Grocers are designing stores to meet the needs of today’s omnichannel shopper.
For the longest time, the traditional grocery store has flourished as one of the pillars of both small towns and big cities across the country. It has been more than the source of provisions for families. The supermarket has anchored shopping centers and often served as a social gathering place and sponsor of community events.
While many of those functions endure, there is a growing consensus across the food industry that grocery stores must redesign and reinvent themselves to relate to today’s omnichannel consumers who want a seamless shopping experience through all available channels-from the traditional bricks-and-mortar store to smartphones, tablets and computers.
Most of all, grocery stores must blend the digital world with the physical store while incorporating more design elements that offer sights, sounds and touch as well as emotional experiences. This transformation extends beyond digital add-ons such as online grocery shopping.
Michael Harris, managing partner of Match Shop Lab, a shopper marketing agency with offices across North America, says stores need to be reconceived to be sensorial environments as opposed to just efficient distributors of products. He expects to see a massive reduction in nondescript pre-packaged items and an increase in unique, perishable and emotionally driven products and categories.
“Grocers who fail to merge the digital and physical worlds will watch their sales erode as more consumers use digital channels to research and buy;’ says Steve Cole, CMO of Gladson, a Lisle, Ill.-based provider of syndicated product images and information and category management services. “The way consumers will use digital for shopping in the next few years will change drastically. This includes what products consumers will buy in store versus what products will be purchased online. With items such as paper products and toiletries hanging in the balance, e-tailers and traditional grocers will battle for the sales of these high-margin items.’
Juan Perez, president and CEO of ADUSA, a Hoffman Estates, IlL-based provider of self-service systems for grocery stores, provides a glimpse of what happens in the evolving supermarket: An office worker receives a coupon on her smartphone for a sandwich that is on special at a local supermarket. She uses the omni channel fresh foods selforder app on her smartphone to order the sandwich and schedule a pick-up time during her lunch break. While in the store to pick up her sandwich, she decides to use a self-order app on a convenient in-store kiosk to place an order for a party tray she will pick up over the weekend. She then also decides to print her shopping list and pick up a few items she had added to that list the previous day while at home.
Not futuristic enough? Here is how Eran Sharon, vice president of product management for YCD Multimedia, based in New York, envisions such a grocery store: The use of audio-visual media is an integral part of the shopping environment. The buying process combines messaging to the client during her visit to the store to strengthen the brand and assist in her decision making, as well as to entertain and make the visit an enjoyable experience.
Audio-visual displays are located in various areas of the store, such as delicatessen, meat and bakery. Displays are also installed at the points-of-sale and in aisles; that is, in areas that offer an opportunity to high-impact advertising and impulse purchasing. Stores create a digital multimedia ecosystem that includes regular screens, video walls, kiosks and interactive applications, using tablets. Customers experience content ranging from entertainment, advertising and promotion to brand video and tablet-based resources. QR codes extend digital signage beyond the boundaries of screens and video walls into mobile devices. They remind shoppers of offers and coupons by exact location according to GPS. Shoppers then share this adventure with their friends on Facebook and Twitter.
Sound far-fetched? Not so much, since many these digital elements are entertaining and informing shoppers in two leading supermarket and hypermarket chains in Istanbul, Turkey: Migros and Macrocenter. YCN is negotiating with a major supermarket chain in the U.S. for a similar installation.
Meanwhile, Westside Market, a family-owned and operated chain of neighborhood stores in New York, will be opening a new location equipped with new technologies. Shoppers there will be able to connect to Wi-Fi via smartphones and tablets. Technology will create faster checkout counters and an app will enable customers to learn about specials and products sold at the store while shopping.
“At this time, the areas in which digital and physical most logically intersect are in tracking consumers’ purchasing activity and pushing individualized content based on past purchasing behavior;’says Joseph Bona, president, Branded Environments for CBX, the New York based retail design consultancy and brand agency. “This could include weekly specials, shopping list management, menu/ingredient ideas for a family of two, four or more, introduction of new products and recipes and a host of other specifically targeted service offerings. Additionally, linking health and nutritional information with eating habits may provide more meaningful connections other than offering a list of packaged commodities online.
“Chain drug stores are adding health advisors armed with digital tablets as a way of elevating personalized service levels in-store;’ he adds. “Likewise, supermarkets could add a nutrition advisor or a meal ambassador with an iPad as a way of elevating in-store engagement. Why do customers always need to go through a checkout lane? As successfully done in other retail sectors, can’t roaming clerks check you out with a portable scanner if you’re just picking up tonight’s meal of five items or less?.”
Cole agrees that the key consideration when implementing technologies that bridge digital and physical worlds is to enhance the shopper’s buying journey, not complicate it. For starters, he says grocers should understand how digital technologies can best support their shoppers’ current habits.
“This can lead to introducing mobile apps for recipes and shopping lists, weekly circulars available on digital platforms and digital coupons;’ says Cole. “For retailers looking ahead to futuristic technology, Apple’s iBeacon is an example of technology that hopes to blend in-store and digital realms. iBeacon, and other in-store location devices, push offers to shoppers’ smartphones based on both the store they are in and, crucially, their location within the store:’ ·currently, the technology is being tested by Giant Eagle and Safeway.
