Great Reset in Grocery Retail: Sustainable and Disruptive Trends for Grocery Chains to Follow
The grocery sector is at the cusp of a great reset. To put things in perspective, an October 2021 GoodFirms Survey-Buying Behavior Post Peak COVID Era found that 44.1% of respondents plan to increase their grocery spending in the post-peak covid period.
Groceries and HouseHolds Top the Spending Chart Post-Peak COVID
So what accounts for this growth?
Many factors, but it goes without saying that the pandemic had a phenomenal influence on the growth of this sector as people started cooking at home increasingly, which led to an increase in the demand for groceries. This caused panic buying among shoppers, which resulted in stockouts at retailers, prompting the latter to make significant changes to their supply chains.
Other changes include introducing sustainable and disruptive technologies to online and offline stores. Sustainable technologies such as high-quality UX, big data for demand forecasting and customer analysis, conversational commerce, extended reality, quick commerce, and more are being tried and tested at several online grocery chains.
On the other hand, physical stores are pivoting to offer quite disruptive experiences in the form of in-store robots for staff assistance, smart grocery carts to skip check-out lines, self-driving cars, and smart locks for in-home grocery deliveries, among many other things.
For those not in the know: Sustainable Innovations Vs. Innovative Innovations
Disruptive innovations mean altering and improving a product or service unprecedentedly. This could be done by getting new categories of customers on board, cutting costs, and even bettering the quality of the product or services for the existing market. Also, new technologies and business models are tested, and old technologies are improvised upon.
On the other hand, sustaining innovations is all about improving existing products. It doesn’t have anything to do with new markets, models, or technologies. The sole focus is on developing existing ones.
Here’s a broader take on Sustainable and Disruptive Innovations taking over the grocery space.
Sustainable Trends for Grocery Chains to Follow
Notwithstanding the pandemic, sustainable innovations are pretty practical and easy to execute on almost any meaningful timescale. They don’t call for hardcore technological changes (which is usually the case with disruptive trends) in your current business operations. This means businesses can chart out ambitious plans within the sustainable innovation yardstick any time of the year.
Some of the trends discussed below are already established ones that have become the order of the day, while some are picking up across grocery chains in the U.S.
#1. High-Level UX for Websites and Apps to Make Shopping Experience Immediate & Convenient for Customers
The Baymard research found that as the pandemic crises peaked, new users flocked to online grocery sites and apps. These users started frequenting a few online stores and apps with user-friendly UX for fresh produce weekly. Wondering what makes an ideal UX that incentivizes customers to return to your stores? Here are some tips for app developers and website developers to make the repurchase process easier for customers.
i)Provide Convenient Features for Repeat Visits: Site and app designers should prominently highlight convenience features such as "Buy it Again" and "Based on your Purchases" to make it easier for users to find their regular items and place new orders pronto. If these features are missing, customers might get demoralized and visit other sites that offer them.
Companies at the Forefront:
Both Amazon and Instacart have a “Buy It Again” feature upfront on their mobile apps to help regular customers with their monthly purchases. The benefit this feature provides is obvious as the customer doesn’t have to comb through the entire catalog once again to make repeat purchases.
ii) Focus on Product Listings Over Product Pages: B2C websites and apps should focus more on highlighting product listings over product pages when selling groceries. Unlike customers shopping for non-grocery items, which are more interested in product pages and their details, grocery shoppers are not interested in product page detailing because they want to restock items. This means they are more likely to shop directly from homepages, product lists, and search results, as they can add products to the carts easily from there.
Company at the forefront:
Target-owned Shipt directs frequent customers to its product list pages and not the product pages. Since these are repeat customers and are looking to make repeat purchases, product listing pages of Shipt provide them a complete, comprehensive list of their monthly purchases.
#2. Big Data for Inventory Analysis and Nurturing Customer Loyalty
When running a grocery store, there are thousands of products to manage, of which many get spoiled. With profit margins of grocery stores ranging between 1% to 2%, thorough planning, and robust marketing are essential. Big data facilitates this through customer analytics solutions, ensuring a significant difference to profitability.
