Groceryshop is a highly anticipated event for grocers, CPG and tech companies. This year it was held in Las Vegas at the Mandalay Bay Hotel between 19-21 September and had a stellar lineup of speakers full of fresh perspectives.
But what if you couldn’t attend? How do you know where to place your chips and what is going to help you win the retail jackpot?
Wonder no more. Scandit sent a few members of our retail team along to gather some insights and get the inside scoop on all the latest goings on in the grocery space. Here’s our summary.
Yep. AI, or more precisely generative AI, had to be in there. There was plenty of buzz around the topic but still a broad spectrum of responses when it comes to practical applications and take-up. Some examples of existing uses are:
- Curating weekly grocery orders for shoppers
- Helping with demand forecasting and supply chain logistics
- In-app chatbots for customer assistance – such as finding things in store
- E-commerce substitution recommendations
A recent survey from Deloitte found that 40% of retail executives expect to be using AI for a business application by the time we reach 2024.
But the main takeaway around AI was the need for clean and reliable data as the foundation and starting point for any applications. Most retailers weren’t comfortable with rolling out AI-driven consumer services until they had fixed this ‘garbage in, garbage out’ issue.
E-commerce and order fulfillment
The slim profit margins that grocers work with were frequently mentioned. At the moment e-commerce is seen as a convenience to the customer. Margins are low when a customer is doing their own shopping, let alone when the grocer has to pick the items for them.
The chatter among delegates and speakers was about how to maximize profitability across all channels. Customers who shop in-store and use other services like curbside are much more loyal, so finding ways to increase basket size and keep them coming back was high on the agenda. Doubling down on own brands is seen as a successful route as the margins can be higher for grocers.
Another point frequently brought up was how to staff for e-commerce and order picking to manage unexpected peaks – such as weather events causing 60% more curbside requests.
Retailers were in agreement that two things are required here. Firstly, training workers so they can perform a variety of tasks. Secondly, providing tools that are intuitive and easy to use that require zero to little training so someone from the checkout team can go and pick orders at a similar pace to a more experienced picker.
Retailers are using computer vision technology more and more to prevent theft and reduce shrinkage. New self-checkout terminals include a camera that can detect items that have not been scanned correctly or when a customer has input the wrong PLU code when identifying their items at the checkout.
Further advances can track products from the moment they are removed from the shelf or smart carts that help to detect items as the shopper selects them.
Although the tech can’t stop theft, it can help identify areas for improvement like product placement and the self-checkout experience.
Retail media networks
In part due to the low margins on offer in grocery, retailers have been searching for other sources of profitability. Many major retailers are now bringing their retail media networks in-house and partnering with CPGs and organizations to make money by offering advertising on their channels.
With customers switching to more own brand labels this could be seen as a route for CPGs to stem the tide and serve up personalized and compelling offers to shoppers when they are in store or browsing for items online.
Insider Intelligence predicts that US retail media search ad revenues will grow at a rate of nearly four times faster than the rest of search advertising in 2023.
A smart way for retailers to connect their partners to shoppers at the right time with the right promotion is to use augmented reality. Using demographic and behavior data, personalized offers can be shown on the shopper’s smartphone as they go around their local store scanning barcodes and looking for bargains.
But for many retailers, media networks are a new frontier for them. Navigating demand-side platforms, target audiences and media inventory will take some getting used to before ad partners will be convinced to come on board.
In-store tech investments
5 areas of disruptive technology were mentioned that are impacting store operations and the customer experience. They were:
– POS and self-checkout
– Media networks
– Loyalty technology
– Smart data capture
Vendors in these spaces continue to receive venture funding as retailers search for new ways to find efficiencies and improve experiences for customers.
The adoption of technology in these areas continues to grow but when looking at the tech landscape, investors had some warnings around those involving big hardware changes.
Robotics and stores pushing the full Amazon Go experience can be plagued by maintenance issues. It can be costly to maintain and keep hardware connected to the internet and other systems that really impact ROI.
The cost of hardware will need to come down before pilots and adoption really ramp up.
Instead, at the moment retailers need to think creatively about what they can do with their existing hardware and setup to boost efficiency and in-store experiences for workers and customers.
And that’s a wrap!
A big thank you to Groceryshop for organizing a great event and all the speakers and delegates who shared their insights with us.