In the fresh foods departments of grocery stores, Perez says well-placed self-ordering kiosks, attractive digital menu boards, and digital queue management systems can make shopper traffic flow smoothly, and web/mobile ordering apps give consumers all of the tools they need to engage the supermarket on their terms. “After all, that’s the power of the omni-channel;’ he says.
So much focus is centered on what is happening in the digital world that it is easy to forget that the physical world is still what offers us the best way to interact with brands, products and services. Supermarkets are selling an experience, not just products, says Cole. Leading grocers are accomplishing this with instore design elements such as kitchens for culinary workshops, ask-the-expert stations, elaborate food sampling displays and other features that engage the shoppers’ senses.
“In the uber-connected, myriad product world, shoppers need more from retailers than the ability to quickly, efficiently and cost effectively purchase the items on their list;’ says Harris, adding they increasingly will be able to do that from the comfort of their armchair. “The tone needs to be authentic and natural, conjuring in the mind of shoppers real people toiling to grow and harvest their food. Other design elements would be those that break up the monotony of aisles and fridges- an artisan cheese maker, a local farmers market, an aspiring chef from a local culinary school.’
Designer Juan Romero takes it one step further. The president and CEO of api( + ), based in Tampa, Fla., says stores can leverage welldesigned and maintained environments by sharing images through omni-channel efforts and encouraging social media activity.
“Images of grocery store interiors are rarely used in promotional efforts;’ he says, “but they can be a draw for customers who choose their shopping destination based on environment. Images are especially compelling for consumers who have not yet shopped the store.
“Well-designed environments can encourage social media activity, which creates buzz and brings in more shoppers:’ he adds. “Social media users frequently check in and share ‘selfies’ with their social media networks when they visit unique or beautiful restaurants. There is no reason a grocery store can’t also leverage this free third-party promotion. To boost in-store social media use, retailers need to become destinations that consumers want to talk about, and they must create photo opportunities, which can be done via design. Retailers can also promote social media shares by providing loyalty program incentives for photo shares, check-ins and tweets.’
Liz Crawford, vice president of strategy and insights for Match ShopLab, presents a creative and radical way that grocery stores will be redesigned. She says that “grocerants” will be the new norm. A grocerant is a store that combined a supermarket and a restaurant. The key here is that most “grocers” will no longer sell .”ingredients” such as flour or cake mix, but will sell prepared food for consumption within a few days. Cooking itself will become the purview of the hobbyist, as real culinary skills and time become scarcer. She lists two megatrends that support this prediction:
• Consumers are urbanizing. The Brookings Institute reports that large American cities are growing faster than the suburbs for the first time in almost a century. That is important because city dwellers use prepared foods to a greater extent than ingredients, and they do not have the storage or cooking facilities that their suburban counterparts do.
• Demographics are changing. There are more single adults now than ever before. In 1960, 60% of adults 18 – 29 were married, according to the Pew Research Center-a fact tank focusing on attitudes and trends shaping America-today only 20% are. In 1970, over 72% of all adults were married; today that number is 50%. And, as a rule, single adults do not cook as much as families or even couples do. Finally, Millennials do not have the same cooking skills as previous generations did.
“So, taken holistically, the picture is changing;’ she says. “Shoppers will increasingly look for prepared foods to heat-and-eat during the week. Grocerants will fill the need.’
At the same time, she says restaurant design will influence supermarkets. From themed restaurants such as Tex-Mex to broad-appeal, low-cost diners, grocers selling prepared foods will adapt new designs to sell their goods.
“There may be a convergence of some popular restaurant chains with grocers to create a new format for grocerY:’ she says. “Imagine Applebee’s and Kroger joining forces to sell prepared foods to go in mid-size cities throughout the Midwest. Maybe the shopper could pick up nonfoods while in the store, such as personal care items. It would neither be a typical grocery store, nor a typical restaurant, like today. It would be a re-invention to fill the needs of a new generation.’
Another grocery format that Crawford envisions is the nearly completely self-serve food warehouse. This selfserve retailer will resemble “automated retail” without much human interaction at all. Instead of relying on people to work, it will rely on digital technology for product information, ordering and payment.
“I believe the era of self-service retail is close; she says. “This may serve a certain cost-conscious segment of the population, while grocerants may serve a more affluent segment. Will there be retail experiences in between? Sure, but what’s different is that those traditional stores may not dominate the food retail landscape in 15 years.’
Despite such far-flung formats of the future and the growing technological wizardry of today, success often comes down to people. Jeff Weidauer, vice president of marketing and strategy for Vestcom, a Little Rock, Ark.-based provider of shelf-edge marketing solutions, says that a major element in the brick-and-mortar store experience is the availability of knowledgeable sales people who can help shoppers.
“In a world that is focused on labor cost reduction, the use of technology can help, but live people are still necessary to engage with shoppers and provide advice and support:’ he says. “Brick-and-mortar stores have a major opportunity as online continues to grow, but connecting the virtual and real worlds requires dedication, investment, and, most of all, a willingness to look at the entire shopping trip holistically to see where technology makes sense and where it doesn’t.’
Read the full article in Grocery Headquarters, November 2014 issue