Grocery Retail, CPG and Tech Collaborate for the Consumer at Progressive Grocer’s Connected Consumer Summit

Progressive Grocer wrapped up its first Connected Consumer Summit Sept. 10, 2014, confirming the need for an event dedicated to bringing together grocery retailers, CPG marketers and technology companies. The exclusive, invitation-only event featured four keynote presentations, boardroom briefings presented by technology companies, and one-on-one meetings.

The goal of the Connected Consumer Summit was to focus on the topics and issues that will help retailers and CPG companies collaborate more effectively to drive increased store traffic and increased basket size by leveraging digital marketing and media programs.

Peapod ups technical ante with 'Peapod Propulsion Labs'

The program kicked off on Tuesday, Sept. 9, 2014, with a presentation by John Burchard, SVP and CIO/CAO of Peapod, an Ahold company. Burchard gave a refreshingly candid view of the Peapod online grocery business, including the recent unveiling of the company’s new 350,000-square-foot automated warehouse in Jersey City, N.J., which greatly extends the internet retailer's ability to serve the New York City/New Jersey market.

Peapod launched pick-up stations, or PUPs/Peapod Pick-Ups, in 2013, providing a different layer of convenience for shoppers. The company has recently starting charging $2.95 for the service, which had been offered for free.  Peapod operates in Chicago, Milwaukee, Indianapolis, Connecticut, Massachusetts, Rhode Island, Southern New Hampshire, New York, New Jersey, Maryland, Virginia, Washington, D.C., and Philadelphia. Peapod has been a tad more conservative than planned on extending PUPs, but only because, says Burchard, click and collect isn’t for everyone, and the company wants to make sure there’s enough support for sustainability where it's available. Like many others in the industry, Burchard cited the aggressive expansion of the now defunct Webvan as a lesson in why it pays to be a little cautious with expansion. Peapod is profitable in its more mature markets, and is working to get emerging markets to profit before pushing additional expansion.

Peapod's greatest expense is its fleet of 600 trucks, which carry about 20 orders per the twice-daily eight-hour shifts. The company uses UPS Roadnet Technologies’ SmartMile logistics for route planning and transportation management, much as airlines work to ensure each plane is full. The company promotes either a six-hour “green” delivery window, which allows more transportation flexibility, as well as a narrowed two-hour delivery window. Peapod also integrates GPS navigation and text messages to communicate with customers ahead of a stop and at the time of a stop. Peapod has done extensive work integrating proprietary and third-party software to create efficiency and customer engagement, but Burchard says Peapod needs to do more to communicate these initiatives with its customers.

When Peapod recognized it was falling behind on software development, parent company Ahold committed on a significant level. Peapod now has a digital solutions division, which Burchard refers to as Peapod’s Propulsion Lab, in Chicago. Ahold also has a digital district in Boston, which consists of six stores, where digital initiatives can be tested and tweaked before a broader rollout. One example of a work-in-progress is the company’s much-lauded ScanIt technology, where shoppers can scan UPCs as they shop, paying at the end. “But standing in line is no good, and even with ScanIt customers can wait to check out,” says Burchard. One basic challenge is that internal wireless networks aren’t always optimal.

Grocery retail can’t afford to wait to adopt technology

Attendees heard from Chris Surdak, author of Data Crush: How the Information Tidal Wave is Driving New Business Opportunities (AMACOM 2014), and current global subject matter expert for analytics, information governance and e-discovery for HP Autonomy. Surdak not only wowed the audience with examples of recognition technologies currently in place, but also made them squirm a bit by driving home that consumers – everyday people – are one of the biggest “products” driving market capitalization. Companies like Google, Facebook, Yahoo!, Twitter and Microsoft (Bing) spend tens of billions of dollars per year on servers, storage, networking and electricity because they’re selling information – our information.

Once Surdak had attendees’ attention, he turned to the relevant questions to ask of consumers. It used to be “what,” including what customer, what need, what product and what price? Today, “why” is what matters, including why they buy, why they care, and why they stay. Attendees were asked to consider if they were building Business Intelligence (BI) or Big Data. BI is the same analysis, but analyzing more data, it’s also batch/warehouse-type processing and informative, but not really actionable. Big data, on the other hand, is joining data sets never before joined, and asking questions never before asked. It’s real-time, or nearly so, which leads to predictive/persuasive analysis, which in turn drives action, which he terms “action at the speed of insight.”

