the grocery store of tomorrow - thinking outside the box · moment marketing, location-based...

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The Grocery Store of Tomorrow Think Outside of the Box When many people think of innovation, they think about creating new products or systems that weren’t there before, or “something out of nothing” to lead in the industry. Yet, just as we must consider strategic innovation within grocery’s niche offering, we must also consider new ways of doing things in the context of a wider system. In going above and beyond grocery, we seek to find retail solutions and opportunities at a more macro level in national brands that think outside the box. Five key mobile trends continue to emerge in the rapidly evolving retail market. Don’t Be Afraid to Think Outside the Box: When thinking about the grocery store of tomorrow, many in the industry agree on a vision for the future, one in which: Stores become emotional destinations. The store floor becomes a “hyper showroom” to help customers become smarter shoppers. Stores enable micro-personalization on a macro scale. Retail’s role in its customers’ well being increases. The store environment becomes highly responsive. Store associates become customer advocates. Technology enables the experience without interrupting it.

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Page 1: The Grocery Store of Tomorrow - Thinking Outside the Box · moment marketing, location-based marketing, and on-site personalization. From a grocer perspective, we see eCommerce success

The Grocery Store of Tomorrow Think Outside of the Box

When many people think of innovation, they think about creating new products or systems that weren’t there before, or “something out of nothing” to lead in the industry. Yet, just as we must consider strategic innovation within grocery’s niche offering, we must also consider new ways of doing things in the context of a wider system. In going above and beyond grocery, we seek to find retail solutions and opportunities at a more macro level in national brands that think outside the box.

Five key mobile trends continue to emerge in the rapidly evolving retail market.

Don’t Be Afraid to Think Outside the Box:When thinking about the grocery store of tomorrow, many in the industry agree on a vision for the future, one in which:

• Stores become emotional destinations.• The store floor becomes a “hyper showroom” to help customers become smarter

shoppers.

• Stores enable micro-personalization on a macro scale.• Retail’s role in its customers’ well being increases.• The store environment becomes highly

responsive.

• Store associates become customer advocates.

• Technology enables the experience without interrupting it.

Page 2: The Grocery Store of Tomorrow - Thinking Outside the Box · moment marketing, location-based marketing, and on-site personalization. From a grocer perspective, we see eCommerce success

Outside the Box, Outside the Industry: Influencers

1.eCommerceeCommerce and Retail are up for a dramatic industry shift, especially in their digital marketing strategies - and that shift will inevitably be toward mobile. According to Inc. “If 2015 was the Year of Mobile, 2016 will be the Year to Optimize Your Mobile Strategy. By Q4 this year, retailers realized they needed to expand their efforts on the mobile front. In 2016, they will expand and develop comprehensive mobile strategies to take these efforts to a new level.” Although eCommerce has an attractive draw, many retailers are still struggling to implement it effectively and in a way that adds value for the customer.

In 2016, expect a shift in mobile strategy that focuses on three key trends: micro-moment marketing, location-based marketing, and on-site personalization.

From a grocer perspective, we see eCommerce success specifically in big cities, with the ability to have specialty items delivered straight to the doorstep (as opposed to a full order). Peapod, one of the largest home grocery delivery services, has seen tremendous success in small, niche markets, with high population densities.

There is also increasing competition from larger retailers on a subscription basis in terms of leveraging eCommerce platforms to sell non-perishable, center of the store products. Amazon allows you consistently stock up on bulk paper towel, just as easily - if not easier - than a walk down the center aisle in the grocery store. On the other hand, items that are fresh, unique and offer a differentiator will take longer (or may never) fall into that same subscription-based or online ordering model. Instead, the opportunity for specialty items and orders is realized in special events and more one off situations.

Page 3: The Grocery Store of Tomorrow - Thinking Outside the Box · moment marketing, location-based marketing, and on-site personalization. From a grocer perspective, we see eCommerce success

2.Mobile loyaltyWhether it’s planning and preparing lists, searching for deals, or shopping at multiple stores, shoppers are practicing resourcefulness and restraint in order to save money. They are also using a variety of methods to find what they’re looking for at the best price. All of this creates mounting challenges for retailers and an up-and-coming solution in mobile loyalty programs. Loyalty programs know to a large degree who is buying what. The question is: how do they leverage the big data from loyalty cards to derive insights that go beyond when a customer was in a store, and how much he or she bought of what? The opportunity exists to generate effective omni-channel campaigns by examining behaviors and truly leveraging the time, place and product.

