked faster—resulting in a better customer experience—but the robot is also a hit with customers, who are constantly taking selfies with it.

As retailers look to improve their in-store experience, this is an example of how to use automation and robotics to work toward those goals in a cost-effective manner.

Takeaways for grocery retailers.

Obviously, the evolution of each retailer will look slightly different from its competitors, but there are two broad takeaways that grocery chains should keep in mind as they move forward:

• In many sectors, but especially grocery, e-commerce is not there to supplant physical.

• The goal should be to offer customers whatever they’re looking for at the moment.

Grocery retailers must focus on bringing offerings to life in the way that customers need at the moment. For right now, that’s mainly in-store, but e-commerce usage will continue to rise.

Retailers must offer customers paths that are convenient, provide value and get them from point A to point B quickly. How can you deliver a solution that meets a customer’s immediate needs? As technology advances, retailers can’t forget to answer this vital question.

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