The Grocery industry’s recent recurring theme has been the amount of change created by COVID. The confluence of safety, supply chain and security related issues compressed transformation into a few anxiety-filled years. Notably, it helped enable the grocery industry to essentially complete an entire phase of digitalization. As a result, the era of digitalization in grocery may be essentially over.
Recently released Food Industry Association statistics support this idea. E-commerce is pervasive with over 90% of Grocers selling online. Half of these offer home delivery. Most grocers accept mobile payments (94%) and offer self-checkout (96%). Scan and go technology is either installed or being considered in just over half of stores. Electronic shelf-tag adoption is at 44% and growing fast. Also, over 60% of stores offer Wi-Fi for shoppers.
A decade ago, digital maturity was defined around degrees of instrumentation and interconnectedness. Therefore, by these dimensions, Grocery is reaching a milestone. More than 60% of grocery sales are now “Digitally influenced” and in some retailers’ sales this is much higher. Stores are rapidly becoming full of sensors including cameras, smart shelves and beacons. Fulfilling a previous vision of modernization in a way that is completing a chapter. If this chapter was “digitization,” we are rapidly approaching a chapter which is post-digital.
At Deloitte, we describe this next chapter as the “age of with” — an era where instrumented devices and systems embedded with intelligence and purpose contribute to breakthroughs in commerce and society. And not just interconnected, but also working together alongside our workforce with content, context and ethics. Taken together and at scale, these systems present a powerful new utility which could someday rival the impact of electricity in our lives.
The most profound impact of this new era could come from how grocers harness and deploy these new capabilities to create new kinds of value. Business history has taught us that technology disruption stems not only from doing old things in new, better ways, but industries can be transformed when new value is created or shifts to new places in the ecosystem, challenging traditional value propositions to the demise of traditional players. All of this could have profound implications for traditional “bricks and mortar” Grocers.
In the past, the key elements for success in a Grocer’s value proposition have been location in a community, affordability (cost containment) and product selection. Today many of those advantages are being eroded and value is migrating to new players as the entire shopping journey is replicated on a mobile device.
To fight back, Grocers may need to reconceive of their value in new ways. They could consider extending their ambition from the store to the household — aspiring to be everywhere. Deepening their understanding of their shoppers to become fully aware of their needs and preferences. And redefining their relationship from product selection to a rich array of services to enhance and care about customers’ lives.
In this next era, an entirely new kind of Grocer is emerging. A Grocer who is everywhere, aware and cares is almost “Omniscient.” An Omniscient Grocer knows not just what decisions shoppers make — but why they make them. Not just providing new shopping channels — but shaping traffic to match today’s labor and skills environment. The Omniscient Grocer is not just embracing new technology, but evolving to where value is migrating in the industry and capturing it. As the name implies, an Omniscient Grocer is all-knowing and built on an operating model that is data driven. An Omniscient Grocer conceives of itself as a tech company and aspires to evolve along three simple but profound dimensions — being everywhere, aware of shoppers' needs and “caring” about meeting those needs. Finally, an Omniscient Grocer is a trustworthy grocer. Designed to handle data ethically and making technology, partnering and sourcing choices in service of all stakeholders and the environment.
Becoming “omniscient” is an audacious challenge that will touch every part of a grocery organization. It can inspire the kind of changes required over several years to set traditional grocers on the path for future leadership. Getting there will require shifts across a Grocer’s entire spectrum of operations, platforms and services.
Those that undertake the journey will likely be in the best position to write the next chapter of history for our industry.
From Digital to Omniscience. Over the next few months, we will use this space to share more about what it could mean to become an Omniscient Grocer and welcome your feedback and suggestions on this ambition and transformation journey.
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