The future of retail grocery in a digital world

July 7, 2016

The dawn of digital and Omni-channel retailing is just beginning. The future of retail grocery in a digital world highlights the major trends that define this new period of retail and looks at how traditional retailers need to evolve in order to thrive. Customers have a new set of expectations for how they go about their shopping.

Smart retailers are blurring the lines between offline and online, experimenting with virtual stores embedded in physical ones and scannable product codes on subway station walls. They are reimagining stores as distribution centers that can offer customers same-day delivery and they are trying new delivery models, such as drive-through where customers can order items online and then pick them up without having to leave their car.

Digital transformation driving a new change in the retail segment:

Supermarkets are not known for their innovative business models. The last disruptive technology embedded was the implementation of the barcodes 40 years ago. Nowadays, the barcode system still functions but another disruptive technology is digital transformation.

  • Today, marketing and brand building is no longer confined to what happens within the four walls of a store. Social media sites, for instance, offer retailers an opportunity to not only develop their brand image, but engage in real-time customer service.
  • Mobile-based payment systems are approaching critical scale through NFC (near field communications) technology, or mobile wallets. When customers have this technology enabled on their smartphones, they only need a phone, instead of a credit card, to make a purchase.

The future of supermarkets under digital transformation

  • Up-to-date inventory
  • Automatically reorder when inventory fall below a certain point.
  • Get insights in real-time sales statistics and all expiry dates at once.
  • Check all incoming freight with the ordered products to exclude a chance of a wrong delivery.
  • The bottleneck in the supermarket, the check-out, will be solved. In theory, it is possible to walk through a gate where the system identifies all products instantly. Cashiers do not have to scan all items manually anymore, leading to a more efficient way of handling check-outs.
  • Decrease in theft. It will become much harder to steal due to the fact that every product can be monitored.
  • GPS systems for supermarkets. Even in the well-trodden aisles of your favourite store, finding the right items can be a hassle. Now, digital technology can step in and speed up the process.
  • Supermarkets are even taking quick-fire shopping a step further, with pickup services that allow customers to place orders ahead of time, and pick them up at their convenience without having to step foot in-store.

For instance,China’s Shanghai Lotus store has been helping shoppers navigate aisles with its ‘cartsmart’ platform that’s integrated onto shopping carts via tablets. Paired with a free smartphone app, shopping list syncs to your device, guiding you straight to your desired items while highlighting discounts and loyalty point offers.

Moreover, Digital recipe books can provide shoppers with interactive product information and recipe inspiration, a creative way to combat choice paralysis and highlight featured items. This is exactly what was offered to shoppers at a Brazilian supermarket via tablets installed on trolleys. The ‘Recipe Cart’ campaign show shoppers how nearby ingredients could be mixed with mayonnaise to create new meals. According to Hellman’s, the campaign saw mayo sales increase by almost 70%.

The golden rules of supermarket super-tech

Do not make the mistake of throwing digital tech into the aisle without considering the end user experience – apply these principles when integrating new technology solutions, in-store:

Usability first – focus on ease-of-use is key; new technology must be simple, interesting and straight-forward for the end user; the aim is to make shopping easier, not more complicated

Get permission – Clear opt-in and opt-out options for data collection ensures customers don’t leave the store disgruntled. Even with major advantages offered to willing to participate shoppers, not everyone wants to offer up their personal details and shopping habits

Be relevant – Targeted mobile promotions should be exactly this: targeted. Being bombarded by irrelevant deals is annoying, and could deter rather than encourage buying

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