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Must-have tech for independent supermarkets
Most retail trade media, including this site, have long praised technologies like artificial intelligence, micro fulfillment centers, personalization systems, data analytics and more. While these solutions are relatively easy for larger supermarket operators to afford and implement, they are out of reach for most community-based grocery retailers, even those working with their wholesaler partners.
So how can these independent grocers make investments to stay competitive with the big chains and digital-only banners in the coming years?
That’s the question that several speakers addressed at last week’s National Grocers Association meeting in Las Vegas during the conference’s Technology Summit session, a congress of ideas on how to use systems to improve store performance and engage customers. Much of the discussions focused on topics in the news, including AI, analytics, the connected store, retail media and supply chain disruptions.
Speakers also shared their specific advice to retailers battling competitors of all sizes, both physically and digitally.
Bill Lipsky of UNFI said that more than anything else, independents must own the relationship with the shopper and should ask for help from wholesalers to make it happen.
Eran Harel of AppCard recommended attendees focus on the tech solutions that can make them different than the stores down the street.
Perhaps the most poignant statement came from Bob Perry of NBCUniversal, who said supermarkets need to be reinvented because “It’s not your dad’s industry.”
Discussion Questions
DISCUSSION QUESTIONS: What technology solutions are critical for independent supermarket operators to deploy in the next few years? Which ones are best left alone?
Poll
Loading …BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
DeAnn Campbell
Head of Retail Insights, AAG Consulting Group
Continue to own the relationship with your shoppers! This holds true for relationships and technology. Resist the urge, for instance, to let third-party order fulfillment companies enter your stores. I think you know who I’m talking about here. Okay, it’s Instacart.
Anyway, understanding the shopper’s journey is key to success. This means understanding a customer’s interaction with your store. It’s not enough to set a planogram and forget it, for example. What is the customer reaction to my floor planogram? Retailers need to understand the shopper’s interaction with the store set. Product, Place, Price and Promotion must be enhanced with the People component. Do they like self check-out (SCO)? How many lanes should be SCO? When independent grocers think about this, they should ask even more questions than I just did, with the most important one being: How can I add only the technology that makes my customers happier and helps me understand how they shop?
Good point. Once the shopper starts thinking about Instacart to fulfill their orders rather than Bill’s Super, Bill’s Super loses its connection.
Mr. Lipsky said it well — smaller retailers have the opportunity to own the relationship with the customer. Tech is not going to give you that relationship — great customer service will. Minimal tech to keep your customers flowing through checkout and keep your products in stock. Otherwise, invest in people.
I agree 100 percent with Bob Perry’s comment that supermarkets need to be reinvented because “It’s not your dad’s industry.” I also liken today’s business requirements to Albert Einstein’s philosophy that “We can’t solve problems by using the same kind of thinking we used when we created them.”
Ironically, I was having a great technology discussion with an entrepreneur this morning, Nick Mohnacky (BundleIQ.com), who has committed his company to solving problems faster. He and I talked about the benefits of the RIGHT technology and the application of NEW APPROACHES that actually address bottlenecks and issues rather than simply speed problems up.
Grocers should consider critical technology to address areas such as:
A few “smart” systems that keep you close to the customer — rethought loyalty programs, anything that tracks and facilitates the customer journey, inventory management systems, AI/ML, and data analytics are all good places to start, but each retailer should invest only in technologies that compliment the way they choose to go to market.
I once read that nearly one-third of all technology spend is wasted. And recently, we were all giddy discussing Trader Joe’s success which no one can argue is heavily based on delivering products people want, at great prices with great people. Independent supermarkets are businesses and technology can’t save them from bad strategic decisions and poor go-to-market strategies. If it could, we wouldn’t be writing about the lack of success of Amazon Go. I think it’s critical that independent supermarket operators understand their value proposition and distinguish between technology that is necessary to run their businesses and technology that may grow or transform their businesses; unlike Amazon, they do not have the margins to waste on bad tech investments.
Bringing retail media networks into independent stores will have tremendous value for both the retailer and the advertisers, with the benefit of bringing a much needed new revenue stream into the store. Any technology to track and manage inventory, and to communicate with the customer via social media or loyalty app will allow product expiry waste to be reduced by offering discounts in a timely way.
Each independent grocer needs to determine what uniquely delivers their success. This is the single most critical factor for success as they cannot beat the chains with automation. Only when this is clear can they consider whether any of the technology makes their competitive advantage any stronger.
That said, usually their strength comes from their locality and the ability to tailor services and inventory to best meet the needs of their community. Tech is only a rare contributor to this advantage.
Self-checkout. And update your payment system to include Apple Pay and Google Pay. Then continue to focus on your customers as you have been doing. THAT is what differentiates your shopping experience.
Tony come back … we need you! But in his absence, I guess we’ll have to try and address this on our own.
If you look at most of the choices, they seem to be focused on cost-saving measures (automation, “frictionless transactions”). While cost isn’t unimportant for indies, the focus tends to be more on customer relationships and personalization. So my bet is on the analytics and — to the extent that e-commerce can even be considered — simply making it affordable (a surprisingly large number of chains haven’t even taken baby steps, and one can’t help but think cost is a major issue).
I’ve found the issue affecting growth for independent supermarkets and just about any small mom ‘n pop in general is the lack of desire to try “new.” This may seem like a plug, but I’ve spoken with over 500 (researching) of these small retailers promoting my start-up prior to launch, and it’s difficult to get past what they already know. Until they realize and accept that technology can increase their foot traffic, market share, and revenue (as we do), I’m truly afraid we’ll continue to see an increase in “Everything Must Go” window posters.
The key for independent grocers is to start in smaller, incremental steps to show proof of success and ROI. But many technologies available to smaller grocers today are all-in platforms, making it not only difficult to back out if it doesn’t work well (unhappy customers, year long commitments or complicated programs), but also an expensive investment. The key is to reduce risk from the start.
The best tech solution for the next several years is start in now to build and get closer to the customer, to ultimately become the store of choice. Incremental progress in tech and platforms towards personalization, loyalty, value, and saving time can be incremental and help build a strong defensible position for the long-haul.
Think of whatever technology you lack that can free up labor to provide better customer service. Cashierless checkout is not one of them.