Inventory Analysis: Nearly 1.3 billion tonnes of food goes to waste annually globally. If grocery stores utilize Big Data, it can significantly cut down on this number by reducing overstock and ensuring the stores never run out of stock.
Customer Loyalty: Loyalty Program data provides valuable insights into customer preferences and buying behavior, which could provide more targeted marketing and promotions to each customer. The data can also help identify when a customer stops buying from you and instead from a competitor because of a price hike or low-quality issues.
Companies at the Forefront
Wal-Mart, Aldi, and Carrefour are the largest retailers in the U.S, investing heavily in big data. The companies are said to manage massive databases that keep every product purchased by the customer and their prices. In addition to the databases, these companies have put together customers’ entire transaction history, including loyalty schemes. The customers scan their loyalty cards to accumulate more points at every purchase, allowing companies to gain more insights rather than looking at carts in isolation. The rich data collected provides value in the ways mentioned above, such as in inventory analysis and customer loyalty and personalization and pricing.
#3. Conversational Commerce for Improved Customer Experience
This third tip should come as no surprise, but given that 35% of people have bought products like groceries, homecare, and clothes using voice assistants, it bears repeating.
Statista reports that global spending on conversational commerce channels will grow almost sevenfold, amounting to some 290 billion U.S. dollars by 2025.
The increase in voice assistants and other NLP technologies has spurred the use of conversational commerce in the retail space. With 86% of online shoppers looking forward to proactive customer support in the coming years, conversational commerce seems to be the safest bet. According to Field Agent Research Report, “Shopping on the Cutting Edge: Shoppers Attitudes Towards TrailBrazling Retail Technologies,” Amazon Echo owners shopped most commonly in three categories such as 56% pet products, 43% music, and 38% household products.
Company at the forefront
Together with Google Assistant, Walmart offers thousands of items through voice shopping. With a deeply integrated “Easy Reorder” feature, Google Assistant helps customers fill their carts with previously purchased items from Walmart stores or Walmart.com, thereby enabling a highly personalized shopping experience. To make the most of this personalization, customers need to link their Walmart accounts with Google Express.
#4. Quick Commerce for 15-minute Deliveries
Quick commerce or q-commerce is all about speed. In quick commerce, consumers get delivery within one hour of placing an order. The arrangement is generally meant for small orders and not weekly grocery shops. For example, a customer might have run out of flour while baking a cake and might order instant delivery.
Come to think of it, quick commerce has already been used in the takeaway food industry for years together. The retailers use online ordering systems, local warehouses, and delivery teams on two-wheelers to deliver orders quickly. So, it was just a matter of time for quick commerce to become an integral part of the eCommerce industry.
Company at the Forefront
JOKR promises Grocery delivery in 15 minutes or less. And that too without the usual must-haves such as minimum orders or delivery fees. JOKR uses micro-hubs or various storefronts on side streets to make instant deliveries. The company uses data forecasting to familiarize itself with customers' needs and accordingly organize its micro-fulfillment centers for speed.
JOKR promises Grocery delivery in 15 minutes or less (source: relexsolutions)
What’s more, Geofencing and beacons have been around for some time. The technology improves the in-store customer experience as it helps in-store grocery shoppers find the items quickly. Target is at the forefront of using geofencing and Bluetooth beacons to help shoppers check everything on their lists and now moving on to the disruptive innovations in grocery retail.
Disruptive Trends for Grocery Chains to Follow
While the pandemic may have triggered the adoption of ground-breaking technologies, what seems plausible is that these technological changes will be the mainstay of many retail businesses, for they drive customer experiences to a new level. America's leading grocery retail chains such Walmart, Amazon, Kroger, and the like are introducing several bold moves that are sure to turn around the grocery space significantly in the next couple of years. The best part: The technologies can be an answer to labor shortages triggered by great resignation too.
So, let us take a look at these mind-boggling, bold technologies that have started making inroads in the large retail chains in the U.S.
#1. Deploying Robots to Speed Up Supply Chain Ops and Enrich in-Store Experience for Customers
With panic buying peaking during the pandemic, retailers had difficulty keeping store shelves stocked. Even last November’s research by a Fayetteville-based Field Agent in 203 U.S. big-box retail stores revealed the depth of the supply chain problem. The agency found that 57% of the 1,316 aisles at Walmart, Kroger, Target, and Best Buy had less stock than usual. And 16% of the aisles had much less inventory than expected.
