Grocery Shopping Trends

Date Check Pro and Agilence Present: “Reinventing Grocery | The Timeline to New Normal”

Date Check Pro and Agilence Present: “Reinventing Grocery | The Timeline to New Normal” 1800 945 Natalie Tatum

Pinpoint Software, Inc., provider of the leading expiration date management solution for grocery stores, Date Check Pro, and Agilence, Inc., the leader in data analytics and operational reporting, today announced their upcoming webinar “Reinventing Grocery | The Timeline to the New Normal” that will take a closer look at the emerging trends across the grocery industry post-COVID 19. This webinar will be held via GoToWebinar on April 28th from 2:00 to 3:00 ET. To register and reserve your spot, sign up here.

With a combined 40+ years of grocery retail experience this webinar will be hosted by Pedro Ramos, Vice President of Sales for Agilence, Inc., and Andrew Hoeft, CEO & Founder of Pinpoint Software, Inc. 

This new co-produced webinar delivers grocers a data-driven perspective as permanent disruption unfurls within the grocery retail experience. It will cover the role cleanliness and safety protocols will arise as a key driver to sales, how former “slow moving” categories may be worth further investment, the role your associates play in future customer acquisition and retention initiatives, why a familiar business adjective to the grocery industry may emerge as a direct competitor, The DNA of the New Shopper, and more. 

“We know what COVID-19 did to grocery operations in the present; surges in online and curbside pickup orders, critical focus on cleanliness and safety, and larger, less frequent grocery orders. But what about the longer term impacts? We are excited to have teamed up with Agilence to glean knowledge from our collective data to help guide as well as predict where our industry is headed over the next several months and years.” says Andrew Hoeft, CEO at Pinpoint.

“This webinar is a natural extension of our partnership with the team over at Pinpoint Software,” said Pedro Ramos, VP of Sales at Agilence. “Both of us have strong ties to the grocery industry and we are seeing the frontline impact of COVID-19 on grocers of all sizes. Our plan is to present grocery professionals with data-driven concepts that they can incorporate into their business today, tomorrow or in the near future.”  

Grocers and grocery industry professionals of all titles such as operations, category management, merchandising, loss prevention and marketing leaders looking to better understand the future of the grocery industry following the coronavirus outbreak are encouraged to attend the webinar. 

For more information on Date Check Pro, visit datecheckpro.com. Pinpoint Software, the organization behind Date Check Pro, is a venture-backed technology company, located in Madison, WI, dedicated to improving operational efficiencies through software. Their products also include Taskle, and Stop Waste Together, a non-profit initiative aimed at reducing food waste.
For more information on Agilence, visit agilenceinc.com. Agilence is the industry leader in data analytics & reporting for retail, restaurant, grocery  and convenience organizations. Agilence develops a highly flexible and powerful cloud-based analytics & reporting platform that provides organizations with a complete view of their business, empowering them to make informed decisions faster, increase sales, and eliminate losses. Agilence, Inc. is headquartered in Greater Philadelphia.

 

How Shopper Behavior Has Changed During COVID-19

How Shopper Behavior Has Changed During COVID-19 1644 1085 Natalie Tatum

In a recent report from Acosta, researchers found that two-thirds of U.S. shoppers said they have changed their grocery shopping habits in response to the COVID-19 outbreak. The report, Grocery Shopping during the COVID-19 Pandemic, dives into how shopper behaviors have changed in recent weeks following stay-at-home warnings and the panic-buying that’s associated with the coronavirus outbreak. To best understand this information, let’s take a look back at grocery shopper behavior in 2019. 

In 2019, one of the biggest trends in grocery was the shift in dietary needs. “One third of households have at least one family member following a non-medically prescribed diet, and this rate is higher for younger generations,” said Leslie G Sarasin, President and CEO of FMI. This shift changed the grocery landscape by influencing grocers to expand their natural and dietary restriction sections in the store and helped introduce new products on the shelves that fit the new needs of their shoppers. The other leading trend in 2019 was online grocery shopping, with  roughly 43% of shoppers got their groceries online, and visited the store 1.7 times per week, higher compared to the national average of 1.6 trips per week 

Both of these trends were expected to grow in 2020, but nobody could have predicted that a global pandemic would be the reason that both trends went off the charts. 

One of the most grappling statistics of the report is that two-thirds of U.S. shoppers said that they have changed their grocery shopping habits in response to the coronavirus outbreak. Comparing March 20-29 to March 6-12, shoppers in all age groups reported making significant changes in the way they get their groceries. The leading age group making changes was the Gen Z & Millennial shopper group, with 68% of those surveyed changing habits. They were followed closely by Boomer shoppers at 64%, and Gen X followed them at 64%. 

