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How to Properly Evaluate Your Grocery Shopping Technology

How to Properly Evaluate Your Grocery Shopping Technology

“Measure what is measurable and make measurable what is not so.”

Spoken more than four centuries ago, it’s unlikely that Galileo was referring to the use of eCommerce technologies in the grocery retail sector. However, the principle of his timeless quote aligns perfectly with a very modern challenge facing today’s grocery stores.

Many retailers aren’t realizing the full value of their investment in omnichannel grocery shopping technology — and it’s the result of not measuring all that it can do.

Because grocery technology tends to be considered solely as a means to facilitate transactions, it’s evaluated based on this one capability. While certainly a critical component, it’s merely scratching the surface of what eCommerce solutions can achieve for grocery stores.

Mercatus eGrocery Technology

The right grocery technology is capable of creating a seamless, integrated customer experience that not only retains but actively engages shoppers, drives operational efficiency, and fosters long-term business growth across all commerce — and yet, these capabilities often remain unrecognized and unmeasured. As a result, the technology itself remains underutilized.

This article aims to change that by:

  1. Providing a better understanding of what eCommerce solutions are capable of achieving; and
  2. Helping grocers take Galileo’s advice and make grocery technology measurable through a guide to several methods for properly evaluating your technology.

By the end, you’ll be on the right path to realizing the full value of your investment.

Grocery Technology That Enables All Commerce is an Important Part of an Omnichannel Retail Strategy

The process begins by reframing a commonly held perspective.

As we mentioned in the introduction, the grocery industry has traditionally looked at eCommerce solutions solely as a transaction facilitator — a digital checkout lane which shoppers go through to buy products.

This viewpoint limits grocery technology to the role of a single tool within retail operations, when it should be considered an integral part of the overarching retail strategy, capable of:

  • Expanding Reach and Accessibility: Customers can access products and product information anytime, anywhere, significantly expanding the retailer’s market reach.
  • Gathering Valuable Data Insights: Online platforms collect detailed customer data, enabling retailers to tailor their strategies more effectively both online and in-store.
  • Enhancing Customer Experience: The tailored strategies derived from data can be used to offer a more engaging customer experience that increases satisfaction and loyalty.
  • Driving Operational Efficiency: Integrated systems can effectively manage inventory, provide order fulfillment more efficiently, streamline operations, and reduce costs.
  • Finding New Revenue Streams: Digital platforms open up retail media opportunities and other digital revenue-generating avenues, diversifying income and enhancing profitability.
  • Fostering Innovation and Agility: The fast-paced nature of online retail compels businesses to adopt the latest technologies, experiment with new marketing techniques, and quickly adapt to changing consumer preferences.

Recognizing the relationship between technology and strategic retail planning outlined above is the first step towards leveraging the full potential of eCommerce platforms.

The second step is gaining a deeper understanding of its capabilities.

Creating a Seamless Shopping Experience

The first such capability we’ll look at is how grocery stores can leverage their eCommerce technology to create a seamless grocery shopping experience.

Why is a seamless shopping experience important?

One of the most important revelations to come out of the most recent eGrocery Performance Benchmarking report, from Brick Meets Click and Mercatus, is that it takes approximately 2.5 to 3.5 new customers to replace the value lost from a single long-term customer shopping elsewhere. This is a cost grocers can’t afford to assume when competing against the increasing market share being taken by larger retailers.

A seamless, integrated shopping experience enhances customer satisfaction to the point of encouraging loyalty and repeat business — while also contributing to more completed purchases.

Here’s how grocery technology provides this experience at every step in the customer journey:

Customer Journey by Technology

Awareness

  • Marketing and Promotions: Even before visiting a grocery store or its website, customers receive personalized recommendations, personalized promotions, emails, or notifications on mobile apps based on their shopping history, alerting them to relevant promotions and new products.

Consideration

  • Intuitive Search and Discovery: On websites or mobile apps, smart search functions and personalized recommendations help shoppers easily find items or discover new products, both online or in-store, that are tailored to their preferences.
  • List Building Tools: Customers can create shopping lists on the retailer’s app, which can also suggest additions based on shopping habits, past purchases, and current deals that can be used online or in-store.

Conversion

  • Real-Time Inventory Updates: As customers shop online, they see real-time inventory levels, ensuring the products they want are available.
  • Seamless Omnichannel Experience: Whether purchasing online for home delivery, click-and-collect, or planning an in-store visit, shoppers experience a consistent look, feel, and offer set across all platforms.
  • Efficient Checkout Process: Online checkout is streamlined with options to pay directly through saved methods, apply coupons automatically, and choose from various fulfillment options.

Fulfillment

  • Flexible Fulfillment Options: After purchase, customers can choose from multiple fulfillment options like same-day delivery, curbside pickup, or in-store pickup, whichever suits their schedule.
  • Dynamic ETA and Tracking: For deliveries, customers receive accurate estimated times of arrival and real-time tracking updates.