The categories examined included canned vegetables, bottled juices, crackers, toilet paper, pet food, laundry detergent, action figures, and dolls.
Enter Walmart’s warehouse and distribution centers robots to organize and optimize freight handling and limit stockouts in store. Besides accelerating supply chain ops, the robots clean up spills in-stores for automated check-outs. So, it won't be surprising that more and more retail giants will be teaming up with Robotic process automation companies in 2022.
Companies at the forefront:
Walmart has been seriously piloting the use of robots for several years now. The company, together with automation company Symbiotic, has launched robots in 25 of its 42 regional distribution centers (DCs) across the U.S. The robots help speed up the movement of products from DCs to stores and help sort, store, retrieve and pack freight onto pallets.
In the company blog, Joe Metzger, executive vice president of supply chain operations at Walmart U.S., said the new system is nothing short of “a game-changer” for Walmart as the robots, besides saving time, will limit out-of-stocks and improve the speed of stocking and unloading.
Brain Corp, a U.S.-based automation company, rolled out a cute, clean-up assisting robot Marty in 172 Giant Food Stores and 325 Stop and Shop locations last January. The googly-eyed robot alerts human employees about spills and even potential hazards in the store and has prevented nearly 40 spills or potential dangers in each store a day.
Googly eyed clean-up assisting robot Marty is popular among kids
Panasonic joined hands with Japanese grocer Lawson for a robotic check-out system. The robot is programmed to automatically scan items before dropping them into a pre-prepared shopping bag. This means the staff won’t have to review and bag groceries as Reji the Robo will do it.
Long story short, powered by robots, be it at warehouses, distribution centers, or store facilities, retail processes are increasingly automated, ensuring more fantastic advances in efficiency, accuracy, and operational consistency.
#2. High-tech Grocery Cart for Skipping the Check-out lines, Real-time Recommendations, and Targeted Promotions
Grocery and convenience stores are readily experimenting with more automated checkout technology to help shoppers skip the checkout lines, reduce theft and offer better inventory management.
You may be familiar with “Just walk Out Technology” used at Amazon Go stores. The Smart Cart technology is a step further from that. Here the tech is fitted within the shopping cart the customer uses, and no hardware installation or reconfiguration of stores is necessary as in the case of Amazon Go stores.
So it would come as no surprise if the shopping cart software technology catches fire across retail grocery chains in the U.S.
Companies at the forefront:
Kroger, the U.S. largest supermarket chain, joined hands with startup firm Caper to take Amazon’s ‘Just Walk Technology’ a notch higher by introducing “KroGO” shopping carts. With smart carts, shoppers have to scan their loyalty cards first and then keep scanning necessary items before placing them in the cart. The screen on the cart provides suggestions as you stroll around the store; if you picked up bread, the screen would suggest items such as a jar of jam or a bar of butter in the next aisle. Plus, it keeps you up to speed about discounts. When shopping is done, shoppers pay directly on the cart, after which a green light pops, signaling shoppers to leave the store.
KroGO high-tech shopping carts from Kroger (source: supermarketnews)
Depending on the smart cart’s performance, Kroger plans to introduce the technology to its 2,750 locations in the future. The technology is far cheaper than Amazon’s automated checkout technology used at 25 Amazon Go locations as the retailers don’t have to think about hardware installation or reconfiguration of their stores. Taking a cue from Kroger, even Amazon has introduced Dash cart to eight Amazon Fresh Grocery stores.
A2Z Smart Technologies has launched Cust2Mate at January’s NRF show 2022 in New York. The smart cart is a better version of smart cart technology as it uses a barcode scanner, in-cart image analysis, and artificial intelligence to bill all the items together. Which means you don’t have to scan the items individually. Also, a touch screen that shows discounts and product suggestions. The technology also comes with anti-fraud systems that minimize the risk of shoplifting.