In addition to changing their grocery shopping habits, 72% of those surveyed shared that they have been implementing new behaviors like social distancing, a trend even some grocers have picked up on with the introduction of one way aisles. 70% of individuals surveyed said they have been avoiding public areas, and 64% said they have been sheltering in place and at home. 

Acosta also reported that top categories are changing, recording that 44% of shoppers are buying canned foods and shelf stable foods like rice, pasta, and beans, and more paper products. 36% of shoppers are buying more household cleaners and disinfectants and 36% are buying bottled water. 

Unsurprisingly, 9 out of 10 shoppers experienced out-of-stocks during their most recent grocery trip, with 47% of shoppers saying that they were able to find some sort of substitute for items that were unavailable. 

Acosta concluded their report with helpful tips for retailers and manufacturers during this difficult time, including suggestions on implementing new solutions that reduce the risk of shopper and employee transmission of the virus with shields, re-establishing inventory of core items, and providing creative, budget friendly meal solutions in store and online. 

For more information on the report and best practices during COVID-19, click here

 

What We Learned from the Grocery Edition of the 2020 Retailer Preference Index

What We Learned from the Grocery Edition of the 2020 Retailer Preference Index 1280 720 Natalie Tatum

In the third annual Retailer Preference Index (RPI) for the U.S. grocery stores, Dunhumby  looks at the $700 billion grocery industry to answer what drives customer preference for grocery retailers, which retailers are winning and losing and why, and what grocery retailers can do to improve performance and win more trips.

Dunhumby provides a new perspective on the emotional connection behind what customers think and feel and why they shop at certain stores, all with the goals of understanding how these perceptions affect financial performance and helping retailers better understand their customers. 

Here are the most impactful things we learned from the 2020 Grocery Edition of the Retailer Preference Index. 

Customer Needs: 

While a few pillars of retail move spots in customers hearts and wallets, the price pillar is undoubtedly the most important pillar for shoppers of almost all incomes. Behind price comes the quality of product freshness and accessibility to private brands, prepared goods, product variety, the store experience, customer service, and the look and feel of the store. 

After price and quality comes digital, with easy ways to shop online or with a mobile app and the usefulness of the information provided. Operations follows with managing out of stocks, price consistency, stocking the right products and providing clean stores. 

Convenience, coming fifth in order of importance, represents having the right variety of products and convenient locations that allow shoppers to buy everything they need at one store. Speed both in efficiency of shopping and checkout comes in sixth place, and discounts and rewards including the ease of redeeming discounts comes last in seventh place.  

Top Grocery Stores:

The following grocers have a value core that is most aligned to their customer’s needs, delivering them in a way that is most relevant to their emotional connection and financial situations:

  1. H-E-B 
  2. Trader Joes 
  3. Amazon
  4. Market Basket 
  5. Wegmans 
  6. Costco
  7. Aldi 
  8. Sam’s Club 
  9. Walmart 
  10. Publix 
  11. WinCo Foods 
  12. Fresh Thyme 
  13. Sprouts 
  14. ShopRite

When asked what word came to mind when these retailers were mentioned, customers said convenient, cheaper, fresh, good, bulk, and great. 

Changing Value Consciousness: 

Following the last recession in the late 2010’s, consumers based their purchase decisions on price more than any other pillar of retail. Shoppers bought more sale items and got used to buying at lower prices. Shoppers also spent less on food, not only by seeking lower prices, but by buying less food.  

Shoppers also ate out less and cooked more meals at home and made bigger strides in curbing their impulse purchasing tendencies. They brought more private label brands, leading to an increase of shopping at more club warehouses, super centers, dollar stores and limited assortment stores. 

The “Fun” Factor:

With the hype of micro-experiences only on the rise, it’s no surprise that more shoppers are embracing the “fun” factor of getting their groceries. Leaders in the fun factor include Trader Joe’s, Fresh Thyme, and The Fresh Market. 

The “Fun” Factor is typically associated with grocers who capture a low share of their customer’s grocery wallet and  who provide a limited set of categories and products. Their limited categories allow them to deliver a well-aligned value core and focused innovation, but limit how much the customer will and can buy at a given location. 

How Traditional Retailers Can Win:

With big box stores and retailers topping the list of favorite grocers, how can traditional, regional retailers win? The equation is simple. 

Strong private brand + highly relevant assortment + highly relevant promotions = success

Quality is driven not so much in store experience, but more so through an assortment that meets their needs and allows shoppers to get all of the right products at a convenient location. While Walmart, Aldi and Dollar General have strong competitive advantages in price perception, private brands give traditional, regional grocers a resource to compete with. 

While they tend to trail in price advantage, traditional, regional grocers have a clear competitive advantage in promotion, information, and assortment relevance. When surveyed, discounts and rewards scored most important for those in late retirement and those that are empty nesters, but the numbers were high all across the board with little variation segment to segment. 

