SPECIAL REPORT: 2024 Grocery Tech Trends

Any retailer who’s been studying the habits and preferences of emerging generations of shoppers knows that technology will play a key role in how these consumers buy groceries. But even as apps become more advanced and new tools continue to improve the shopping experience, tomorrow’s consumers will still look for a human element as they navigate the aisles. That’s one of the major findings in Progressive Grocer’s second annual Grocery Tech Trends Study, which includes results from both retailer and shopper surveys.This dilemma is currently being played out across the country as major chains like Walmart retool their self-checkout strategies, and both large and small grocers cautiously introduce smart carts while having employees nearby for guidance, all in the name of a better shopping experience.[RELATED: How Tech Is Fueling Growth at Walmart]To be sure, PG’s study finds that trends such as smart carts, electronic shelf labels and frictionless checkout are all gaining ground in-store, while online ordering – primarily through delivery – continues to grow. Yet plenty of shoppers report frustrations with their experiences, especially when a product is out of stock or they can’t find help to resolve issues.Other key findings from the 2024 edition include the following:While inflation remains a top-of-mind issue for retailers, 66% plan to increase their tech spending in the year ahead and are prioritizing employee-related tools, demand forecasting and contactless payment.Inflation-wary customers still appreciate the savings that can come from technology, and retailers recognize this as a highly valued offering.Consumers’ top pain point both online and in-store is out-of-stocks, and unfortunately, it seems that grocers haven’t made significant improvements in the online experience versus a year ago.Many shoppers are curious about how new technology such as smart carts and digital shelves can improve their experience, and their interest actually seems to outweigh the amount of technology that’s current availability in their favorite stores – so retailers have plenty of work to do in terms of implementation.In-Store ExperienceAn impressive 77% of shoppers say that they’re open to trying new grocery tech (over-indexing were Millennials, at 87%, and Gen Z, at 84%), while 72% generally enjoy the in-store shopping experience – which is all good news for retailers. Younger shoppers are more likely than Boomers to agree that new tech has made grocery shopping easier. When it comes to specific applications, shoppers report being most interested in tools designed to make the in-store experience more efficient, so new gadgets like smart carts, digital shelves, smart vending machines and electronic shelf labels definitely pique their interest. An impressive 64% say that they’d be willing to try smart carts (only 9% current use these regularly or occasionally).Newer pre-trip technologies that shoppers seem most willing to try include recipe/meal-planning apps (37%), in-store QR codes (36%), shopping list apps (35%), and shoppable videos (34%).Compared with last year, new tools like voice-enabled technology and in-store robots are viewed more favorably. Additionally, being ever mindful of lingering inflation and budget concerns, consumers continue to use and appreciate technology that provides incentives and savings, such as digital coupons and loyalty programs. In fact, 52% cite “more digital discount offers/promotions” as the most valued technology that their store could add in the next 12 to 18 months. Meanwhile, one-third say that they’re willing to try cash-back reward programs like Ibotta and Shopkick. Retailers should take note of this and would be smart to work strategically and creatively to deliver better value experiences for their shoppers, both in-store and online.Self-checkout kiosks remain the most preferred checkout method, particularly among younger shoppers, while mobile app contactless payment has gained usage considerably from last year (52% say that they use it regularly in this year’s survey, compared with 46% last year).A few shoppers offer some innovative ideas of their own about how grocers could enhance the in-store experience. One respondent suggests offering an app with real-time updates for freshly made items in the store, i.e. “fresh Italian bread just came out of the oven in the bakery.” Another suggests an app that would list products’ ingredients, while several mention alerting shoppers about specials and items on sale while also letting store employees know when a shelf needs to be restocked.[Never miss a story – sign up for Progressive Grocer's FREE Daily newsletter]Despite their resounding enthusiasm for technology, almost half of the shoppers surveyed express concern that tech is replacing humans in grocery stores, and 32% say that they value having a balance of tech and in-store staff.This isn’t surprising, considering shoppers’ top pain points in the store, which include out-of-stocks (48% cite this factor, which is less than in 2023); the checkout experience (35%, up slightly from 2023); not finding what they’re looking for (33%); not enough staff (27%); and lack of product variety and selection (24%).Online Shopping TrendsAlthough most grocery trips are still made in the store, online shopping with delivery is increasing. Forty-three percent of shoppers say that they used online shopping with delivery at least once in the past month, and 52% now use it regularly.Meanwhile, one-third of shoppers are regularly using curbside or in-store pickup, with about half of Gen Z and Millennials using these methods at least once a month.Retailers seem to be squarely on board with these trends: Most of them predict that delivery, ultra-fast delivery and curbside pickup are the online ordering methods that will drive the most e-commerce growth in the next 12 to 18 months.Among the consumers who don’t use online grocery shopping, 73% say that they prefer to pick products themselves in person, and around 40% don’t want items to be substituted or don’t trust the accuracy or quality of products selected. Just over 30% say that prices and fees are too expensive. Retailers might be able to attract these naysayers by offering free trials or other promotions related to online ordering. A head-turning finding in this year’s survey is the percentage of shoppers who cite poor customer service with regard to online shopping as a reason that they don’t use it. Although it’s a small number – 7% had this complaint versus 3% last year – it’s worth noting as retailers look to improve their online shopping experience.As for those who regularly shop online, their top pain points include out-of-stocks (46%), products not selected correctly (28%), products not being high quality (27%), lack of variety/selection (25%), and desired delivery/pickup windows not being available (24%). Compared with last year, a smaller percentage (19%) identify site navigation as a pain point, while 18% mention customer service, which is about the same as last year.