Expert Column: In-Store Analytics Will Power the Grocery Store of the Future

In a world where the lines between online, mobile and in-store shopping continue to blur, consumers have become accustomed to having a diverse array of purchasing choices at their disposal, whether at the register or with the click of a mouse or tap of a touch screen. How is the evolution of technology impacting grocery shopping today? How will it impact the grocery store of the future?

Today’s shoppers are tech-savvy

To be sure, the traditional grocery store remains a top channel for brick-and-mortar shopping. According to a Forrester estimate reported by CNBC in June of this year, grocery only accounts for 2.2 percent of online sales. Unlike categories such as electronics or books, there are important sensory aspects to grocery shopping that are difficult to replicate online — people often prefer to check the ripeness of their produce before they buy, or take a look at what’s available at the prepared foods counter when they want to pick up something fast for dinner.

But especially as smart phones become ever more ubiquitous and consumers ever more technically savvy, grocery chains that fail to adapt their in-store strategies for the multi-channel shopper will put themselves at a disadvantage. The day is coming when “smart refrigerators” might place orders that consumers pick up on the way home from work, or when shoppers will want to check register wait times before they stop at the store.       

Data drives good decisions

Data is the fuel that drives the profitable multi-channel service strategies, regardless of the purchasing method that shoppers choose. And for a long time now, ecommerce channels have had the advantage of clickstream data to inform decisions about promotions, pricing, product selection and more.

Grocery chains need equally rich sources of real-time data to ensure that their in-store customers have the best and most seamless experience possible. Data about last week’s traffic and sales numbers may be useful for corporate decision-makers, but won’t help address an unexpected surge of shoppers or an out-of-stock issue as it’s happening.

With the help of innovative in-store analytics technologies that collect and analyze “in the moment” data about traffic numbers and shopper behavior in-store, decision-makers can refine their staffing, merchandising, marketing and loss prevention strategies. Accurate metrics captured at entrances and exits, at queues, in the aisles and throughout the store empowers grocery chains to improve performance in the following areas:

At registers – According to a survey of consumers conducted by Retail Systems Research, nearly 20 percent of shoppers will abandon their carts and shop elsewhere if the check out line at the register is too long. This estimate translates into a lot of lost sales. Precise counts of in-store traffic and accurate measurement of individual service times can empower grocers to better manage staff deployment and queue logistics to keep checkout times within an acceptable threshold. When longer-than-usual waits do happen (whether at the holidays, or due to events like an upcoming storm) savvy grocers can even merge in-store analytics with location and mobile technologies (text alerts, for example) so they can better communicate with customers about what to expect.

Promotions and end caps – Are end caps drawing customers into the aisles? Is the promotion for a new brand of coconut water driving up sales? Brick-and-mortar grocers need to make the most of every available square foot. But since there’s no digital trail left by shoppers in the real world, how do grocers know if the valuable real estate given over to a big display is producing the desired result? Positioned in aisles or near end caps, in–store data capture technologies can be used to collect information on dwell times and customer behavior around displays to help grocers understand the impact of promotions and other types of in-store marketing strategies so they can calibrate accordingly.

Inventory management – Is your romaine lettuce looking wilted? Are you running low on Greek yogurt in aisle two? Sometimes information on what a customer didn’t buy is just as valuable as what they ultimately put in their cart. When grocers have real-time information about what’s happening throughout the store (perhaps a lot of customers are picking up the Romaine lettuce and then putting it back on the shelf, for instance) they can keep tabs on product freshness and out of stocks and ensure that inventory operations from back to front are running smoothly.

Bricks and clicks – Combining in-store analytics technologies with mobile and online data offers exciting possibilities for stores serving a growing percentage of multi-channel shoppers. “Click-and-pick up” is one service area that’s already becoming more popular with consumers. Marketers are starting to experiment with location-based promotions that deliver coupons to shoppers while they are at stores. These are just a few of the possibilities. Others include mobile apps that communicate product availability, product location and even open parking spaces, as well as interactive in-store displays that link to online offers and more.    

Online giants Amazon and Google have recently entered into the grocery arena, and Bloomberg Businessweek reports that online’s share of the grocery business could reach 11 percent by 2023. The report goes on to state that real-world grocery chains “should turn brick-and-mortar supermarkets into destinations, offering free samples, good lighting, friendly staff, and a fun, welcoming environment.” The ability of grocery chains to deliver the best experience possible, today and tomorrow, will engender loyalty and keep customers coming through the door. And in-store analytics technologies will give grocers the advantage of insight as they continue to adapt to the multi-channel shopper.