The Retailer Preference Index provides sixty pages of valuable information for grocers, retailers, and shoppers alike. To download the report, visit here.

Large Format vs. Small Format – What is Winning in Grocery?

Large Format vs. Small Format – What is Winning in Grocery? 720 480 Andrew Hoeft

If you’ve been keeping up with grocery news (here are our favorite places to do so), you’ve likely seen a trend emerging in stories about the format of grocery stores. We’re experiencing a large scale shift in retail as a whole, and it’s only natural that the grocery industry would follow suit.

Traditional retail size and formats aren’t cutting it anymore. We’re seeing the demise of storied department stores like Boston Store and Shopko as retail goes digital and consumers rely on brick-and-mortar retail more for experience than for hefty levels of inventory. It’s simply easier to outfit an online shop with every item that your company carries and shipping directly to customers as-needed  vs. shipping out to stores and hoping items will sell out on your shelves.

You can see that trend emerging in grocery stores as well. Small format stores are becoming a more common occurrence, and we’re wondering as much as anyone – are these curated spaces the grocery stores of the future?

Small format grocery store benefits

The upsides of a smaller format grocery store make sense in this retail environment. They’re great in city neighborhoods where the population is dense and the options for food are scarce. Food deserts can be remedied with small format stores in these locations, and keep residents from having to travel for miles for their weekly shop. 

In addition, shopper behavior has changed drastically over the last 10 or so years. Online click and collect and grocery delivery are becoming popular, and when shoppers are heading to a brick-and-mortar store, they’re coming in more frequently for less items. They’re either stocking up for the week, or purchasing only enough ingredients to make dinner that night.

We’d be remiss to neglect mentioning how small format grocery stores can help with grocery’s narrow margins too. All of the overhead that comes from managing a superstore can be minimized when opting for smaller space.

Who is experimenting with small format grocery stores?

  • Kroger – the grocery giant is dipping its toes into the water with their Kroger Express formats, conveniently located inside a Walgreens location. Their first test is located in northern Kentucky, and offers more than 2,000 items.
  • Whole Foods – Whole Foods Market Daily Shop is a grab-and-go version of a small format grocery store that the health-conscious retailer is testing in New York.
  • Sendik’s – The Milwaukee-based grocer has been experimenting with pairing their small format store with a gas station to offer more convenience to the customer. So far, the test has been highly successful.
  • Giant Foods – Ironically, Giant Foods is getting in on the small format game. They’ve opened a 9,500 square foot Giant Heirloom Market in Philadelphia.
  • Hy-Vee is scaling down with 10,000 square foot Hy-Vee Fast & Fresh locations.

Small format grocery store challenges

Though these stores are definitely bringing something to the table for grocery retail (and adapting to current shopper behavior), these experiments haven’t all been successful. In Austin, Texas, in.gredients, a package-free micro-grocery store closed because of rising rents, and Plenty Grocery & Deli, a Chicago-based store, closed in April 2019.

One Grocery Dive article said it best, “Offering a limited range of products has a quaint appeal, but operating costs in dense areas can be high and consumers looking for a full shop may still opt for a traditional supermarket.”

Smaller format stores are working as a separate offering for many large, well-known retailers, but they do face unique challenges in the shifting retail landscape. You’ll likely see more stories about small grocery store format, as more retailers jump into the ring and try out their chances.

How Plant-Based Products affect Expired Loss

How Plant-Based Products affect Expired Loss 720 480 Andrew Hoeft

With every new grocery trend comes a necessary round of conversations:

“Who will our distributors be?”

“How are we going to market this product category?”

“Where should it be merchandised in our stores?”

There’s one question that is usually left out of these conversations, but could have the largest impact on your bottom line:

“How will this new product category affect our expired loss?”

Through our conversations with grocers, we’ve seen this question missed time and again, and, as your resident expiration date management experts, it’s our job to make you consider every aspect of your inventory’s expiration potential.

The latest category to fall prey to this oversight is plant-based products. Since they joined the mainstream food scene, they’ve exploded, entering nearly every category from the meat counter to the dairy aisle. Grocers like you are jumping at the chance to stock these products – they’ve seen the data, and they know carrying plant-based products will help their bottom line. 

Just to give you a taste of the trend: “Sales were up 31.3% overall between 2017 and 2019, to a grand total of nearly $4.5 billion in revenue,” according to the Good Food Institute and the Plant Based Foods Association.

However, like every new product category, plant-based products will have some effect on your expired loss metrics – both positive and negative.

How plant-based products affect expired loss

First, the good news: plant-based foods simply don’t pose as much of a risk to shoppers past their expiration date because they are not made from animal products. For this reason, they have longer shelf lives in your store.

Now, here’s where it gets complicated. Longer shelf life does not necessarily mean you’ll have better expired loss stats.

