Live From FMI Midwinter: Delivering Unique Experience is Key to Grocery Retail’s Success

"Software is eating retail" is a rallying cry of retail doomsayers, but there’s some support of the statement, says author and retail prophet Doug Stephens, who addressed grocery industry leaders at FMI Midwinter, in Miami: ecommerce represented $1.2 trillion in transaction sales in 2013, up 19 percent from 2012, with ecommerce estimated to be 30 percent of all spending by 2025.

But Stephens, author of "The Retail Revival: Reimagining Business for the New Age of Consumerism" (Wiley 2013), and self-described "retail prophet," says the more apt statement, and one that represents a call to action, is “software eats average.”

“Commerce will become more natural, more connected, and perhaps more sensorial,” says Stephens, as the number of commerce portals ― in the form of devices ― surges to 50 billion in the coming years, including wearable technology, surfaces, appliances, cars and more. The challenge won’t be buying online, but rather how all these goods get delivered.

Essentially, asserts Stephens, we’re slamming head-on into the end of an era with retail shopping.

• Mass media, once considered measurably effective, has been fragmented into nonexistence.
• Brands and retailers once owned access to products and information on the path to purchase.
• Consumer preferences and tastes were largely homogenous and predictable.
• The physical store was once the primary product distribution mechanism.

Today, the consumer’s path to purchase is circuitous, with input coming from every channel imaginable. Even the selection has changed, with consumers no longer limited to what’s on the shelves at a given retailer. The consumer is in control, says Stephens, and mobile – not necessarily the internet – has changed everything. The old model of telling a brand story, and creating product interest that in turn drove store traffic, has been replaced with consumers’ ability to buy direct through any form of media, from magazines and videos, social media and smart TVs.

Further, consumers themselves are harder to define and address. One-to-one marketing is great, but it’s not possible to try and be all things to all people. Instead, Stephens suggests focusing on similarities among consumers:

• No one likes to wait in line
• No one likes to arrive to find a store closed
• No one likes to see an out-of-stock

Engaged retailers are addressing checkout wait times by creating more payment points, and by using technology to reroute consumer traffic. Kroger, for example, has reduced checklane wait times from more than four minutes to less than 30 seconds.

While not part of grocery retail, interactive screens have been placed in windows of retailers that are closed, allowing customers to have items delivered. Shoppers should have the option of having out-of-stocks shipped to their home. “Use technology to fend off friction,” says Stephens.

To engage shoppers, deliver, or distribute an experience. Experiences in-store should be connected with digital efforts. “The store of the future is less about ‘conversion,’” says Stephens, and more about “converting a brand for life… use stores as the experiential point of differentiation.

“Find the one thing that you can change,” he says. "And leave average out of the game plan."