Further, with the aid of Secure Edge Computing and algorithms, the cart tracks customers’ habits and store patterns at the back-end to be used by the retailer across the entire chain without breaching privacy laws. What’s more, the computer vision takes into account non-bar coded items like fruits and vegetables to ensure their SKUs get updated and prices change. Each cart comes with a tap and pay feature that allows payments through bank card or e-wallet, buy now pay later credit accounts, loyalty points, or even cryptocurrencies. This year, the technology would be launched across grocery stores in New York and New Jersey.
Amazon launched tech-enabled grocery cart Amazon Dash Cart to Amazon Fresh Grocery Stores. The cart uses computer vision algorithms and sensor fusion to vet the items you put in the cart. When customers exit the store, sensors identify the cart and make the payment using your Amazon account.
Dash cart from Amazon (Source: amazon)
The Dash Cart boasts of features such as Alexa Shopping List to check off items, and a coupon scanner to quickly apply store coupons as you shop.
#3. Lightweight Self-driving Unmanned Delivery Vehicles with Wide-Maneuverability Options to Drop Groceries at your Doorstep
Tim Cook, CEO at Apple, once famously said developing a driverless car is the mother of all AI projects. And, now this mother of AI projects has become a reality for large grocery chains across the U.S. Being unmanned means reducing the overall size of the car, making it smaller than the regular car, thereby increasing the maneuverability options of the vehicle. In short, the vehicle can speed up or reduce the speed without worrying about the passenger part.
Going by the growing demand for online groceries makes sense for retail giants to introduce unmanned self-driving vehicles.
Companies at the forefront:
After trying out drone deliveries for several years, Amazon is now looking forward to Scout deliveries. Built in-house, Scout is an electric six-wheeled robot that drives on its own along the sidewalks and streets and opens when it reaches the customers' doorstep.
Amazon Scout for unmanned grocery deliveries (source: mukilteobeacon)
In 2019, six Scout robots delivered packages in Snohomish County of Washington near Amazon HQ. The order placement remains the same. It’s just that the order delivery is made by Scout instead of a driver. The use of robots for delivery purposes during the pandemic is being considered safe compared to human deliveries.
Walmart has teamed up with carmaker Ford and autonomous vehicle platform company Argo AI to launch driverless grocery deliveries to three cities in the U.S., i.e., Miami, Austin, and Washington DC. The pilot project introduced during the last quarter of 2021 initially targeted these three urban cities. Through autonomous self-driving delivery vehicles, the residents received pre-ordered Walmart groceries directly at their doorsteps.
"This collaboration will further our mission to get products to the homes of our customers with unparalleled speed and ease, and in turn, will continue to pave the way for autonomous delivery, " said Tom Ward, senior vice president of last-mile delivery at Walmart US.
For Walmart, this is crucial in the face of Amazon's aggressive delivery timelines that seem impossible to compete with.
#4. In-fridge Grocery Deliveries Using Smart Lock Systems
One of the major concerns with online grocery delivery is that you have to be at home (or at least heading home ) to store your cold and frozen groceries after the order has been left at the doorstep. Customers arrive home to find their cold items spoiled if they are left out for too long under the sun. On top of that, the services aren’t always delivered on time; sometimes the deliveries would arrive early and sometimes late to be convenient, further complicating matters. This is where InHome Delivery Services helps.
Company at the Forefront
After launching apps, driverless vehicles, and robots, Walmart has come up with a unique offering - groceries delivered directly to your refrigerator. Yes, you read that right! The Walmart associate enters your house in your absence with the help of a smart lock and stocks your fridge with all your online ordered items.
Walmart offers in-fridge grocery deliveries in your absence (source: businessinsider)
Referred to as InHome delivery service, it was first launched in 2019 in many markets. It thereafter was made available in 6 million households across the U.S. Today, Walmart plans to expand InHome delivery to reach 30 million U.S. households by the year-end.
There’s no denying that digitalization in the grocery space has always been an ongoing process. Nevertheless, a deluge of sustainable and disruptive innovations sweeping the space has caught the world by surprise. Indeed, these investments and disruptions were invariably waiting to happen; however, the pandemic accelerated these developments to a greater degree. And with most of the leading retailers ready for the great reset, it’s just a matter of time when robots could be a commonplace lining up the aisles, roads, and your porches with inventory and a lot more.
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