With any new category, including plant-based products, you’re still establishing a customer base. Even though sales are rising, and plant-based products are quickly becoming a must-have for grocers, there is still education that needs to take place to get shoppers on board.

If the products that you stock don’t move as quickly as you’d anticipated, and you aren’t keeping track of your expiration dates proactively, you may end up with expired plant-based products on your shelves. And your expired loss numbers will go up, up, up…

Tips to mitigate risk of expired loss

There are a few key best practices to avoid this issue with any new category:

  • Carefully track your plant-based product movement metrics in order to make accurate inventory purchases in the future. Start small, and gauge your shoppers’ interest in the category before wasting funds on large orders that may expire before they can be purchased.
  • Educate your customers on food safety practices for plant-based products. What does a plant-based product smell like, look like, taste like if it’s out of date? Storing plant-based products effectively is another topic that you may want to cover.
  • Proactively track your expiration dates so that you can mark down close dated items before they expire and help move them. There are many forms of expiration date management, but a technology-focused process that notifies you when an item in your inventory is about to expire is the best way to avoid not only a shopper coming into contact with an expired item, but an increase in your store’s expired loss.

2020 Grocery Bonus Trend: Plant-Based Products

2020 Grocery Bonus Trend: Plant-Based Products 720 480 Andrew Hoeft

We’re a few weeks into 2020, and there are already clear indicators that many of the trends we predicted are coming to life. We’re spending the week at the National Retail Federation (NRF) Big Show, and these concepts are being mentioned again and again by top retail insiders in their industry-leading sessions. We’ll be bringing all of the latest information to you soon, but we couldn’t resist filling you in on one 2020 grocery trend that’s making waves already this year: plant-based products.

It’s no secret that plant-based products have been around for awhile – vegetarianism and even veganism have become expected dietary restrictions throughout the United States. Those who practice these diets are no longer in the minority, and grocery stores have needed to pay attention to their needs and desires while stocking their shelves in order to maintain their consumer base.

However, plant-based products have exploded over the past five or so years, and they’re poised to have an even bigger impact on the grocery space in 2020 and beyond.

 

What you need to know about plant-based products

Grocers have needed to cater to vegetarian and vegan customers in the past to avoid losing their business, but today plant-based products are more than just a “nice to have” in the grocery world. They’re a necessity for any grocer who wants to position themselves as forward thinking. They’re a growing category.

Plant-based products represent an entirely new opportunity for revenue in an industry with notoriously thin margins.

At this stage in the game, plant-based products have entered just about every category within a grocery store, from the dairy aisle and the meat counter to the seafood section. It’s no longer abnormal for a customer to see a package of plant-based burgers nestled in amongst typical beef patties.

In fact, plant-based meat alternatives may be the most popular form of plant-based products. Companies like Beyond Burger and Impossible Burger have entered the mainstream conversation due to partnerships with well known brands like Burger King and Qdoba. These fast food mainstays have tied their success to the plant-based movement, and are advertising these options heavily to consumers. They aren’t just targeting the vegetarian and vegan crowd either – they’re telling die-hard carnivores that their plant-based options taste just as good as their meat-focused menu items – and that they could be a healthier alternative for those who are looking to cut down on calories and cholesterol.

Tyson too is investing in plant-based protein. The poultry leader launched vegetarian nuggets in June.

These companies have good reason to believe that plant-based is the category of the future. “U.S. retail sales of plant-based foods grew 11.3% in the past year,” according to the Good Food Institute and the Plant Based Foods Association. Sales were up 31.3% overall between 2017 and 2019, to a grand total of nearly $4.5 billion in revenue.

Here’s one more stat to consider: $1.9 billion was spent on plant-based milks in the United States over the past year, which made milk the “top-selling plant-based category”. These milks include varieties like almond, soy, and oat milks, and may have been spurred by the popularity of using these plant-based, wellness-focused alternatives in beverages like coffee and tea. Grocers have started merchandising these items in the traditional dairy case, which gives shoppers who may not normally come into contact with plant-based products a chance to, in a fit of curiosity, add them to their cart.

The numbers are convincing, and experts predict that the trend will only continue to grow in the coming decade. As a grocer, you can learn a few lessons about how to effectively integrate plant-based products into your inventory from your peers.

 

What is the best way to capitalize on the plant-based products trend in grocery?

The top technique for making plant-based products work in your store is to make them feel like they are an intentional addition to your offerings, not just an extra section in your store that is only shopped by those who have dietary restrictions or moral reasons for not eating meat or dairy products. To fully integrate these products, you need to place them near their meat and dairy counterparts

Grocery stores across the country are moving away from having a specific “organic” or “vegetarian” section. Instead, they are putting these alternative products directly in their cases, Beyond Burger next to ground chuck, and almond milk next to the 1% and chocolate cow milk.

