Food Retailing’s Digital Future Is Filled With Hybrid Shoppers
The great unsettled question facing food retailers amid a lingering pandemic is, what lies beyond? The next normal has proved difficult to assess, partly because the pandemic has yet to fully release its grip, while at the same time fast-moving technology is affecting every aspect of food retailing.
So what’s a grocer to do? How does one serve today’s shoppers who are still grappling with pandemic concerns, while positioning a business for future growth on the shifting sands of uncertainty?
That’s Rob Weisberg’s job. As SVP of e-commerce, technology and services at Winston-Salem, N.C.-based Inmar Intelligence, Weisberg helps retailers and CPG companies look around the corner to understand what lies beyond, especially as it relates to the coming wave of technological transformation. Weisberg and his team at Inmar see several macro-trends coming out of the pandemic, some well understood and others less so. For example, he talks about the concept of hybrid shoppers, individualization and wellness. Transformation in each area is driven by the adoption and application of technology that has lagged compared with other industries.
“The retail grocery space has been in the dark ages when it comes to technology adoption,” Weisberg asserts. “For some, a point-of-sale system was the major tech adoption of the past 25 years.” That’s a harsh assessment, and obviously, retailers vary widely in their levels of sophistication, but Weisberg contends, “The retail grocery space is ripe for innovation right now.”
A key reason for this is that the pandemic lit a fire of change under everyone involved in retail grocery. Organizations that were earlier adopters of technology fared better, but the pandemic caught some grocers flat-footed, prompting them to say, as Weisberg notes, “My customers are afraid to come into the store. What do I do?”
Been There, Done That
The world of grocery is one of the last major industries to feel the same type of disruptive effects of technology that have transformed other sectors. That’s what drew Weisberg to Inmar roughly a year ago.
“I like going into industries that have been slower to technology adoption, to help revolutionize those industries,” Weisberg says.
A glance at Weisberg’s background reveals what he means. He was previously CEO of Boston-based Invaluable, an online marketplace for fine art, antiques and collectibles. Prior to that, he was chief marketing officer at Boston-based Zipcar, the car-sharing company acquired by Avis-Budget Group. And before that, he was VP of multimedia and marketing at Ann Arbor, Mich.-based Domino’s Pizza.
Weisberg may not be a veteran grocer, but that also means he isn’t encumbered by legacy points of view that can hinder innovation. Further, as Weisberg observes, “e-commerce is a transferable skill, and at its core, Inmar is a data company because of the deep relationships we have with grocers that give us visibility into shopper behavior.”
It’s that visibility, as well as the abundance of data it yields, that has Weisberg excited about being part of the next wave of transformation in grocery. He sees similarities to other sectors where he was part of transformative change, whether it was art auctions, car sharing or pizza delivery. In each case, those sectors relied on outdated processes and methods of serving shoppers, and were ripe for new approaches.
What to Expect in E-Grocery
The pandemic has had a profound effect on shopper behavior, but now what? To find out, Winston-Salem, N.C.-based Inmar Intelligence surveyed 1,000 shoppers and uncovered surprising new patterns of behavior and future shifts. For example:
- 28% of shoppers say that they won’t return to in-store grocery shopping following widespread vaccine availability, because they find online shopping so much easier.
- 39% of shoppers do 75% of their grocery shopping in-store, and only 19% solely shop online for all of their groceries.
- Although 86% say that they’ll return to in-store grocery shopping, 14% say that they won’t because they won’t feel safe or don’t have the time to go to stores.
- 25% of shoppers do 75% of their grocery shopping via a mobile device/app.
- 20% do all of their grocery shopping via a mobile device/app.
- 35% say that online shopping offers a faster product selection and checkout process.
“When I was at Domino’s and proposed online ordering for the pizza category, people laughed at me,” Weisberg recounts. Digitally enabled orders now account for well over half of Domino’s business, and CEO Patrick Doyle refers to Domino’s as a tech company that just happens to sell pizza.
At Zipcar, the goal was to create a mobile-first, completely digital experience that streamlined some of the more unpleasant aspects of purchasing transportation.
“Who enjoys going up to the rental car counter and being pushed to buy insurance?” Weisberg says. “At Zipcar, your entire relationship can be digital.”
For its part, the auction industry was even further behind the digital adoption curve than grocery, relying on a system of gestures and paddles at a physical auction location.
“The biggest technology adoption of the past 25 years in the auction industry was they allowed phones into the room so a clerk could raise a paddle for you,” Weisberg says. That approach wasn’t scalable, so Invaluable leveraged technology to create new digital engagement methods that opened auctions up to a global audience, benefiting buyers, the auction house and consignors.
Grocery Is Different
Grocery is going through a great transformation currently, in terms of technology enabling shopper behavior, how brands engage shoppers and how retailers operate. The pandemic forced the migration of shoppers to digital buying channels at an unprecedented rate. As a result, roughly half of grocery shoppers are what Weisberg calls “hybrid shoppers.” They make purchases online and in-store, which makes them of extreme value to the retailers who earn their loyalty.
Key to earning that loyalty is personalization, or what Weisberg describes as “individualization.” Shoppers are sharing more and more data about themselves and their households with retailers — every transaction, every basket, every click, every coupon redemption, every loyalty program engagement, every credit card swipe, every survey are supplying retailers with valuable data on each unique consumer’s declared or inferred preferences, according to Weisberg.
The data allows retailers to consider the individual customer’s dietary preferences, household routines, meal occasions and lifestyle. In return for their data, shoppers want grocers to provide tailored offers, product suggestions, recipes and information based on their buying patterns — essentially a store or circular designed just for each shopper. Today, retailers no longer have to rely on the hit-and-miss aspect of a one-size-fits-all environment, but can make solid recommendations based on household demographics and past buying behaviors across channels.
“If you show a product with gluten to someone with celiac, it’s a wasted impression,” Weisberg observes, “but with more accurate data, brands can stop throwing away marketing dollars on something a specific shopper will never consume. From the media to the circular to the site, data means that every touchpoint is oriented toward defining a customer’s needs as an individual, remembering those insights and presenting the information in a scalable fashion that meets their complex preferences.”
If there’s one thing grocers understand it’s expense control. So the prospect of eliminating marketing waste while growing sales makes a compelling case for greater adoption of technology. It also gives retailers a thread of steel throughout their efforts.
“Thread of steel is a concept that came out of the technology world, but in retail, it is an undeniable record of the media dollar that is being spent and the transaction and being able to track the user behavior, that thread of steel, throughout the journey,” Weisberg explains. “The holy grail of marketing is for every dollar you spend, to be able to track exactly what happens. Because Inmar is integrated into a retailer’s POS system, e-commerce site, mobile app and loyalty card program, we can tell if a media impression was received and whether it results in the subsequent desired behavior, which is to make a transaction.”
