A special edition of Food Bites prepared by Consumers SA Executive Committee member, Elaine Attwood.
2019 and beyond: six trends shaping the supermarket of the future.
Disruptive change has come to the supermarket sector. Technological innovations online and in-store, as well as shifting consumer expectations, are changing the way food retailers operate. The pace of change has been brisk and shows no sign of abating in 2019.
Here are six top trend forecasts for the supermarket in 2019:
1. Tech transforming E–commerce
E-commerce has been a disruptive force in grocery retailing taking market share from traditional bricks–and–mortar retailers. According to recent research from IGD, the 10 leading global online grocery markets are expected to generate combined sales of almost £200 billion, at an annual growth rate of 20%, by 2023. Four of these markets are in Europe: the UK, France, Germany and Spain. Zino Mavroeidi, the CEO behind one of Europe’s fastest growing AI-powered digital grocers e-Fresh, stressed that technological developments are needed to answer the challenges faced by e- commerce players. According to and Mavroeidi, such advances will be critical to the development of new e-commerce models. “Warehouse automation and AI allow us to envision those type of new e-commerce models and they are more relevant than ever in the online world, exactly because of the nature of the business. New technologies are therefore disrupting the online space by allowing for new propositions and sustainable business models.”
2. Physical stores go digital
Technological advances are also set to change how people shop for groceries in-store. Throughout the coming year, experts expect physical stores will increasingly offer more digital experiences, with consumer–facing technology employed to make it easier for shoppers to find, research and buy food. For example, searching the aisle to find particular products could be a thing of the past with the development of apps that guide shoppers through their in-store experience.“Traditional supermarkets fight back against the online disruptors – and information about shoppers’ preferences and habits will be an important weapon. Consumer – facing technologies, such as shopping–cart–mounted devices or smart phone apps, will steer shoppers towards the aisles and shelves where they are more likely to make purchases. Sensors in the store’s shelves will keep track of the items customers put in their carts and bill their mobile payment system as they exit the store,” BjornThomas, director of business development at equipment supplier Tamara, suggested. IGD’s Pickard believes new installed tech will enable bricks–and–mortar retailers to leverage their “more tangible” shopping experience to their advantage. “This gives these spaces an advantage over online providers, and we are seeing stores begin to capitalise on that and add in extras to incorporate more of the benefits of online,” he noted. “A recent example of this is II Viaggiator Goloso, a premium Italian brand, which has enabled its electronic shelf–edge labels to show the online reviews and scores products have received. This gives customers a more informed choice in-store.”
3. Personalised experiences
Shopper data will also be used to guide people through the shopping experience creating personalised experiences both on and off line. This will be important to develop “meaningful” consumer engagement, Olly Abotorabi, IRI’s regional insight manager, told Foodnavigator.
“Loyalty programs remain an important component of the customer experience, but they are increasingly commoditised, with customer usage driven by habitual collection of points rather than meaningful engagement with the retailer and its brand. This lack of purpose and differentiation is a challenge for retailers who need to derive value from their programs to justify continued investment, especially with disruptive online retailers and specialist “clubs” able to develop one–to-one relationships with the customer without the need for a traditional points–based program.’
Through customer datasets, AI and machine learning in-store, retailers will ultimately be able to target products and offers more effectively. This will drive purchase and ensure suppliers’ budgets for promotions like coupon-ing and sampling are deployed to maximum effect.
4. The rise of “social commerce”
The evolution of e-commerce could result in new ways of shopping. Through social commerce, retailers and suppliers will deliver targeted marketing, as well as new ways to make online shopping more social, instantaneous and convenient.
“In 2019 will see retailers think increasingly about making every moment shoppable. A recent innovation was easyJet making it possible for Instagram users to find and book holidays to new destinations, simply by clicking on a photo they have seen. Whether through targeted marketing or simple ways to make purchasing more seamless, shopping is becoming not just more convenient but more instant as well,” Pickard predicted.
New tech will mean people will no longer need to visit a retailer’s online store. As they look at pictures and videos online they will be able to add products to a virtual shopping cart instantaneously. This has the potential to radically reinvent the way products are bought and sold.
5. Supply chain technology
These developments will place traditional supply chains under pressure. An answer is likely to come in the form of Internet–of–things technology, machinery manufacturer Tomra’s business director Thumas believes. “Processing lines will need to know in precise detail what is coming–in from the field and what is in storage in order to meet demand. And quality and safety standards will have to be higher than ever. In the past consumers might have ignored a defect or made a complaint only seen by the grocery chain or food manufacturer, but social media will change that. A photo of something like a frog in a bag of lettuce can quickly go viral and global, reaching enough people to cause brand damage.”Demand for freshness – and the pressure to cut food waste – will mean supermarkets have to improve efficiency of stock deliveries, Thumas continued. This will be enabled through live data feeds, he suggested.
“Supermarkets and specialised grocery stores will have the option of reducing on–site running costs by becoming smaller, while dedicating a larger proportion of their shelves to displaying fresh produce,” Thumas said. ‘Another likelihood is that supermarkets will remain the same size but changing concept, becoming destinations for brick and mortar shopping. Because retailers need to offer customers a consistent omni-channel experience, stores will connect the physical and digital worlds. Here consumers can see and feel products they might order online. Here, too, the online product offering could also be accessible via interactive screens.’
6. Traceability and data
Data is also transforming consumer expectations around traceability. 2018 saw a number of retailers, including Carrefour and Auchan, adopt block chain technology to provide consumers with access to detailed information on the origin of food products via QR codes. We can expect these programs to continue apace in 2019. Announcing its block chain pilot earlier this year, Carrefour chairman and CEO Alexandre Bompard spoke about the company’s responsibility for its private labels. This, he said, means having “perfect traceability”. We are now testing out an application of this technology on our bird–raising sustainability. We can trace the entire journey of a chicken from the hatchery (to) its inclusion in our stores, going through breeding, feeding, care and indeed slaughtering.” The growing number of people around the world with middle class incomes and lifestyles will become more aware of food safety and more curious about how methods are being sourced and screened. Discerning “foodies” will even be able to check information about the origins and nutritional value of produce, and to see suggestions for recipes and food pairings. This will attract and addict greater numbers of customers while cleverly making each one feel as if they are being treated individually.”
Author: Katy Askew
Source © 2019 - William Reed Business media Ltd.
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