The main impetus for this adjustment is that, instead of organizing a grocery store in a way that makes sense on the backend to a grocer (inventory categories placed next to each other in a very structured fashion), grocers are beginning to layout their stores to suit the customer. They are considering the way consumers shop, and placing items that go together in the customer’s mind next to each other in the store. If a customer has “milk” on their shopping lists for example, it doesn’t matter if they’re looking for soy milk or dairy milk – they should be able to go to the same spot and pick it up, not head to a separate vegetarian section for their shopping. Reducing the friction around these plant-based products makes them a more natural purchase for any shopper, not just those who adhere to a vegetarian or vegan diet.

Call this idea a trend within a trend: negating marketing material and labels that categorize a plant-based product as “vegan” or “vegetarian” normalizes it for the mainstream shopper. Instead of feeling like they can’t purchase a product because they don’t fall into one of those two categories, they may be able to tap into their curiosity or health-focused mindset and choose a new plant-based alternative. 

There are a number of grocery stores who are successfully implementing the tips above, but there are a few who are going above and beyond to actually create plant-based products for their in-store brands. Trader Joe’s and Whole Foods top the list, which may not be entirely surprising to based on their shopper demographics. Wegman’s is also leading the way in private label plant-based products, showing that the traditional grocery store can also get in on this 2020 trend.

 

Pros and cons of plant-based products in your store

Plant-based is a major 2020 trend, but it’s not magic – there may still be some roadblocks that can prevent these products from becoming a success in your store.

First and foremost, though big name brands are doing a lot of plant-based advertising for you there is still some hesitation with products such as plant-based cheese – and even those meat alternatives we mentioned earlier. Carrying plant-based products requires some education of your current shopper, informing them of what options are available and perhaps creating a few testing stations in your stores to introduce them to the product.

You’ll also be tasked with finding room in your limited inventory space for these new plant-based products. As we all know, there is a definite level of negotiation between grocers and brands when it comes to where products are merchandised, and adding in an entirely new category could cause some friction with brands who haven’t gone down this route yet.

Although there are challenges at stake, making an effort to carry and promote plant-based products in your store has some major benefits as well. The financial upsides of adding in a popular new category are just one reason why you should consider jumping on board with this trend.

When you carry meat and dairy alternatives in your store, you’re positioning yourself in a positive light. You are telling your shoppers that you are wellness-focused, that you understand the health benefits that plant-based products might bring. You also show that you are invested in your shoppers, no matter their dietary restrictions or eating habits. You want to offer them the food that they enjoy, that they feel good about eating, and you want to expose others to that same opportunity. Finally, you care about the environment. Plant-based products cut down on the carbon emissions caused by traditional dairy and meat processing, and shoppers are savvy about that fact. By promoting other options, you’re giving people a chance to exercise their moral compass, and feel good about what they’re purchasing.

This year, plant-based products are ruling the grocery aisles and the halls of NRF’s Big Show. We can’t get away from this topic, and the shopping data tells a clear story of why. To point your stores in the right direction, take a few tips from your peers, weigh your options, and then dive in feet first with a few plant-based offerings. Give your shoppers a chance to show you whether they are interested or not before writing off this trend entirely. You might just be surprised by which category has the largest impact on your P&L come 2021.

 

2020 Grocery Wellness Initiatives to Delight Your Customers

2020 Grocery Wellness Initiatives to Delight Your Customers 720 480 Andrew Hoeft

Wellness is the buzzword of the month around this time of year as people set goals to hit the gym, eat healthier, and focus on their mental health. The new year gives us each an opportunity to imagine a better version of ourselves and put plans into place to make that happen. As a grocer, you’re perfectly primed to help your customers achieve their goals instead of giving up on them by February like 80% of the population.

 

Today’s customer sees their grocery store as a wellness resource, not just a place to stock up on ingredients or grab a quick carton of milk. According to FMI, 55% of consumers see their grocery store as a health ally. They’re relying on the place that is selling them food to help them make healthy choices while cooking satisfying meals. For grocers, this is a huge boon and a way to increase tight industry margins while increasing customer satisfaction and building a brand loyal following.

 

Wellness Initiatives to Start in Your Grocery Store in 2020

We have a few helpful tips to kickoff the new year right with wellness initiatives in your grocery store.

Position your store as an expert

First and foremost, your customers are not going to trust your wellness expertise unless you give them a reason to. Without a significant effort to adjust your branding, content, and in-store signage to reflect a wellness focus, your shoppers won’t think of you as their health ally. Take a note from Giant Foods who has created a podcast to share relevant health and nutritional information with their shoppers. They’re using an innovative platform to position themselves as health resources, and creating that relationship with their customers.