Loyalty

  • Loyalty Programs: Integrated loyalty programs reward customers for their purchases and interactions, offering points, discounts, and exclusive deals to encourage repeat business.
  • Feedback Loop: Customers are encouraged to give feedback on their shopping experience, which the grocery store uses to make continuous improvements.
  • Ongoing Communication: The cycle begins anew with personalized communication based on the customer’s latest shopping experience, preferences, and feedback, continually refining the personalization to enhance satisfaction and loyalty.

Delivering Greater Operational Efficiency Across the Grocery Industry

Providing the type of seamless experience outlined above wouldn’t be possible without streamlined operations — and the grocery sector is well-aware of the importance of operational efficiency.Among those surveyed for the recent Supermarket Technology Review, from Informa and Supermarket News in partnership with Mercatus, greater operational efficiency emerged as the most desired outcome from an investment in grocery technology.

When used to its fullest capabilities, eCommerce technology can be used to deliver greater operational efficiency to not only streamline the way grocery retailers operate, but also how you manage your day-to-day activities, through:

  • Automated Inventory Management: eCommerce technology integrates sophisticated inventory management systems that automate tracking and update stock levels in real-time.
  • Data-Driven Forecasting: Leveraging data analytics, eCommerce platforms can predict demand more accurately, aiding in better inventory management, targeted marketing campaigns, and resource allocation.
  • Streamlined Order Fulfillment: From order receipt to picking, packing, and shipping, eCommerce technology automates and optimizes each step of the fulfillment process.
  • Enhanced Supply Chain Visibility: Technology provides a transparent view of supply chains, enabling retailers to track products from supplier to grocery store shelf. This visibility helps in identifying bottlenecks, optimizing logistics, and reducing transportation costs.
  • Digital Workforce Management: Scheduling, task management, and employee communication are streamlined through digital tools, improving staff productivity and ensuring the right resources are in the right place at the right time.
  • Self-Service Platforms: By offering self-service options for customers (such as FAQs, chatbots, and automated returns processing), businesses can reduce the workload on customer service teams while still providing timely and effective support.
  • Centralized Platform Integration: Integrating various business functions (CRM, sales, inventory, and customer support) into a single platform eliminates silos, facilitates smoother communication, and enhances decision-making efficiency.
  • Scalability and Flexibility: Cloud-based eCommerce solutions offer scalability to handle peak shopping periods without the need for significant capital investment in IT infrastructure. This adaptability ensures grocery retailers can grow without compromising operational efficiency.

Fueling Long-Term Growth for Grocery Stores

Scalability and flexibility might be the last point mentioned above, but it's certainly not the least important.

Investing in eCommerce technology should be viewed as exactly that — an investment. There's no point in grocery chains spending to increase their tech stack if it doesn't ultimately improve their bottom line and pave the path to more growth.While adopting new technology will incur initial costs, that shouldn't deter grocers from leveraging digital solutions to address your challenges.

Fueling Long Term Growth with Technology

The most effective grocery technology not only offers immediate financial offsets, such as retail media revenue, but also provides long-term advantages, including the benefits offered by the two under-utilized capabilities we’ve identified:

Streamlining The Grocery Shopping Experience

  • Enhanced Customer Loyalty: A seamless and satisfying shopping journey increases the likelihood that customers will return. Loyal customers not only contribute to a steady revenue stream but are also more likely to explore a wider range of products and services.
  • Increased Sales Lift: A seamless experience, especially online, reduces barriers to purchase, such as complicated navigation or lengthy checkout processes, leading to higher conversion rates from browsing to buying. Likewise, the customer data collected by grocery technology can also be utilized to increase personalized marketing, which is proven to result in more cart conversions, higher baskets and an overall sales lift.

Improving Operational Efficiency

  • Reduced Operational Costs: Streamlined operations minimize waste and redundancy in processes. By improving the efficiency of inventory management, order fulfillment, and supply chain logistics, businesses significantly lower operational costs.
  • Better Use of Resources: Streamlining operations allows businesses to allocate their human and capital resources more effectively. By automating routine tasks, employees can be redeployed to focus on higher-value activities, minimizing labor costs. Similarly, capital resources can be reallocated from maintaining inventory levels and warehouse space to investing in technology and innovations that further drive competitive advantage and market expansion.

Properly Evaluating Your eGrocery Tech Stack

Now that we've identified what eCommerce solutions are capable of achieving for grocery retailers, let's get into the second objective of this article: properly evaluating its performance. 

Measuring performance is crucial because it directly influences your ability to refine strategies, optimize operations, and ultimately drive the growth that grocery technology can provide.

As a trusted partner to more than 1,800 regional grocery chains and 400 independent stores worldwide, we recommend the following methods to our partners for evaluating the all-in-one eCommerce platform from Mercatus:

3Cs Scorecard

  • Cost, Convenience, and Control: Develop a detailed scorecard that evaluates your tech stack across these critical dimensions. Assess how the technology manages operational costs, enhances customer convenience at every touchpoint, and gives your team control over the eCommerce environment.

