Shoptalk Recap: In Grocery's Physical-Digital Age, Side with the Shopper

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Shoptalk Recap: In Grocery's Physical-Digital Age, Side with the Shopper

By Randy Hofbauer - 03/28/2018

Above: Brian Cornell, Target CEO: "Our guests don’t want to have to make choices or tradeoffs"

The line between physical and digital in the grocery space continues to blur. And grocers are mistaken if they believe choosing one over the other is the key to winning.

But even the most innovative, up-to-date operator that embraces the blur is destined for failure if the shopper isn’t at the center of every decision it makes. That’s the message many shared at Shoptalk 2018, which took place March 18-21.

In fact, Brian Cornell, CEO of Minneapolis-based Target Corp., made the point a huge part of his keynote on the event’s first day: If a customer want to shop stores, Target has trained its associates and compensates them well to ensure a great experience. If that person wants to order online, Target has ramped up its ecommerce efforts and, though its purchase of Shipt, even uses people who love shopping Target to gather and deliver orders for other Target fans.

“Our guests don’t want to have to make choices or tradeoffs,” he told attendees, noting that Target patrons love to shop and want options. “Our job is to make it easier than ever. Make it more enjoyable. Make it more fun. Ensure every Target trip is worth the trip.”

"AR is going to create opportunities to present an abundance of data in a much easier way to digest for the customer." - Yael Cosset, chief digital officer, Kroger

Yael Cosset, chief digital officer of the Cincinnati-based Kroger Co., echoed the sentiment in an interview during his session at Grocerytalk – a Shoptalk track produced in partnership with Food Marketing Institute – noting that today, grocery retail isn’t about moving focus from brick-and-mortar to ecommerce, or vice versa. Instead, grocers must bring them together to mine new data and insights that, in the end, come back to the customer. He even assured attendees that contrary to popular belief, the faster that grocers adopt ecommerce, the more relevant their physical stores will be.

But customer interactions in each channel still need to be approached differently: When thinking about consumers’ appetite for information, satisfying the appetite online is easy, but not so much in the store, Cosset noted. Grocers must discover how to leverage augmented reality (AR) and mobile devices, giving customers access to a curated set of information.

“AR is going to create opportunities to present an abundance of data in a much easier way to digest for the customer,” he said.

Even in a category such as meal kits, physical and online are proving to rely on one other heavily as services struggle to survive, but the customer is always the focus. In a panel discussion, Kyle Ransford, CEO of El Segundo, Calif.-based meal-kit service Chef’d, noted during Grocerytalk that this year, the physical vertical will be bigger than online this year, as customers don’t look to meal kits as a seven-day-a-week solution and typically are wary of subscriptions.

That’s not to say, however, that online won’t play a critical role: Even though it has struck up partnerships to sell in the stores of such grocers as Gelson’s in Southern California and Tops Markets in the Northeast, Chef’d does a lot of business in small towns where residents might live 20 miles from a Walmart or Whole Foods. So while prepped ingredients and a recipe are the convenience factor for people in more populous areas, delivery is the bigger convenience for folks in remote locations.

Amazon Go VP Gianna Puerini (center) said that retailers looking to employ “just walk out” technology in their stores have to establish a sustainable business model that comes down to the customer

But whether it’s an AR experience in-store or ordering online from the comfort of one’s own home, technology can't be done merely for technology’s sake  – it has to serve the customer. This was especially stressed in a keynote presentation from Gianna Puerini and Dilip Kumar, VPs of one of the most controversial – yet most-watched – new concepts in the market: Amazon Go, the checkout-free convenience store from Seattle-based ecommerce giant Amazon that recently opened to the public, after a long delay, and is said to be planning expansion.

The store, which uses computer vision similar to that in self-driving cars to detect what customers take and charge them for it upon leaving, had problems being able to detect who was taking what when too many people were inside at once. To make the technology truly serve its customers, the team had to address three problems:

  1. The team had to pull off the tech in a way that makes it seamless and effortless.
  2. The concept required algorithms that are beyond state-of-the-art for its computer vision and machine learning to solve problems of who took what. It also required people to shop close to each other to test everything.
  3. The store needed a robust hardware and software infrastructure to support everything.

Puerini added that retailers looking to employ in their stores similar “just walk out” technology have to establish a sustainable business model that comes down to the customer. Grocers must ask themselves:

  • “Who is my customer?”
  • “What can I do to add value to their life?”
  • “What am I uniquely positioned to offer them?”
  • “If I’m not offering something unique, am I willing to build, buy or go another route to offer it?”

Unlike how many grocers today view it, technology isn't ultimately a sales tool, Amin Maredia, CEO of Phoenix-based Sprouts Farmers Market, said in his Grocerytalk presentation. Instead, it's a solution that simplifies the customer experience. And going forward, as they marry both the physical and the digital, grocers need to understand this truth.

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