Offer an in-store dietitian as a resource

Dietitians have been working in grocery stores for decades, but highlighting your existing program or hiring a new member of the team to provide dietary consulting to your shoppers can give you a leg up in 2020. Customers will be thrilled to know that they can ask a registered dietitian questions about the products that they’re buying, and they’ll be well on their way to hitting their wellness goals.

Add nutrition attributes to your aisles

In-store signage and education can go a long way in showing your customers that you care about their health and want to point them in the right direction when it comes to purchasing food. Raley’s is leading the way in this area, posting nutrition attributes as in-store signage that literally points customers to gluten-free, low sugar, and low calorie options.

Utilize NGA’s wellness activation kit

If you’re still feeling like you don’t know where to begin with grocery store wellness, tap your association resource, NGA. The National Grocers Association has assembled a wellness activation kit that can help you get your initiatives off the ground and into your customer’s frame of reference.

This year, think outside of the box with your typical wellness marketing campaign. Implement a few engaging initiatives to activate your customers and position yourself as a health resource and ally to win in 2020.

 

2020 Grocery Trends: Robotics

2020 Grocery Trends: Robotics 720 561 Andrew Hoeft

The “future of retail” holds a lot of promise – and a lot of promises. During annual conferences and think tanks, the possibilities of a grocery industry dictated by artificial intelligence, robotics, and detailed consumer insights are regularly discussed with fervor. Entire presentations are spent talking through what it could be like to shop for groceries in the future.

There’s just one problem. The future is now.

Grocers aren’t waiting for retail-focused technology to emerge before testing new innovations in their stores, and, frankly, they can’t afford to. Retail giants are surging ahead, and making technology a non-negotiable for grocers everywhere. 

Robotics are just one way in which grocers are showcasing their willingness to adapt to the current retail climate.

 

Who is using robots in their grocery stores?

The most notable use of robotics in the grocery industry thus far is Marty the robot. Marty is an in-store robot that wanders the aisles of Ahold Delhaize’s Stop & Shop and Giant Food Stores. He’s a tall, rectangular figure on wheels with large googly eyes and a small grin – meant to give off a human-like appearance and put surprised shoppers at ease. Marty’s main skill is to alert store managers to hazards like spills or items dropped on the floor. The grocer says that Marty allows them to cut down on employee hours and focus in on the smaller things that can take up so much of a store associate’s day like fallen price tags.

An article by New Food Economy said, “Ahold Delhaize has explicitly told shareholders that the company is investing in automation and artificial intelligence to supplement or even replace human labor.”

 

Walmart has also gotten into the robotics game, though at a far less intrusive level. The retail giant has introduced automatic floor scrubbing robots into some of their brick and mortar locations across the United States.

 

Pros and cons of robotics in grocery stores

Robotics is one of the more controversial 2020 trends. It’s not all benefits and value adds with this concept. 

Adding robots into your store can position you as “worker-averse”, and quotes like the one from above about reducing employee hours don’t help. A recent Washington Post article says, “As Walmart turns to robots, it’s the human workers who feel like machines.” 

Technology can be a great thing in retail, but it also has the potential to remove that undeniable human factor that is such a keystone of the traditional grocery experience. Today’s robots are industrial, creepy, and cold, and, even if they are given large eyes and a smile, they are not easily integrated into a grocery store that is determined to provide that neighborly feel.

It seems as though the large investment that it takes to integrate robotics in a grocery store have not paid off just yet. There aren’t many successful use cases of using these technological innovations – so far, they haven’t been able to do much for grocers other than alert them to things that store associates will still need to take care of. One Ahold Delhaize worker has been quoted as calling Marty, “a glorified Roomba.

There are some potential benefits to robotics in the grocery industry when the technology catches up. Adding robots into your store that can effectively take care of smaller concerns can allow your employees to refocus on meaningful tasks like customer service and that oh-so-important person-to-person interaction. Saying “yes” to robots can also position your business as tech-forward and innovative, and add an element of modernity for your customers.

All this is to say that robotics definitely have a place in the grocery industry, and it’s likely that we’ll see more iterations on this concept in 2020. However, it may be a few more years before they proliferate throughout the country, and become a normal sight in the contemporary grocery store.

 

2020 Grocery Trends: Grocery Delivery

2020 Grocery Trends: Grocery Delivery 720 480 Andrew Hoeft

Consumers are used to a certain level of convenience. Online shopping and quick delivery rules the retail industry today, and consumers don’t even have to leave their beds in order to complete their weekly errands. Just a few taps of a button, and their goods will arrive on their doorstep. 

Grocery delivery was the logical next step for this retail environment. Grocery shopping is one errand that many people need to complete weekly, stocking up on necessities like milk, bread, coffee, eggs, or butter. It’s not a rare task, and, to be frank, it’s not a task that many people enjoy doing today.