KPI Tracking

  • Key Performance Indicators: Focus on tracking vital metrics such as online sales growth, customer retention rates, average order value, and conversion rates. These indicators will offer a clear view of your platform's impact on your business.

Backend Platform Tools

  • Tracking and Monitoring: Monitor the performance of your platform in real-time and at scheduled periods — 30, 60, 90 days after integration. Use the tools provided by the platform to analyze data and swiftly address any issues that arise.
Grocery Fulfillment Technology

Reporting and Insights

  • Data-Driven Strategy Refinement: Make it a routine to review insights and special reports provided by the platform. The data gleaned from these resources is invaluable for refining your marketing strategies and making informed decisions that drive growth and efficiency.

Customer Feedback

  • Listening and Adapting: Pay close attention to customer reviews online and feedback integrated within the app. This direct line to customer sentiments is crucial for making user-driven improvements and enhancing the overall shopping experience.

Ongoing Marketing Activities

  • Promotion and Engagement: Continuously implement and assess the effectiveness of marketing campaigns across channels, including social media, email, and beyond. These activities are key to maintaining engagement and driving traffic to your platform.

Customer Behavior Analysis

  • Understanding and Targeting: Employ analytics tools to dive deep into customer behavior patterns. Use this analysis to develop strategies aimed at increasing customer retention, elevating the average order value, and boosting the number of monthly active users.

Just as increasing your tech stack represents a financial investment in your business, the proper evaluation of that tech stack is a strategic investment in the trajectory of your business's growth — which is the ultimate aim of integrating technology into your operations.

The Benefits of Proper Evaluation for Grocery Retailers

We began this article by claiming that the grocery industry wasn't fully capitalizing on all that eCommerce solutions offer. This is a result of pigeonholing grocery technology and failing to recognize and measure its capabilities beyond that of a transaction facilitator.

Now that we've identified its capabilities and shared the most effective methods for measuring an eCommerce platform, it's time to see what a full evaluation of a fully appreciated eCommerce solution provides:

  • Strategic Digital Transformation: Proper evaluation helps identify areas where technology can better align with business goals, driving a digital transformation that goes beyond the surface level.
  • Enhanced Data Utilization: Through detailed analysis and reporting, retailers can unlock the full potential of their data, turning insights into action. This leads to more personalized customer experiences, improved product recommendations, and more effective inventory management, all of which contribute to increased sales and customer loyalty.
  • Operational Excellence: Evaluating the full capabilities of your eCommerce platform uncovers further opportunities to streamline operations, from order processing to delivery.
  • Customer-Centric Improvements: Feedback and behavior analysis provide a direct line to understanding customer needs and preferences. This information is invaluable for making informed adjustments to the in-store and online shopping experience.
  • Informed Marketing Strategies: By assessing the impact of marketing activities through KPI tracking and customer engagement analysis, retailers can refine their marketing strategies to be more targeted and effective, ensuring better ROI on marketing spend.
  • Competitive Advantage: The ability to swiftly adapt and innovate based on technological capabilities and insights provides a significant edge to regional grocers and independents attempting to win back your market share from the bigger retailers.
  • Sustainable Growth: Ultimately, the insights garnered from a thorough evaluation support sustainable growth strategies. Understanding what works (and what doesn’t) enables retailers to invest wisely in technology that drives long-term success, ensuring you remain competitive with big box stores, mass retailers and national chains.

This is essentially a playbook for how retailers can grow their grocery business. And it’s why we’ve emphasized the importance of evaluating grocery technology based on all of its capabilities — not just one.

Partner with Mercatus to Realize the Full Value of eCommerce Technology

At Mercatus, we know that when performance is measured, performance improves.

That's why our mission goes beyond merely supplying eCommerce software to the grocery industry. We're committed to ensuring our partners realize the full value of their grocery technology investment through a complete understanding of its capabilities — and how to evaluate those capabilities for constant improvement.

Choosing Mercatus is choosing a partner dedicated to helping you succeed, whether it's by exceeding customer expectations with a seamless omnichannel grocery shopping (online or in-store) experience or reducing your cost-to-serve through increased operational efficiency.

We offer the best eCommerce platform, the best support for realizing the full value of your grocery technology investment, and the best methods for measuring its performance. Added together, this provides our partners with an enhanced customer experience, streamlined operations, and elevated profitability for long-term growth, all while equipping you with the advanced tools needed for meticulous performance monitoring and reporting.

We believe in our platform and we want the entire grocery industry to believe in it, too. See firsthand how Mercatus is transforming online grocery shopping to help grocers like you realize the full value of your tech investment by scheduling a tour of our platform, today.

Headshot of Mark Fairhurst

Mark develops global growth strategies for Mercatus and leads the Marketing, Sales, and Customer Experience teams.