The Future of Grocery: Bringing Digital Experiences to the Store

Designing experiences with the customer in mind

According to recent Publicis Sapient/Adobe research on data maturity in retail, only 40 percent of respondents said they were leveraging data across channels to create a 360-view of the customer. By eliminating information silos and creating a more holistic view of the shopper journey, grocers can invest in developing the right technologies needed to provide more than just convenience.

“Once you begin to get visibility into shopping behaviors, patterns and preferences, you can do a lot of things right,” Hubbard said. “You can begin to proactively anticipate what goes on the shopping list and begin to simplify that experience. You can begin to recommend subscribe-and-save options for items bought frequently, or start recommending recipes that would inspire creative cooking and reduce waste because you’re not throwing things out.”

Leading in grocery by reducing complexity

Millennial and Gen Z shoppers are dominating the grocery market – and doing so more digitally. Statista research shows that around 45 percent of Gen Z and Millennial shoppers primarily used online grocery services in 2019 – up from 43 percent in 2018. Integrating online and offline channels requires meeting a growing need for convenience that makes shopping more enjoyable.

Successful customer-obsessed grocery experiences follow the four LEAD principles of design -- light, ethical, accessible and dataful. When combined, these four principles help grocers think about the customer experience from all angles. For modern grocers, this means focusing on reducing complexity, with innovations like:

• Clean, easy-to-navigate e-commerce experiences, with the ability for customers to set preferences and receive personalized suggestions, curated offers, loyalty programs perks and discounts based on needs and shopping history.
• Integrated mobile experiences within the physical store, allowing shoppers to better navigate physical locations, learn about new products on the store shelves and customize checkout experiences at point-of-sale.
• More transparency into the supply chain, with education around pickers and services aimed to build consumer trust.

Transformation in action: Walmart Canada recently reimagined their physical presence while reducing complexity with its Supercentre concept. The store features a dedicated Fast Lane option, which allows shoppers to seamlessly scan items on store shelves and process items at checkout using their My Walmart mobile app.

Walmart’s mobile app also allows shoppers to tap into personalized discounts, build shopping lists and personalize delivery pick up times –connecting the shopping experience across channels, while reducing time and friction with in-store. In 2016, Walmart saw a 98 percent increase in mobile orders and a 20 percent increase in conversions with this improved mobile experience.

Leading in grocery by creating end-to-end experiences

Unlike other retailers, grocers face unique inventory issues, like the freshness and availability of produce online and on store shelves. An increase in in-store pickup or curbside/home delivery poses supply-chain challenges, as well as designing the in-store experience to accommodate more pickers dedicated to these services without overcrowding the physical store experience.

“Grocery is a very low-margin business,” Vivek Puri, group vice president, growth and strategy lead, Publicis Sapient, said. “If you look at the old paradigm and how they reconfigure their supply chain to the digital customer, there are a lot of challenges, which is highly competitive when compared to Amazon.”

According to Halliwell, Amazon’s choice to differentiate its grocery concept from Whole Foods allows it to provide experiences tailored to different customer preferences.

“There's a need for Amazon to differentiate their picking solution and their ability to fulfill orders from the people that still want the in-store experience,” Halliwell said. “The Amazon grocery concept store is a way of separating out the pickers and the delivery operators from individuals who still want a premium grocery experience.”

For modern grocers, emerging supply chain trends play a critical role in shaping the overall customer experience. Grocers should leverage data to weigh the benefits of these shifts in order to determine the best approach.

• More physical and direct-to-consumer delivery options give the customer choice and flexibility. Examples include improved home delivery, curbside pickup, spoke (locker or kiosk) pickup, subscription services, BOPIS processes, click-and-collect and delivery option-based pricing.
• Omnichannel optimization. Insights on shopper preference, inventory, order fill rates, and last-mile fulfillment give an end-to-end view of the customer journey. Grocers can leverage data to create services that meet customer demand, while minimizing cost across the entire distribution chain.
• Improved shipping and logistics. New delivery models means changes and investments in transport, with grocers exploring new ways to optimize delivery routes for speed and efficiency. Examples include working with third-party carriers for last-mile fulfillment, developing or acquiring a delivery partner (i.e. Target’s acquisition of Shipt in 2017), or creating localized pickup centers. In-store, shelf management, processing, and staffing to accommodate increase picking need is a focus when improving efficiencies.
• Better demand forecasting. An increased demand for speed and convenience puts pressure on grocers to develop a more agile approach to demand planning cycles in order to reduce cost and maximize experience. A de-siloed approach that unites analytics and operational data within a singular cloud-based platform reduces friction between planning and execution, allowing for better resource planning, inventory optimization, seasonality, and location-based insights.

Transformation in action: When Loblaw -- a retailer with more than 100 years of legacy brand recognition -- wanted to transform its processes into a leading digital organization, the company took a “continuous improvement” approach, with focus on iterative innovation. Loblaw became one of the first companies to offer grocery delivery and pickup across Canada. Its PC Express Online service allows customers to order online with pickup and delivery options across 700+ store locations and 13 banners. Loblaw also introduced PC Express pickup locations for easy order pickup. With 670 sites, this allows 75 percent of Canadian shoppers to be 10 minutes or less from a pickup location.

The new grocery experience

The global grocery market is projected to reap $1.9 trillion in new sales by 2023, a 28 percent increase since 2018. At the same time, new generations of digitally native shoppers are entering the market – shifting expectations and demand from retailers. While technology and data play a role in driving these innovations, the ability for a retailer to keep the needs of the customer at the core is paramount for success.

 “Once grocers begin to really leverage data effectively, they can enable experiences that are truly relevant…that’s going to be a real shift,” Hubbard said.