SPECIAL REPORT: Envisioning the Store of the Future

As grocers fight to capture market share in an increasingly competitive playing field, having powerful capabilities that can optimize key drivers of success will be crucial to prolonged, profitable growth. The future of the grocery store will be shaped by four disruptive imperatives — workforce, sustainability, customer experience and omnichannel — each of which should be carefully considered when making investment decisions and forward-looking plans.WorkforceWhile the role of front-line associates in food retail hasn’t fundamentally changed since the industry’s inception, the environment in which they function has been irrevocably altered over the past several years. From a pandemic to increased workplace violence and changing consumer attitudes, the grocery store as a workplace is evolving and will only continue to do so.With associates perennially focused on getting their work done safely and efficiently while also providing an exceptional guest experience, certain considerations must be taken into account when hiring, training, reducing churn and keeping workers happy, both now and in the future.[RELATED: Behind Kroger’s Proactive Approach to Workplace Safety]“The important question I think we need to ask ourselves is if we’ve been effectively providing the right kind of support and the right kind of training over the years to enable the current generation of food retail workers,” explains JD Dillon, chief learning architect at AI-powered training provider Axonify, based in Waterloo, Ontario.According to Dillon, ensuring front-line associates are comfortable, capable and confident is one of the keys to creating a strong, unified workforce. He stresses making sure that each employee has everything they need, from day one on the job, including small details like where they go to get their schedule, to training that keeps them truly engaged.Looking to the future, Dillon also emphasizes the importance of enabling associates to deal with the unexpected parts of their work. “I find that we’re not nearly as good at making sure front-line associates have the knowledge and the skill and the support needed to handle the things they’re not expected to face every day or they don’t face as often,” he says.In terms of training, that could mean using techniques such as micro-learning with short-form content that focuses on very specific knowledge and skill requirements. That should also be followed up with reinforcement training in which people practice applying what they’ve learned, instead of being forced to remember everything at one time. More importantly, Dillon says that managers are another key to making sure front-line associates are set up for success. “The best investment any retailer can make in improving the front-line employee experience and boosting performance within stores and distribution centers is making sure that every associate has a capable, available manager,” he asserts.With research showing that front-line associates are more likely to stay with their company because they like the people they work with and because they trust their manager, Dillon believes this item is non-negotiable. “[W]e just can’t get anything done on the front line if we don’t invest in managers,” he says.SustainabilitySustainable business practices have become table stakes for grocers of all shapes and sizes in recent years, and that momentum is only going to continue to grow. New efficiencies in sustainability are being unlocked every day, thanks to advancements in technology, and forward-thinking companies are continuing to put their best minds to work considering how sustainability initiatives can help them become both more profitable and more eco-friendly.With customers scrutinizing companies more closely when it comes to their sustainability practices — how they plan to reduce greenhouse-gas emissions, their carbon footprint and so much more — the time has never been better to look to the future of sustainability.Karin Witton, global sustainability director at Atlanta-based reusable plastic packaging company Tosca, believes that digitization is one of the keys to capturing the right data to better understand the goods that grocers sell and to help them make decisions regarding quality and sustainability. “Digital solutions are the way forward,” asserts Witton.“If you know where things are coming from and you know how long they’ve been in transit, what they’ve been exposed to in terms of temperature, shock or humidity, that really helps a retailer know more around stock rotation,” she goes on to explain. “[You know] what comes in, what has to go on the shelf quickest in order to reduce losses, which is a cost issue but also is an environmental issue, because avoiding food waste is very, very important.”Traceability will also continue to be a vital part of the sustainability equation, whether that’s in the form of QR codes, RFID, Internet of Things-enabled devices, or otherwise. “Traceability is important, not just from the quality perspective, but in terms of food safety and recalls,” notes Witton.