But there’s a fine line that companies must walk between intimacy (needs anticipation, reverse Grouponing, e-coupons, “liking” and suggestion lists) and creepiness (behavior manipulation, behavior modeling, iCoupons, geo-tracking, cookies). But for those who can successfully navigate, predictive technologies – getting consumers to push “buy” – is working billions of dollars.

Surdak encouraged attendees to not wait to adopt technology as a tool; there’s a first mover advantage, and that even though technology as a tool is huge and daunting, “it’s like eating an elephant,” he said. “Just take it one fork-full at a time… If you are not in this game, you are not in this game.”

Omni-channel means delivering whatever, wherever, and whenever customers want

Lindsay Mikos, senior manager of omni-channel at Walgreens, kicked off the Wednesday session by describing Walgreens’ strategy to provide an integrated and seamless experience for customers across retail stores and digital channels.

Walgreens defines omni-channel as being delivering against whatever, wherever, and whenever customers want. The customer pool includes both 45 million customers weekly and 14 million weekly online visitors.

An overriding goal for the global drug chain is to focus on an ever-changing customer. Mikos identified six key factors that have helped the company address its customers:

• The economy has created permanent value consumers
• Changing consumer lifestyle due to the penetration of digital technology
• Consumerism and the “retailization” of healthcare
• Online retail is booming, and omni-channel is emerging
• Disruptive technologies are emerging at a greater pace
• Regulations impact customers

Customers live in a digital world, she said, and digital channels have now surpassed traditional media, including print and broadcast, as the most used media. But all channels need to work together to speak to the consumer with one voice. One message across many platforms reinforces a company’s core mission, strengthens the core by combining what a company brings to the customer, by way of the tools the customers is most comfortable with, ultimately leading to the right mix of products, at the right prices, with the right promotions, and in the right place. Further, at least for Walgreens, multichannel customers spend three to six times more than store-only customers.

Walgreens is also investing heavily in innovative – but simple for the customer – tools, including its Refill by Scan app that allows the customer to use her smartphone to scan a prescription for a refill. The app also provides refill reminders and even reminders on when to take a particular prescription.

The company has also upped its photo business through mobile technology, allowing people to submit images from their phones for printing. The business has grown from less than 1 percent of print orders in 2010 to 40 percent in 2014.

An important component, says Mikos, is partnering with other providers for the benefit of customers. The company’s loyalty program, Balance Rewards, for example, is integrated with Google Wallet, Passbook and Samsung Wallet. API programs and social media help companies stretch beyond their traditional reach for greater relevance to their customer base.

The CPG partner's role

Connected Consumer Summit’s final keynote address introduced the role of CPG partners in the retail and technology loop. Laura Houghton, director of digital shopper marketing at The Coca-Cola Co., said that while many marketers are tempted to only focus on Millennials, Baby Boomers shouldn’t be overlooked. After all, Boomers are also “leaning in” to change, and consumers’ engagement with offline marketing isn’t going away any time soon.

But the size of the Millennial population, and the future increase in economic power of the Millennial population is why marketers need to get digital right. If manufacturers once led the 44 percent of moms – not just Millennial moms – who made a purchase from their mobile device last week.

Coca-Cola’s currently go-to-market strategy is currently through co-creation and collaboration with other products, services and programs. “We have to make it easy to convert shoppers to buyers in store,” says Houghton. “Then after the store we create a sharing loop” giving shoppers a reason to share out a great experience.  She used the wildly successful Walmart Effortless Meals program as an example. “We’ve made a commitment to talk openly across pain points” and determine how businesses align to address respective pain points in a positive manner.

As an example of post-shop sharing, Houghton shared many of the success stories around the company’s #ShareaCoke/Diet Coke campaign. Social media is abuzz with happy stories of consumers enjoying Coca-Cola products emblazoned with their name.