Strategic use of technology can grow your business; a look at the grocery retail industry

In the United States shopping for groceries (along with baseball and football) is a national pastime. Though the average household’s weekly spending on groceries continues to increase annually, these grocery dollars are now distributed amongst multiple shopping channels and the industry is highly fragmented. The problem of how to differentiate yourself from the competition and grow market share in a highly fragmented and competitive marketplace is not unique to the grocery retail industry but let me use it as an example here:

Limited-selection discount stores, Natural and Organic stores, Warehouse stores, Supercenters, Specialty stores and a growing number of Online retailers now compete with traditional supermarkets for every grocery dollar. Thus, the grocery retail industry is an extremely competitive marketplace. Price-conscientious U.S. consumers are increasingly prepared to shop multiple channels for their groceries. This multi-stop shopping should serve as a warning for the traditional grocery store operating using a traditional supermarket model and reluctant to change. Faced with the problem of growing competition, grocery retail outlets must seek out a competitive advantage to strategically differentiate themselves from the competition and make themselves relevant to the consumer.

grocery cart with item

Photo by Oleg Magni on Pexels.com

Competitive differentiation and increasing market share may be realized by employing a variety of strategic evidence-based initiatives that include, but is not limited to; strategic mergers and acquisitions to leverage economies of scale, strategic price reductions to compete on price with competitors, and the strategic use of smart technologies and automation to facilitate differentiation based on an improved customer experience.

I believe that a strategy to improve market share that is based on the strategic use of smart technologies to improve the customer experience, increase margins and drive sales may, in fact, be the most successful. The use of technology to improve the customer experience with an emphasis on convenience, personalization, transparency, and freshness may successfully differentiate your company from the competition.

We all know that shopping for groceries at the local supermarket can be a frustrating experience, but did you know that it can also be hazardous to your health? For some, supermarket shopping may be a significant cause of stress, hypertension, and cardiovascular disease. The problems, hazards, and frustrations associated with supermarket shopping, all contribute to a negative customer experience. Grocery retailers are therefore challenged to utilize technology to make the consumer experience more convenient, more personal, more enjoyable, less time consuming and even less hazardous!

What we are now observing in the grocery retail industry is a significant transformation with online giants like Amazon moving to establish a “bricks and mortar” foothold in the industry, and traditional stores such as Walmart, moving into the online digital e-commerce space to increase their market share. Though online grocery shopping still remains a small fraction of the industry, the transition to the online arena is increasing not surprisingly with both Amazon and Walmart leading the way in this online migration. Amazon has formed a strategic partnership with Google to increase their presence in the digital marketplace and is currently utilizing artificial intelligence to inform pricing and promotions and is experimenting with voice ordering technology. In this paradigm, the consumer has the option to avoid the grocery store altogether and perhaps engage in a more health-conscious activity. This alternative is currently most popular with millennials, though the convenience of online grocery shopping and associated home delivery or store pickup is also appealing to busy working parents.

Should the grocery shopper visit an actual store, then dramatic changes may be evident. Amazon recently announced that it is opening its second cashier-less Amazon Go store to the public shortly, again in Seattle, WA. This store will continue to utilize a combination of artificial intelligence and computer vision to enhance and personalize the customer experience. Amazon is currently employing the marketing mantra “No Lines, No Checkout (No, Seriously) to emphasize the convenience and stress-free nature of the checkout process and differentiate itself based on a superior consumer experience. The consumer experience is further enhanced by the widespread adoption of smart labels that satisfy the consumer’s need for transparency, whether this relates to ingredients, freshness, health, food safety or environmental responsibility and sustainability. In the background, Amazon Go’s utilization of machine learning will optimize fresh food replacement and pricing to further enhance the consumer experience (and maximize profit margins of course).

The grocery shopping experience continues to evolve as retailers embrace digital technology and social media to connect with consumers, increasing sales and growing market share. Stores fitted with Bluetooth-enabled beacons now send welcome messages, as well as targeted and personalized mobile coupons to consumers, significantly boosting in-store sales. In the future, grocery purchases made on mobile devices may be delivered by drone.

The role of the grocery retail workforce will also continue to evolve in the automation age, alongside these new smart technologies. Though in the short term, there may be some job losses a new breed of professional, capable of managing consumer experiences and technology will eventually evolve. Companies like Amazon will continue to invest in “people analytics” to optimize their workforce, maximize their staffing investments and reduce turnover. Store employees equipped with the latest digital tools will become experts, not only in product information but in providing nutritional advice, recipes and purchase recommendations, further improving the consumer experience.

Final thoughts

The use of technologies to improve the grocery shopping experience will only be possible in companies with leadership that has imagination and vision, combined with a willingness to challenge the status quo and view budgeting for technology as an investment rather than an expense. Though at present, technology implementation may only be feasible to the largest in the grocery retail hierarchy, if implemented, the transformative smart technologies used to enhance the consumer experience, may well serve as an effective solution to your problem of competitive differentiation in the highly fragment grocery retail industry moving forward.

 

By Graham Shaw, PhD

Dr Shaw is an experienced and innovative medical educator at Barry University’s School of Podiatric Medicine. He has extensive experience in medical education, pedagogy, and e-learning technologies. He has recently returned to school and is now an MBA student in the Andreas School of Business at Barry University.

Graham Shaw

Graham Shaw

You can find more about him on LinkedIn at https://www.linkedin.com/in/graham-shaw-3a615b40/

 

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Most Innovative Companies of 2013

The most innovative companies of 2013 can be considered to be the ones which are on the verge or already leading a market takeover. These companies combine together a diverse group of experts and innovators, all of which have their eyes set towards changing the world. Whether it is the creation of new technology or the innovative footwear, these are the top 5 companies which leaped all others according to the fast company magazine.

1. Nike

FuelStefan Olander,  the lead of the Nike’s Digital Sport division, is working in collaboration with a team of engineers who are creating of a pair of Nike Shoes with embedded sensors. These sensors would be able to detect the pressure which is created by the shoes. The data collected is then digitally fed to an iPhone. This device is just a fragment of the innovative products and services the company plans to launch.

2. Amazon

Having introduced the same day shipping options in a number of US Markets, and then same day delivery service Amazon deserves to be at the top grabbing the 2nd spot among the most innovative companies. In all, the entire retail industry has by now realized the true potential of Amazon, as it notches up its market shares with every second that passes by. That’s not all, as every other week the company manages to make the news through the launch of a new technology or service.

3. Square

Empowering the customers with the credit card management and transaction services using a mobile device, is the basic idea which Square had at the start, but now it has managed to extend its lead over all of its competitors.

4. Splunk

Whether it is the billions of clicks on Facebook and Twitter or any activity on all other websites, Splunk has the expertise and the resources for monitoring, indexing as well as collecting the data and putting it to good use through which has provided new business opportunities and profits for its clients.

5. Fab

With dozens of online boutiques and design centric products, Fab managed to capturea revenue of about $ 150 million in 2012. Moreover, the membership for the company is also progressing at maddening pace which earns it the right to be termed among the top innovation companies.

For the complete list go to http://www.fastcompany.com/section/most-innovative-companies-2013

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