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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Is the super hot Miami tech scene sustainable?

According to a recent article published by Fast Company, Florida ranks number one for Innovation and number three in Revenue per startup at $1.2 million.  There seems to be a consensus from the various media outlets that Miami’s high tech movement has legs.   I can attest to the veracity of the rankings and media buzz because almost every other day I learn about a new startup, technology event or product being launched either here in Miami or by a Miami based startup.

Brickell Ave

Brickell Ave

Unlike some hyper-local technology hubs, the theSouth Florida (SoFL) and in particular the Miami (MIA) tech hub has significant international influence and its ripples can be felt from as far as Buenos Aires (Argentina), Santiago (Chile),  Western Europe and of course San Francisco, California.  Much of the success can be attributed to the many local organizations doing a great job energizing and attracting talented individuals to the region.  Their hard work in conjunction with local and state leaders, educational institutions and local companies is paying off big.  I do want to mention some of the organization that should receive recognition, below in no particular order:

http://www.southfloridatech.org

http://venturehive.co/

http://refreshmiami.com/

http://sfima.com/

http://www.lift1428.com/projectlift

http://www.miamijobfest.co/

The good news is that all this attention is good for Miami.  The fact that media is labeling Miami’s Technology hub as “Silicon Beach” and social medial hash-tags like #SunshineEconomy are found frequently in twitter, has help attract some key technology events and conferences, like:

 http://tedxmiami.com/  

http://tfamericas.org/

http://fiba.net/

http://www.simemia.co/

http://webcongress.com/miami/

But I believe being able to attract great talent, foster collaboration and innovation, will only get you so far without a steady flow of capital.  To really make a significant and sustainable impact, investors must make money.  It seems traditional venture capital (VC) firms have just begun to expand their portfolios in SoFL, but most remain cautious and most continue to fund predominantly west coast startups based in “Silicon Valley”.

But not all the recent buzz has gone unnoticed, we have seen some organizations very active locally like the Knight Foundation and some non traditional organizations making inroads. Many agree that Miami already has the attention of the Latin American investors, or at least the local media is quick to point out in some of their recent publications like: “TechCrunch Disrupt Finale: Mark Zuckerberg, Marissa Mayer and .. The Latin Invasion” or “How Miami Is Filing The High-Tech Void In Latin America”.

And all this is beginning to sound very familiar, it it sounding like an excerpt from Andres Oppenheimer’s best seller book Cuentos Chinos, where he proposes a connection of between Miami’s success and the worsening economical and social situation in Latin-america.  I am not an economist, but one can easily extrapolate and conclude that if Miami’s high tech success is depending heavily in Latin-america, then the party will abruptly end by 2017 when Brazil economy decelerates and the rest of the region finds some form of equilibrium.

But independently of the outcome of Latin America and its impact on Miami, the region still must prove to the investors one thing and one thing only: it must show returns.  All this must produce success stories and demonstrate there are profits to be made.  If “Silicon Beach” is here to stay, it must produce a stable stream of IPOs (Initial Public Offerings), buyouts or any arrangement where institutional and private investors can see returns.

It takes a couple of years for the average startup to start seeing profits, this means if Miami’s high tech scene is going to be sustainable, we should be starting to hear the IPO chatter soon and hopefully thing getting ready to go no later than 2016.

So lets get the ball rolling, shall we?  What Miami based company do you think will IPO or be sold/bought first?

by Juan Meza

Blog at WordPress.com.

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