Innovation and Ecommerce in the Grocery Industry

Demand for intuitive grocery ecommerce sites has exploded over the past year, with online food sales growing by as much as 90% in 2021 according to Coresight Research.

The increased digital traffic is requiring that grocers move toward an omni-channel experience for their customers that streamlines and ensures an effective online shopping process. As grocery chains explore solutions to meeting this demand, how will they need to transform to capture the most accelerated growth at this pivotal moment within the industry?

Modernize Infrastructure with Cloud Technologies

Like many industries, grocers are making a big push to move to the cloud. Driving factors for this migration include improved efficiency and agility for deploying applications. Grocers may consider leveraging cloud solutions to create a modern merchandising solution or using cloud technologies to offer supply-chain collaboration across multiple vendors and providers. Additional opportunities include digital signage, remote store technology support, and associate training opportunities.

Customer data is moving towards being hosted within cloud environments, and creating a centralized data lake may make consumer information more accessible for project efficiencies, marketing opportunities, and in some cases even as a potential additional revenue stream. Grocers may also begin to consider migrating much of their on premise store technology to the cloud for cost savings opportunities, faster response time to downtime resolution, and easier deployment of applications or upgrades. The restaurant industry has seen this push to cloud migration recently, and grocery chains may soon begin to follow suit.

A few years ago, Amazon lost an estimated $5 million in revenue just as a result of their website being down for 40 minutes. There are multiple digital retail touchpoints when an ecommerce transaction is made such as mobile or online ordering and Point-of-Sale (POS) systems. Behind these touchpoints is the complex infrastructure made up of the network system, data center support, application support, cloud operations, and software vendors. Grocers are recognizing the need to digitally transform and modernize the foundation of their infrastructure to avoid costly downtime and complex issue resolution. 

While a common perception is that artificial intelligence and automation may take away jobs, the overall sentiment is that it will instead shift the focus of retail jobs to be technology-focused.

Addressing the Labor Shortage

As the industry embraces unprecedented growth in ecommerce transactions, grocers are seeing labor shortages impact their vital store workforce. According to the Department of Labor, there were more than 800,000 unfilled jobs at retail stores across the U.S. in March of 2021 as the country continued to recover economically from the pandemic. To more efficiently identify key talent, grocery chains will need to streamline the candidate application process. Making applications available at easily accessible kiosks in stores, options to apply for jobs via mobile device, and remote interview opportunities can increase job interest. Flexible work environments attract top talent, leading some grocers and major retailers to turn to mobile application scheduling systems that offer more options for picking up extra hours or covering shifts for coworkers in the hopes of retaining store associates.

Another solution for mitigating the labor shortage is to automate employee tasks by developing automated fulfillment centers or employing robotic shelf stocking technology. On top of combating the talent shortage, automation provides opportunities to gain efficiencies in operations, cut costs, and reduce overall product shrink for grocers. While a common perception is that artificial intelligence and automation may take away jobs, the overall sentiment is that it will instead shift the focus of retail jobs to be technology-focused. This shift would be beneficial to the grocery industry in particular because technology roles are often higher-paying than traditional store associate opportunities, and would open up a new and previously untapped candidate pool. Grocery retailers who are able to upskill workers to fulfill these technical roles will win the war on talent and maintain a competitive advantage over their peers. 

Personalize the Customer Experience

Data is key to personalizing the customer experience, which is a growing expectation for grocery ecommerce. Shoppers have come to expect features that make their online shopping experience more efficient like provided suggestions based on past purchase history and storing payment and processing information for repeat customers. Retailers who are able to harness customer data and utilize it accordingly to provide new features and product recommendations are going to more effectively build a loyal customer base.  

Creating an omni-channel experience will be vital to the future growth of both online and in-store channels for grocers. Shoppers in stores rarely carry coupons anymore, so how can grocers still offer promotions to in-person customers? Mobile application and digital couponing engines will need to become more robust, working efficiently for in-store shoppers while also recognizing products in digital carts and providing opportunities to reach coupon criteria online. Similarly, evoking customer loyalty through creative programs that utilize evolving technology will be key to engaging current and future shoppers.

Grocery Store of the Future

To say that grocers are experiencing a complete digital transformation is almost an understatement, as unprecedented growth accelerates the shift to the ‘Grocery Store of the Future.’ Our clients are modernizing their infrastructure, employing automation, and personalizing digital engagement to ensure a competitive edge. While the ultimate end state may remain unclear, making targeted investments is key to ensuring meaningful progress.