If a modern grocery store doesn’t offer an elevated experience, it can be a drag for shoppers to come in each and every week and purchase what they need. It can feel monotonous, inconvenient, and even frustrating to shop in a grocery store that hasn’t stepped into the new world of experience-focused retail.

So, what do you give a shopper who doesn’t want to shop in your store? The option to have their groceries delivered right to their home. Et voila, grocery delivery.

 

The current state of grocery delivery

Grocery delivery is a service wherein a shopper orders their items online, and they are delivered right to their home. It eliminates the need to head to the store for a weekly shop, or an impulse purchase.

The concept itself was slow to catch on in the United States compared to other countries around the world. In South Korea, 20% of consumers buy groceries online, and in both the United Kingdom and Japan, 7.5% of consumers do the same.

While grocery delivery has become quite common around the world, even becoming a preferred method for many shoppers, American consumers seem to have waited to judge its success before jumping in. Now, they’ve capitulated with full force.

Coresight recently conducted a study that showed 36.8% of internet-using adults polled bought groceries online in the previous 12 months, up from 23.1% in their 2018 study. That equates to approximately 93 million online grocery purchases using U.S. Census data. 

Of interest to you: the majority of these purchases came from retailers like Walmart and Target, followed by Kroger.

If you take into account the average American consumer’s buying power, it’s clear that grocery delivery’s popularity could become a major income stream for grocers across the country.

And they’ll need it. Amazon has dipped its toe into the water of the grocery industry over the past few years, and grocers need to adapt and innovate in order to stay competitive with technology-savvy shoppers.

 

Who is doing grocery delivery well?

As mentioned above there are a few retailers who are dominating the grocery delivery category, and they all happen to be major grocery industry leaders. Though many independent grocers offer delivery, the majority of purchases take place through Walmart, Target, and Kroger.

According to Supermarket News, “Walmart and Kroger have more than doubled their online grocery shopper numbers over the past 12 months, adding about 20 million and 6 million online customers, respectively.”

Those numbers are staggering in light of grocery delivery’s relatively recent popularity in the United States. Now that it’s caught on with the average shopper, it won’t be going away anytime soon, and consumers will begin to expect a delivery option from even the most independent grocer.

If you’re reading this as a small, independent grocer, you may have just let out a groan. So many grocery industry trends feel like they leave out “the little guy”, the hometown grocer who actually provides that individualized experience that customers say they crave. You feel like you’re doing everything right, but that innovations are leaving you and your business in the dust.

Not grocery delivery.

Because of its near ubiquitous adoption across the country, startups have popped up to assist grocers with executing on a grocery delivery strategy. Third party delivery systems like Shipt and Instacart exist, and they’re here to help your business implement grocery delivery without a large operation or logistical nightmare. An official partnership will still be an investment, but one well worth taking on if you want to remain relevant in today’s retail atmosphere.

 

Pros and cons of grocery delivery

Every trend has its upsides and its downsides, and it’s up to you, as a grocer, to decide what makes the most sense for your business. But, you don’t have to do it alone. We’re here to help you break it down.

Let’s start with the benefits, or the “pros” of grocery delivery, shall we?

First and foremost, the convenience factor. Customers are no longer patient. They no longer are forced to take part in activities that they don’t enjoy, that don’t add value to their lives, that don’t bring them joy. Grocery shopping can easily fall into the category of “things I don’t want to do”, therefore giving your store a negative association simply for existing. 

When customers aren’t given the option to forgo traditional means of retail, they can become frustrated, and, instead of relishing in the experience you’ve created in your store, instead of finding the joy in the person-to-person interactions you encourage with your store associates, they’ll find themselves resenting the fact that they have to leave their homes to shop each and every week. When they’re strapped for time, or strapped for energy, they want to be able to turn to a convenient option. Grocery delivery provides that to them.

More than convenience, grocery delivery is also a trending concept in the United States market. It’s gaining momentum quickly, and we would be remiss to say that it could be important for your business to jump on the trend right now while it’s hot. If you want your grocery stores to be considered thought leaders, innovators, or customer service-focused, you’ll want to look into the bevy of ways that you can offer a grocery delivery service. Even if you work with a third party delivery system, you’ll find that your customers will view you in a whole new light.

One more bonus to grocery delivery: it’s all done digitally, which allows you to gather new insights on your shoppers. Users must typically opt in to the service, and provide contact information like an email address or a phone number. This gives you a new way to contact them with promotions and information that could be relevant to them. While your usual access to a customer may be through in-person interaction and traditional advertising, implementing a grocery delivery service with a digital platform could allow you to push deals directly to your customers through their device or through the contact information that they provide. You’ll also be able to gain insights from their purchases through your delivery service to make informed inventory and advertising decisions.

Now for the negative side of grocery delivery. Though this concept is fast-growing  in America, it does have its downsides, and it’s imperative that you evaluate your individual business situation before making any large scale operational decisions.

