Conversations and articles around “the future of retail” are nothing new, but they’ve taken on new life with the entrance of Amazon's Go concept and the online retailer's recent foray into the brick-and-mortar space. It’s now widely accepted that innovation is crucial to improving the customer experience, staying competitive and unifying commerce in-store and online.
These conversations are important and I appreciate them, but I’ve come to believe our focus should be simpler. Also, we should be asking two key questions: “Who is today’s shopper?” and “Am I offering them a seamless experience?”
Anecdotally, we know online shopping, smartphones and evolving social values make the retail customer of 2017 radically different from the one of 1999, or even 2005. Today’s shoppers are smart, tech-savvy and increasingly value-driven, and they expect “an experience,” not just a place to pick up a can of soup, a jug of milk and bread. I call them the “New Choice” shoppers, and survey data prove that they make choices differently from their parents.
A 2017 Nielsen study on product transparency concludes that “the ‘why’ and the ‘how’ have become as important as the product itself.” 73 percent of consumers told Nielsen that they feel positive about brands that share the “why behind the buy.” Further, according to the 2017 DMI “Mobile Maturity Model,” 77 percent of U.S. shoppers have used a smartphone to help them shop.
Satisfying ‘New Choice’ Shoppers
The key to satisfying these shoppers is to provide them with a seamless and enjoyable experience, in which there are no snags, irritations or roadblocks. To this end, there are both positive and negative factors to address: customer interest in prepared meals is increasing (this is exciting), the center store experience is ripe for revitalization, and long lines at checkout continue to impact customer satisfaction.
In the end, customers don’t care about “industry solutions”; they want a great shopping experience, and retailers that can satisfy them will win big.
This is why an innovation in packaging, label and barcode technology promises to improve the customer experience at every touchpoint, whether it’s in the perimeter departments, the front end or the center store. I like to call this the “Fresh, Front and Center” approach.
The store perimeter is on the rise. Customers want fresh prepared meals, a variety of cheeses from around the world and organic produce. Sales in this area, known as the “fresh” part of grocery stores, were 2.7 times greater than the rest of the store over the past four years.
Yet if we dig deep into the fresh departments, we find challenging issues with shrinkage and product labels that create delays at the front end. Nearly all of the items in the fresh departments rely on retail labels. If we consider, for instance, lunch salads in clamshell packaging, the label often gets wet, torn or wrinkled, and is sometimes affixed to the container’s seam or on the bottom, all of which makes it hard for a checker to get a barcode scan at checkout, creating inefficiencies and impacting customer satisfaction.
Also with fresh items, retailers suffer high shrinkage by having to toss out soon-to-be-expired food, because they don’t have the manpower to identify these items, and label them as discounted items.
Yet with new barcode technology, retailers can print labels that successfully scan regardless of how damaged they are, as well as offering stores the ability to dynamically adjust the pricing based on expiration dates, thereby giving customers the opportunity to get the items at lower prices.
Easier Front End Experience
According to the Capgemini Group, a major IT consulting company based in Paris, 32 percent of global shoppers said that shopping isn’t just unpleasant, but also as bad as washing dirty dishes. There are many reasons for this, but long lines at checkout is a big culprit.
At its core, this is a customer experience problem, and retailers usually focus on how to make checkout “faster,” when in fact the important task is to make it easier. When a checker has an easier time getting a barcode to scan on a package or clamshell package, lines move more efficiently, and the customer experience improves.
The same barcode technology that helps in the fresh sections is applicable to product packaging in all parts of the store. Rochester, N.Y.-based Wegmans Food Markets uses the technology for its private-brand products, and one Northwest retailer, Portland, Ore.-based New Seasons Market, relies on it to promote easy checkout and free up cashiers for more meaningful conversations with customers.
Return to the Center
The center of a grocery store is facing some stiff competitive pressures. A 2017 Nielsen study notes a “preference for ecommerce is shifting volume, especially in pet, beauty and general merchandise, which are all found in the center store aisles.”
Customers are buying pet food and shampoo online, and choosing pre-made pasta dinners in the fresh departments, instead of purchasing sauce, rigatoni and ground beef, and doing it themselves.
One way for brands and retailers (with their private brands) to reach "New Choice" customers is by offering convenient, informative and transparent brand content via packaging or shelf-edge tags. Making it easy for customers to scan a package or a shelf edge to instantly access digital product information promotes transparency, which studies show increases brand loyalty and engagement.
On the operational side, shelf-edge tags with a digital identity help retailers better manage inventory.
The Connected Store
The "New Choice" shopper has expectations at every touchpoint in the store. The days of patching together a series of fragmented retail solutions are over. Connected retailing -- providing packages and labels with a machine-readable identity -- is the most efficient and cost-effective way to “wire up” the store. Advanced barcodes are the simplest way for a retailer to make sure its “Fresh, Front and Center” operations offer a seamless and enjoyable experience for the customer.
To take this theme one-step further, “fresh” ideas are exactly what today’s "New Choice" shoppers are expecting. They don’t want their parents’ shopping experience; they expect retail to be as digital-savvy, efficient and convenient as the buying experience in all other spheres of their lives.
The good news is that the connected store isn't a future proposition, but available right now.