Moving past the days of loyalty punch cards, today’s retailers are leveraging smart apps that deliver offers and deals straight to shoppers, programs that collect customer data and can tell you what they ordered, tested and bought, as well as when they last came in or redeemed an offer. Not only does this make data gathering easier for retailers, it also makes for a lighter wallet. Big retailers are starting to do it well, think Cartwheel by Target or Starbucks loyalty program.

According to Entrepreneur, “experts predict that the next step in mobile loyalty programs will be to integrate them with the front-runner mobile wallets, such as Apple Pay and Google Wallet. Up until this point, customers have been forced to use mobile loyalty programs within each store’s individual apps. In the near future, we can expect to see these mobile wallets begin to not only implement store loyalty programs, but ultimately become a platform for integrated, real-time marketing.”

Recently, Walmart announced that they were launching their own mobile payment solution - Walmart Pay. It will allow its customers to pay with any major credit card, debit card or Walmart gift card through its existing smartphone app at the cash register. But, Walmart pay is not about mobile payments. It's about data capture.

Page 4: The Grocery Store of Tomorrow - Thinking Outside the Box · moment marketing, location-based marketing, and on-site personalization. From a grocer perspective, we see eCommerce success

3.Useful mobile appsAlthough mobile loyalty programs and related apps are on the rise, so too is the need for mobile apps that actually provide value to shoppers. Most retailers today are struggling to create mobile apps that have a specific purpose and improve customer experience. Unless you’re an Amazon, mobile apps are easily caught up in noise. Only the big retailers, like Walmart, are having the great success getting people to download and use a brand-specific app - with positive sentiment among customers. For grocers to enter into this space, you must provide something truly compelling and valuable of which customers want to come back to over and over again.

Clever mobile marketing can drive customers to physical stores, but the use of technology in-store can also dramatically increase the chance that they’ll purchase on the spot. Retailers will need to provide nearly the same amount of information that customers can find online: price comparisons, ratings and reviews, item locators, and more. According to Forrester Research, Inc. many customers may purchase products in stores because of the immediate availability of products and high service levels.

Page 5: The Grocery Store of Tomorrow - Thinking Outside the Box · moment marketing, location-based marketing, and on-site personalization. From a grocer perspective, we see eCommerce success

4.Quality contentQuality content is the vital piece on the customer’s path to purchase as we move into 2016 and beyond. Consumers desire content they can rely on anytime they are in a shopping or research mood. In fact, Nielsen found shoppers are five times more dependent on content than they were five years ago. Forrester also reported that the average shopper engages with 11.4 pieces of content prior to making a purchase. Grocery marketers should create unique, relevant content about their brands that gives customers exactly what they want.

For many retailers and grocers, customers value coupons and promotions as a primary driver. In a recent study, both primary and secondary shoppers used websites in this way, indicating that promotions on the website can be an effective way to encourage both groups to spend more. Interestingly, primary shoppers were even more likely to search for coupons online than other shoppers (48% vs. 41%). Having a robust offering with coupons will help minimize the need for these shoppers to search elsewhere for coupons. However, also notable is that the third most frequent activity — looking for recipes — reveals another important dimension of website use: Shoppers also turn to brands for inspiration, ideas, and help in solving problems.

Millennials, and their shift in importance of mobile communication and highly visual messaging, is helping to drive a focus on quality content. For many marketers, millennials are quickly becoming a highly sought-after market, but understanding their behaviors and needs is still new for many. Recent reports have shown nine out of 10 Millennials prepare dinner at home three times or more per week. Additionally, three-fourths of Millennials want to become better cooks, but don’t want to learn through old-fashioned cookbooks. This is where powerful visual content is beneficial.

Page 6: The Grocery Store of Tomorrow - Thinking Outside the Box · moment marketing, location-based marketing, and on-site personalization. From a grocer perspective, we see eCommerce success

5.Augmented realityAlthough virtual reality and augmented reality have been part of the Consumer Electronics Show for years, 2016 marks the first time CES has a dedicated augmented reality space. And while integration into mainstream business and brand marketing may still be a few years off, it’s important to note the opportunity that comes with the new technology. Augmented reality (AR) is a live, direct or indirect, view of a physical, real-world environment whose elements are augmented by computer-generated sensory input such as sound, video, graphics or GPS data. As a result, the technology functions by enhancing one’s current perception of reality. Conventionally used in real-time and in semantic context with environmental elements, augmentation can improve and create greater understanding of physical situations, while catering to specific audience focused needs or wants. With the help of advanced AR technology information about the surrounding real world of the user becomes interactive and digitally manipulable as it overlays a real world view - playing directly into the key trend of technology enabling a highly responsive, extremely unique in-store experience.