Digital Transformation Takes Food Retail By Storm in 2017 Jan 02, 2018 By: Pat Walsh, Chief Business Development Officer, and Vice President of Supply Chain, Food Marketing Institute The digitally engaged food shopper will fundamentally change the way food is bought and sold, more so than driverless trucks or delivery drones. The needs and behaviors of these shoppers will require food retailers and manufacturers to reinvent their strategies, business models and capabilities from the ground up. The grocery industry is at a critical tipping point. In January 2017, Nielsen and FMI embarked on a multi-year initiative to explore this unprecedented digital transformation. Initial findings from FMI’s The Digitally Engaged Food Shopper study demonstrated that shoppers are already highly engaged with purchasing food online; however, retailers and manufacturers have yet to develop profitable e-commerce strategies that meet today’s consumer expectations. Here are key findings of The Digitally Engaged Food Shopper report: Multi-channel shopping: More shoppers are buying more of their groceries across channels. Digital Experimentation: Grocery retailers and manufacturers are meaningfully experimenting with business models and technologies to find their way online. However, the road to success has not been paved. Grocery Saturation: Grocery shopping will reach digital maturity and saturation faster than other industries before, such as publishing or banking. Center Store Migration: Center store categories are already migrating online and this migration is expected to continue. Young and Digital: Younger, newer and more engaged digital shoppers adopt grocery related digital technologies more quickly and will hasten the expansion of digital grocery shopping further. Broad Transformation: This digital transformation also extends itself into the areas of asset protection, cyber security, etc. Within the next ten years, according to the study, online food shopping will reach saturation in the United States far faster than any other industry. And, center store products will likely shift to online shopping models faster than other departments in store. Consequently, retailers will have to fundamentally reconfigure the layout and role of brick-and-mortar stores to meet the expectations of the digitally engaged food shopper. As with any change, the path forward begins with sound strategy. FMI is poised to provide companies and trading partners the tools to address this strategic challenge and opportunity through an online assessment tool. The assessment will evaluate a store’s current digital capabilities, and help shape strategies your company can use to implement a digital transformation. For more on The Digitally Engaged Food Shopper, visit FMI.org/DigitalShopper.