[RELATED: How Traceability Shortcuts Can Prove Costly to Food Safety]She also espouses the concept of single handling of goods when it comes to the future of sustainability at food retail. Fewer touchpoints on a single product can be imperative to avoiding damage, prolonging shelf life, and ultimately avoiding costly, unwanted food waste that could otherwise end up in a landfill.Tomatoes, for example, often go through up to 12 distinct touchpoints on their journey from field to store, increasing the possibility of damage or product loss. Automation covering processes like washing, packing and labeling could aid in this journey, Witton believes.Customer ExperienceOne thing that’s guaranteed never to go out of style at food retail is striving to create an optimal customer experience. Shoppers now have, and will continue to have, more options than ever when it comes to choosing where to purchase their groceries, and making a positive impact both online and in brick-and-mortar stores remains vital.Bill Gray, president of Alpharetta, Ga.-based Givex Rewards, believes that the future of customer experience and engagement lies in the marriage of rewards and loyalty. “They’ve been around forever, and I think they’re going to continue to be around,” observes Gray. “But what’s changing now is getting rewards more personalized, and the retailer being more in touch with the shopper and knowing what they want next.”Analytics, data mining, first-person data, third-person data and other forms of technology will all continue to be imperative when getting to know shoppers and giving them exactly what they want, when they want it. Loyalty programs can help drive this data and knowledge, while rewards add to the customer experience, as well as encouraging repeat visits. [RELATED: Consumers Expect More Out of Loyalty Programs]Another avenue to consider when looking at the future of customer experience is subscription programs, such as Walmart+ or Kroger Boost, which can help food retailers of all sizes extend their physical aisles out into the internet and offer shoppers access to better deals and products. Grocers that adopt this strategy will have the ability to sell non-standard grocery products, ethnic items, and more, and also offer better deals on larger product sizes. Gray believes that the technology and supply chains of the future will help aid the frictionless adoption of these programs. When it comes to driving a positive online customer experience, Gray stresses the need to reduce friction and make shopping a truly seamless journey. “It’s just making it easier and staying ahead of the competition,” he says.“You’ve got to make it easier because the competitor down the street is going to be making it easier,” continues Gray. “They’re going to be putting relevant deals in front of the shoppers, and if you’re not doing it, you’re out of the game.”Technology enhancements like smart carts, electronic shelf labels, and more can enhance the in-store shopping experience, but at the end of the day, customer experience could come down to very simple terms, such as grocers having the same products that their competitors have, as well as keeping customer service at the forefront of operations. OmnichannelOmnichannel has become a catch-all phrase in recent years, but there’s no doubt about the fact that getting it right now and in the future will be a game-changer for food retailers. Physical retail is stronger than ever, and online shopping, while not meeting the heights it was expected to, has become an integral part of the grocery business. As such, adapting the physical store to enhance the omnichannel experience can often be a boon for grocers. Ethan Chernofsky, SVP of marketing at Santa Cruz, Calif.-based Placer.ai, explains that brick-and-mortar locations can act as fulfillment centers that enable faster delivery speeds, but they can also do so much more in terms of creating bigger baskets, upselling and the like. “Can we create an omnichannel experience where a visit to the store actually allows me to increase my basket size once I get there?” asks Chernofsky. “Can we think about creating triggers in the store experience that allow me to do things online?”When buying paper towels in-store, for example, Chernofsky points to an example where the grocer allows the customer to sign up for a push notification via mobile phone or email in two weeks when they’re likely ready to buy more, and then have those paper towels delivered directly to their home. “These are the things that we want to really focus on, making sure that the experiences that we’re willing to invest in work in the short term, but also in the long term,” he explains. Another major consideration for successful omnichannel operations will be taking a hard look at what role digital and physical play in individual sectors of the grocery business. Canned and boxed goods are easily purchased online, for example, while many shoppers still prefer to purchase products like fruits and vegetables, meat, and fish in-store. While doing so might seem like an easy lift, getting the mix right can be massively important.“It doesn’t mean you don’t want to facilitate it, but you want to recognize where the advantages are that you bring to the table, and then maximize those advantages, because that’s what’s going to leave the customer happiest in the end,” counsels Chernofsky. “And it’s going to allow you to deliver the best service that’s ultimately profitable and that accommodates that win-win.”

SPECIAL REPORT: Envisioning the Store of the Future

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