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What You Need to Know About Grocery Store Technology

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The retail industry continues to invest in technology to create a more seamless shopping experience especially in this world of omnichannel. Increasingly, methods to pick up groceries have been simplified, especially with the invention of online shopping, but it’s not just Amazon offering the services. Grocers are making investments in technology to allow customers to streamline the process of selecting goods, paying for them, and even taking them out of the store.

According to the Nielsen Digitally-Engaged Food Shopper report, experts estimate 70% of consumers will be shopping for groceries online by 2024, so grocers are taking note. It’s important to remember though, it’s not just perishables that consumers are shopping for online, as shoppers also buy pet supplies, snacks, paper goods and other needs through online grocery shopping options like those profiled here.

 

Grocery Store Technology: Self Checkout

When grocery stores began integrating technology into the way we shop for food, one of the biggest inventions was the self-checkout machine. Manned by a customer instead of a cashier, self-checkout makes it easier to checkout with small purchases rather than waiting in line behind customers with large orders. Now retailers have made investments in technology that eliminate even the step of needing to wait at a machine and manually scan everything by hand. Shop & Go piloted the first in-store supermarket mobile shopping option seven years ago and this set off a chain reaction as retailers rushed to give customers the same technology. Earlier this year, Kroger expanded their Shop & Scan service from their Cincinnati-area test store to an additional 400 stores.

Shop & Scan allows customers to shop for items in their Kroger store by using a handheld scanner and the scanner keeps a running total of their purchase amount plus accepts coupons. Kroger customers can pay for their items at a self-checkout lane after returning the scanner or use a payment option through a Scan, Bag and Go Mobile app, which while only available at some stores, will let customers avoid the handheld scanner and just use their smartphone completely to shop.

Meijer is the newest retailer to offer their own addition of scan-and-go grocery shopping with Express Checkout at a few test stores; however, they’re forgoing the handheld scanner and letting customers go right to their smartphones. With Express Checkout shoppers can scan with the Meijer app, bag on the go, then check out at a self-checkout lane by scanning a code. Not all retailers are following suit just yet though, as Walmart ran a test of Scan and Go services then ended it in April 2018. Sam’s Club is still offering the service, and 80% of consumers who try Scan and Go opt to use the service again.

 

Grocery Store Technology: Machine Learning

Machine learning technologies like CB4 are a recent development in grocery store technology, and grocery retailers who have adopted it, like Kroger, Meijer, and our own clients like Heinen’s Fresh Markets, have seen big returns.

Kroger is using machine learning to roll out their “Restock Kroger” initiative. According to Kroger chief executive officer Rodney McMullen, “Kroger’s success has always depended on our ability to proactively address changes by focusing relentlessly on our customers. We have the scale, the data, physical assets and human connection to win.” They’re deploying machine learning to do just that, delivering more personalized recommendations (they already deliver more than 3 billion annually), optimize space in their stores, and optimize product pricing.

On the other hand, Heinen’s uses CB4’s machine learning software to detect and correct operational issues in their stores. The software discovers the items with the highest local consumer demand suffering from operational issues, and guides store staff to correct the problem. Correcting these operational issues results in 0.8-3% same-store growth, as seen in our product overview. Our partnership with Heinen’s was highlighted recently in Supermarket News, where you can learn more about how our partnership works.

 

Grocery Store Technology: Click-and-Collect

The evolution of self-checkout also birthed a new way to pick up groceries, a callback to the days of phoning the grocer for a loaf of bread, milk and eggs to be picked up at a later time. Harris Teeter, a Southern grocery chain, was acquired in 2013 by Kroger, and with it came the company’s click-and-collect service — online ordering of groceries to be picked up at a chosen time. Kroger expanded the service and rebranded it as Clicklist, eventually rolling it out to over 1,000 stores. Kroger also integrates digital coupons and shows customers past purchases to make reordering easy as well. Once the online order is complete, a customer needs only to checkout online then make their way to the store at the reserved time they choose, and from there, they call the store to notify their arrival, hand over their card, and the groceries are loaded right into their car. Kroger also went one step further and partnered with grocery delivery company Instacart to offer groceries delivered straight to the consumer’s door. These investments were strategic and effective: Kroger’s digital sales went up by 127% in 2017.

 

Grocery Store Technology: Online Delivery and Voice Ordering

The battle for supremacy in online grocery shopping is on as Kroger, Meijer, Walmart, and Target try to compete with Amazon, especially in the wake of Amazon’s purchase of Whole Foods. Target purchased Shipt for $550 million in December 2017 and it was a strategic move as Shipt was Meijer’s delivery provider. Shipt now currently partners with Meijer, Target, HEB, and Western Market. Walmart isn’t standing idly though, and will offer grocery delivery across 100 metro areas in the upcoming months, nor is Kroger, as they offer delivery with Instacart.

One new wave in grocery store technology creeping its way into the grocery business is voice ordering. Walmart currently offers voice ordering through Google Home, and other retailers will likely follow suit. Customers will be able to ask a digital device such as Amazon Alexa or Google Home to shop for groceries. The technology is already across the pond a bit: UK supermarket Ocado has developed an Alexa app for consumers. Voice ordering is predicted to capture $40 billion of the market by 2022 and groceries are the top category for consumers, which presents a new challenge to retailers to expand their offerings.

All of this is just the beginning, however, as the grocery sector moves into robotics or self-driving grocery stores. Robomart, an autonomous grocery store, was on hand to show retailers how they could partner up to cut out grocery delivery services at the Consumer Electronics Show 2018 in January. While the company is still in pilot program status, it’s a look at what the future of food shopping could be for consumers.

Grocery stores are clearly not done with technological investments in making the process of food shopping easier for consumers, and if the most recent advances are any indication, stores are working hard to develop the grocery stores of tomorrow. Even waiting in line is being shaped by technology, as Kroger uses sensors to detect how many people are in a store at a given time, and deploys check-out personnel as needed. For now, customers have a wealth of options for simplifying the process of shopping for groceries and retailers continue to keep them walking in the door or clicking on a button, but there will always be more options in the future.

To learn more about how CB4 leverages AI and machine learning to improve in-store operations and execution, take a look at our Content Library, where you’ll find customer success stories, product overviews, and more.

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