The first piece that we have to point out about grocery delivery is that it’s not easily accessible for every grocer. Large retailers like Walmart, Target, and Kroger have success with their grocery delivery services because they have the resources (financial, operational, and personnel) to handle the complicated logistics involved with grocery delivery. 

As an independent grocer, you’ll likely have to utilize a third party vendor relationship in order to implement grocery delivery. That doesn’t have to be a bad thing for your business, as these vendors already have thorough experience with grocery delivery. However, it means that you don’t have direct control over what happens to your product as it’s being delivered from point A to point B. You won’t have direct control over the experience your customers are being provided. When you don’t have an in-house service, you simply cannot control the many variables that come into play with grocery delivery, and that could mean hardship for your business.

Finally, let’s talk financials. Grocery delivery may be cost effective for your customer, but it’s a major investment for you if you try to build your own internal operational structure. Hiring the personnel needed to have an effective grocery delivery service will cost you cash, and implementing the processes and procedures needed to make sure your customer has an elevated experience will cost time and money. The financial stability (and cash on hand) needed to run a DIY grocery delivery service for your grocery store is significant, and it’s something that definitely needs to be considered.

Grocery delivery is one of the hottest trends in this industry, and perhaps the one that is most achievable, even for independent grocers. Though it’s been around for a few years now in the United States, now is the time to hop on the trend because it has been proven to be a success with so many retailers. Consider your business situation and see if there is room in your strategic plan and your budget for a grocery delivery system. It could be a piece of the puzzle that skyrockets your business in 2020.

 

2020 Grocery Trends: Artificial Intelligence

2020 Grocery Trends: Artificial Intelligence 720 480 Andrew Hoeft

When we attended the National Retail Federation (NRF) Big Show earlier this year, artificial intelligence, also known as AI, was a major topic of conversation. Every session that discussed the technological advances that were on the horizon for the retail industry included a hefty examination of AI. 

AI holds a lot of promise for the retail industry. From the ability to accurately predict a shopper’s behavior using data from their previous transactions to being able to serve personalized ads to shoppers in-store as they’re wandering the aisles. However, many grocers have been hesitant to make the significant investment, as the technology often requires an outside vendor or technical expert in order to be put to use. 

To stay ahead of the curve, grocers need to have a greater understanding of the world of AI. Today, we’re breaking down this 2020 grocery trend.

 

What you need to know about artificial intelligence in the grocery industry

While AI has been promised as a gamechanger for the entire retail industry, much of the grocery sector hasn’t been quick to implement and adapt to technology, nor push the boundaries of what the tool could be used for. 

One example: AI’s predictive abilities. Grocers have had a tough time throughout the years of predicting the demand for specific products in their inventory, “with forecasts often containing errors ranging from 40 to 60%”. While transactional data can be a good indicator, it may not take into account all of the factors that could influence a shopper’s buying decision. AI has the ability to integrate factors like weather patterns, changes in social climate, and brand perception into predictive forecasts to give grocers a better idea of what they need to stock up on, and which products can be left off of the next purchasing order.

 

How grocers are using AI

The most-talked about use of AI in grocery lies with Amazon Go, a series of concept stores that use artificial intelligence to allow customers to pick items up off the shelves and walk out of the store without the traditional process of queuing, scanning, and bagging. The customer’s Amazon account is charged for the total of their purchase, and they experience a completely frictionless shopping experience, all thanks to AI. This concept was quickly picked up by grocers like H-E-B and Kroger.

In other grocery AI news, Ahold Delhaize announced a partnership with the Innovation Center for Artificial Intelligence, which would allow them to “make product recommendations to consumers and manage goods flows and optimize the supply chain”.

Other notable uses of AI in grocery:

 

Pros and cons of artificial intelligence in grocery

Artificial intelligence holds a lot of promise for every industry, but particularly for retail, and, even more specifically, for grocery. However, like every 2020 trend, it has its pros and cons.

Many of the benefits of AI are specific to to the grocer, including increased data collection on customer behavior, preferences, and influencing factors. This data can inform grocers on their inventory decisions, as well as marketing messages and discounts. These benefits can also be passed on to the consumer, with more targeted specials.

Artificial intelligence could change the way grocery retail runs, but for it to have a major impact it would require a major technology investment from the grocers. As artificial intelligence becomes more widespread, costs may subside, but for now grocers who want to get in on the trend must set aside significant funds. 

An additional downside of artificial intelligence could be the tendency for technology to replace grocers’ focus on person-to-person interaction, which is at the heart of a successful grocery experience.

As you look ahead to 2020, artificial intelligence may be on your wish list for innovation in your store. Consider the successful use cases that already exist in the grocery space, along with the aforementioned pros and cons, and you’ll be able to make the correct decision for your business and your customers.