[RELATED: Progressive Grocer’s State of Industry Report]On the retailer side, the survey delves into the importance of third-party companies like Instacart in the e-commerce shopping experience. Just over half of retailers (54%) say that it’s either extremely or very important for them to have complete control over the experience, and nearly one in four consider it somewhat important. This will be a key issue to follow in future surveys, especially as Instacart and others expand their roles in grocery e-commerce.Retailers’ Tech PlansThe retail survey portion of PG’s Tech Trends Study unveils some other important findings, particularly when it comes to companies’ investment plans. Two-thirds of retailers (66%) are planning to increase their tech spend in the next 12 to 18 months, with a similar share expecting to invest more or equally as much in implementing new tech solutions. (A third are more focused on replacing and upgrading existing technology.) Almost half are prioritizing back-end tech in stores versus warehouses and distribution centers –18% maintain an equal focus on both – and overall, they’re split between whether to invest more in customer-facing or back-end solutions.For now, retailers’ priorities in back-end tech include employee-related tools such as workforce tech and mobile devices or tablets for in-store managers, as well as anti-theft tech, data security tech, artificial intelligence/machine learning for demand forecasting, mobile app contactless payment and electronic shelf labels. Data analytics technology is one of the technologies currently most implemented by retailers, so it would be smart for them to invest in tech and employee resources specifically for data analysis to support more effective tech investment decisions.Among customer-facing technologies, mobile app contactless payment and in-store digital monitors with ads generate the most interest for future investment, while the categories that are currently implemented the most are online ordering with curbside pickup and/or delivery (80% and 75%, respectively), digital loyalty programs and apps (75%), and in-store QR codes (70%).Turning to emerging technology, digital signage and retail media networks have the highest adoption rates today, with almost half of retailers reporting usage. The buzz around retail media backs up recent research from Bain & Co., which expects retail media to see market growth of 12% annually, potentially reaching $140 billion in market share by 2026. In PG’s survey, 18% of retailers say that they plan to add a retail media network in the next 12 to 18 months, and 20% are interested in learning more.[RELATED: How Albertsons and Hy-Vee Approach Retail Media]Just over a third of retailers would like to know more about electronic shelf labels, and 23% have plans to add this technology in the next year and a half. Other newer technologies that generate high interest include virtual-reality/augmented-reality customer experiences (39% would like to know more), digital shelves (34%), AI-powered employee tools (32%), smart vending machines (30%), in-store robotics (25%), and smart carts, smart labeling and ultra-fast grocery delivery (all at 23%).Retailers were also surveyed about their opinions on tech for crisis management. Most agree that they have solutions available to address product shortages, utility failure and theft. Compared with 2023, significantly more are confident that they have access to tech that could address another health pandemic.Assessing the Digital FutureA growing number of retailers seem to feel confident that their company is well positioned to succeed in the digital future of grocery. An impressive 71% agree with this statement, compared with 65% last year. Among their reasons are forward-thinking leadership, talented employees, a strong tech foundation and a desire for continuous improvement. Clearly, some companies are now making digital leadership a cornerstone of their business. As one respondent notes, “It’s a cultural requirement within our company.” Another offers, “We’re planning the next 25 years of success.”Along those same lines, 68% agree that their company “has the right talent to succeed in the digital future of grocery,” versus 57% last year. A slightly smaller percentage feel confident that their company’s existing front-line workforce can be trained to succeed in the digital environment. Perhaps solution providers can further develop new technology that will help support and educate front-line and corporate employees so that they can further advance their companies’ tech-centric missions going forward.Methodology: The consumer survey portion of Progressive Grocer’s Grocery Tech Trends Study includes responses from 1,009 grocery shoppers who were surveyed between March 14 and 21, 2024. Representatives from multiple generations were included: Gen Z, Millennials, Gen X, Boomers and a small portion of Mature/Silent. The retailer survey portion was fielded April 2-23, 2024 and included responses from more than 40 grocery retailers. Respondents were sourced from PG’s audience and were required to be at least somewhat knowledgeable about their company’s current use of technology and/or future technology strategy.

SPECIAL REPORT: 2024 Grocery Tech Trends

Complete Coverage of Grocery Tech Trends

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