Grocery is the industry that provides the best customer experiences within retail, KPMG reported in its latest Global CX Excellence survey. New challenges, like online shopping and pre-ordering, are adding on to traditional ones such as reducing queuing times and managing perishable products. Grocers’ response is to transform and innovate using all the opportunities offered by technology.
Let’s take a look at a few of the most innovative ways grocery retailers are changing their trade, and see what ideas you can borrow to improve your business.
1. Eliminate checkout with grab-and-go concepts
Amazon created a stir when it began testing its automated and checkout-free Go convenience stores. Using the latest developments in machine learning and sensors, these locations allow customers to walk in, pick their items, and be charged automatically when they walked out. Since this concept debuted, more grocers have unveiled similar formats.
Dutch grocery chain Albert Heijn has been testing small-scale cashierless store. Customers can use their credit or debit card to enter the shipping container-sized installations, which are open 24/7. Cameras record the shopper’s movements, while weight sensors detect which items the shopper selects. Customers can then verify their receipt, or simply leave and be charged automatically within milliseconds.
In Brazil, shoppers in the Zaitt convenience stores can pay using facial recognition. Radio Frequency Identification (RFID) technology is used to detect which items the customer picked up. To leave the store, the customer must verify the purchases on a screen. Payment is then detracted from the customer’s account before the doors open for them to exit.
Just by removing the cash register, grocers have eliminated the transactional part of the shopping experience, and transformed the entire customer journey. Imagine exporting the same concept to your stores. How could you make the buying experience simpler? What could you change to enhance the experience and eliminate the transactional parts?
2. Bridge the offline and online experience
Shoppers now expect brick-and-mortar stores to provide them with the same convenience and access to information they get online. The grocery industry has taken these changes in its stride, and is now leading the way in providing customers with the online functionality they desire in a real-world setting.
Chinese e-commerce company JD.com opened a physical grocery chain called 7Fresh that merges the worlds of online and offline in an experience they call “Boundaryless Retail.” Shoppers can use the branded app in the store to scan the barcodes of each item on sale and see product information, including details such as country of origin and nutritional value. The app can even suggest recipes that use the ingredients being browsed. This easy access to information pushes the world of brick-and-mortar closer to the world of e-commerce, where product info is always one click away.
Shoppers’ desire to be more informed about their purchases extends well beyond food retail. Are these shoes made of leather? Is this wardrobe made of sustainable wood? Which kind of charger works with this computer? These are just some of the questions your customers have when shopping in-store. The more you empower your customers to make informed decisions, the easier it will be for them to take the step to buy.
3. Enable voice ordering
Voice-activated shopping is one of the most innovative technologies that are on the rise in the grocery space. Amazon and Google, two of the largest developers of voice-control devices, have each partnered with grocery chains to develop this new way of shopping.
Amazon is using its digital assistant Alexa to enable US-based Amazon Prime members to shop at its grocery chain Whole Foods, while shoppers at Carrefour supermarkets in France can connect through Google smart speakers and mobile devices. Customers assemble their grocery orders by simply saying what they need, such as “Camembert.” With the increasing accuracy and customization that comes from machine learning and artificial intelligence (AI) powered analysis of data from previous orders, the system will know exactly which brand of cheese you prefer. Shoppers can then choose to collect their shopping at their local store, or to have it delivered right to their door.
While most customers are still not ready for voice-activated shopping, the pool of users is steadily growing. As hands-free shopping becomes more commonplace, make sure you can support these new ways of shopping, with an eCommerce website designed for voice commands and support for the most popular voice assistants.
4. Find alternative revenue streams
Retailers have long been relying on revenue sources unrelated to core products. We have seen stores sub-letting space to coffee shops and restaurants for years, and grocery has been no exception. But as grocers deal with the increasing pressure of market competition from larger brands, they’re increasingly turning to unconventional alternative revenue streams to compensate.
U.S. grocery chain Kroger is investing in new areas of business such as Kroger Health, a wellness and nutrition branch built on their in-store and subsidiary pharmacy chains. They have begun introducing free health screening kiosks and in-person consultations for customers, while also partnering with local primary care clinic networks to provide low- to no-cost healthcare for their employees. This investment opens a new source of revenue, but also provides wellness care for employees that can generate savings for the employer in the long run.
Customers can also take advantage of Kroger Personal Finance, which includes credit cards, check cashing, identity theft protection, and partnerships with home mortgage lenders. This initiative to expand grocery’s reach has so far been successful in out-performing targeted goals and will likely continue to grow.
Some non-food retailers are already taking note of these opportunities. Electronics chain Best Buy recently announced their own entry into the health care market, while Japanese retailer Muji has just opened three hotels where guests use the brand’s minimalist houseware products as a part of their stay. In the UAE, aswaaq also manages real estate developments. Is your business currently considering its options?
5. Automate tasks with robots
Grocery stores are giving other retailers and consumers a look at another merchandising revolution that is just beginning to unfold. U.S. grocery retailers Walmart and Albertsons have both recently begun using robots in several stores to perform low-level tasks previously done by human employees
These machines can mop floors, unload trucks, scan boxes, keep track of inventory, and pick items to speed up online orders. The shelf-scanning models use AI in the cloud to analyze data gathered through the machines’ 3D cameras, and understand what’s on the shelves and what needs to be restocked. The automated inventory sorting system then takes this information and prioritizes what needs to be stocked as it sorts new deliveries from the distribution center. The result is higher operational efficiency, and as robots keep the store in its best shape for customers, employees are free to focus on creating positive customer experiences and delivering information and personalized advice.
Non-grocery retailers have already begun implementing robotics technology into their warehouses. Swedish shirtmaker Eton has recently automated its facilities for robotic inventory and order fulfilment, making a better use of its space and increasing productivity. E-commerce giants like Alibaba and Flipkart have maximized the efficiency of their massive distribution centers with hundreds of tireless robots. How could your business benefit from greater automation?
Grocery is a competitive, complex industry. Perhaps because of that, supermarkets are used to taking risks. In recent years, these risks are paying off, and the most daring grocers are finding success in trying out innovative ideas to improve their business.
Why shouldn’t the same be true for the rest of retail?
Even if there are many ways to be an innovator, there is a general formula many successful businesses follow when experimenting with new concepts.
- They look at what businesses in adjacent industries are doing to simplify their business and delight their customers – and try to apply these ideas to their own industry.
- They track their customers’ journey, and create a value proposition that will simplify their life.
- They don’t add new technology just because it exists. Rather, they analyze the solutions available, and implement the ones that suit the business and its goals.
- They dare to try something new. So what if none of your competitors have done it before?
- They’re ready for change, and always keep an eye open toward scaling up to the business they want to be.
The steps may seem straightforward, but the journey to becoming an innovative business (especially a successful one!) can be tough. Do you need help to get there? Contact us: our retail experts can suggest you what technology you need to achieve your business goals.