By Doug Baker, Vice President, Industry Relations, Private Brands, Technology, Food Marketing Institute
Today, the industry’s compass needs to be pointed directly on how to solve consumer needs. To do that, the future of grocery will employ technology as a tool to help shopper buy more items.
Retailers committed to this goal should consider the best approaches to getting there. The wide range of possible strategies today includes both hi-tech and low-tech options. Some important ones to consider are:
- Employing private brand as a differentiator and loyalty builder
- Identifying simple meal solutions for customers
- Using data to personalize and customize
- Partnering with innovative brands
- Leveraging technologies such as augmented reality to deliver relevant customer experiences
- Boosting in-store customer service levels
Strategies Emphasize Differentiation
Consumer-centric is how Sprouts Farmers Markets views its mission, according to Amin Maredia, CEO, who spoke at Grocerytalk.
The chain’s private brand strategy, for example, is “laser focused on differentiation,” through innovation and unique attributes. The company’s partnerships include work with emerging brands. Sprouts operates more than 285 stores in 15 states.
Differentiation also requires fielding teams of store associates who are knowledgeable about products to boost the consumer experience. This is the case in the retailer’s vitamin category, which carries some 7,000 items.
The retailer’s latest direction focuses on growing the company’s brand in fresh, including in the deli, fish market, and butcher shop.
Maredia said the focus needs to be less on adding items to a basket, and more on solving the ‘what’s for dinner tonight’ meal need.
Chad Petersen, Senior Director of eCommerce, Lowes Foods, discusses how bridging business and IT departments will change the future of food retail:
Meal Solutions Target Needs
U.S. food retailers have been making considerable progress with a three-year-old innovative campaign to emphasize the importance of family meals. FMI Foundation created National Family Meals Month, held in September, as a tool to “bring families back to the table and share one more meal at home per week.”
The program supports social interaction and healthy eating. The wide range of retailers that have participated include The Kroger Co., Hannaford Supermarket, Food Lion, Price Chopper, K-VA-T Food Stores, Hy-Vee, Wakfern Food Corp., Meijer, Skogen’s Festival Foods, Martin’s Super Markets, Baesler’s Market, and Dorothy Lane Market.
Retailers promote the family meals concepts across their platforms, from social media and print to in-store events. Companies have leveraged many of their assets for this campaign. For example, Kroger has helped get the word out through The Little Clinic, its in-store medical clinics. That effort included the involvement of nutrition technicians, dietitians, clinicians and pharmacists.
Data Boosts Relevancy
Retailers also need to leverage data to customize and personalize products for consumer needs. The use of data has long been a specialty of Kroger. Not surprisingly, this retailer’s chief digital officer, Yael Cosset, sees a big role for data in the future, in areas ranging from ecommerce to personalization. In the latter case, customization for shoppers is likely to focus on areas such as meal solutions and recipe content.
Data will be particularly important in helping to make assortments and service experiences relevant. This will be useful both in store, and outside the store on digital and online shopping platforms.
Augmented Reality Supports Transparency
One emerging technology likely to have a big near-term impact is augmented reality, Cosset predicted. This is because consumers increasingly want to know the origins of products. They want more data on products. This information is typically easiest to access online. So an opportunity exists to employ augmented reality via mobile devices to provide consumers access to relevant information while shopping in stores.
Consider the case of an in-store shopper who wants to know the history of a seafood item. Through augmented reality, the customer could get access to a curated set of data points on a mobile device. This could identify “the full journey of the fish, as well as recipes that involve how this seafood fits into ‘my’ diet,” Cosset explained.
It all comes down to relevancy. Whether the customer need is around choosing tonight’s dinner, or delving into the origins of seafood, the retailer’s mission is to address the needs and make the experiences as relevant as possible. In truth, the customer probably doesn’t even care how the retailer does it.