TopShelf Spotlight: How Tech is Shaping Grocery News in 2024
Technology is reshaping industries across every sector. But in the grocery industry, this transformation seems all-encompassing.
The greater use of grocery tech is not only changing the services grocery retailers offer their customers, it’s also shaping industry news and influencing every aspect of grocery shopper behavior.
In the latest episode of TopShelf Spotlight, Mark Fairhurst, Chief Growth Officer at Mercatus, is joined by David Bishop, Partner at Brick Meets Click, to explore this dynamic in detail. David’s analysis of recent grocery news and insights into consumer behavior provide a throughline, showing how several disparate aspects of the grocery industry are changing with the increasing integration of technology.
To learn more about how grocery retailers are responding to these changes and how overall industry trends and news are affected by their response, keep reading below.
A Win For Third-party Providers
The California Supreme Court’s decision to uphold Prop 22, allowing tech companies like Uber and DoorDash to treat delivery workers as independent contractors, has significant implications for the retail sector.
The ruling supports third-party delivery providers that have provided many grocery retailers with the means to quickly answer demand for online grocery delivery without the time and investment required to develop their own eGrocery infrastructure.
Allowing these companies to maintain flexibility in their workforce affirms the tech-enabled business model of third-party providers, but this issue is far from settled. Further legislation at both the state and municipal level across the country will continue to challenge the long-term future of this aspect of the gig economy.
What Attracts Loyalty Program Members?
With a recent 15% increase in loyalty program members, Albertsons has been seen as an example of what happens when technology is used to streamline points accumulation and rewards redemption for users.
However, the increase in active members also correlates to the supermarket chain’s promotional efforts around the membership plan, including a seamless sign up process.
Leaning on tech to simplify how members accumulate and redeem points can certainly drive engagement and growth for a user-friendly loyalty program. However, such improvements have to be effectively communicated to potential users. It’s not enough to merely remove friction in the loyalty process, grocers also have to also make it easier for customers to sign up and participate.
It’s all part of building a loyalty program that delivers customer retention and long-term value, rather than a one-and-done transaction.
Why Do We Shop Where We Shop?
As mass merchants and large retailers take an increasing share of the grocery market, value is consistently mentioned as the determining consumer driver. But there’s more going on here.
There is a growing reliance on online shopping for its convenience. Just as with in-person shopping, proximity remains a crucial factor in this process, as many consumers prefer stores close to home. Product quality, particularly in fresh and prepared foods, also significantly influences store choice.
Certainly, per product pricing plays a large role, but its importance varies among consumer segments. Some shoppers prioritize deals and discounts, while others are drawn to high-quality products even at a higher price.
Meanwhile, other customers are drawn to the assurance that the item they want is available in stock.
The Influence of Real-time Inventory Visibility
Real-time inventory visibility in mobile apps is emerging as another important factor in grocery shopping, both online and in-store.
Shoppers use their grocery apps to check stock levels before visiting stores, ensuring that their desired items are available. This feature can drive store visits and enhance customer satisfaction by reducing wasted trips.
However, inaccuracies in inventory data can lead to frustration and abandoned carts. Retailers that effectively manage and communicate inventory levels can gain a competitive edge by meeting customer expectations consistently.
Three Strategic Recommendations
As technology becomes more deeply integrated into the grocery industry, it affects numerous facets of operations and consumer interactions.
That means grocers must stay increasingly aware of tech-driven changes, be ready to seek expert guidance for adapting to these shifts, and also understand the full impact of introducing technology on consumer behavior.
Here are three specific recommendations for regional grocers related to that process:
1. Be Aware of Local Legislation
Understanding how local legislation affects third-party delivery partners is crucial for regional grocers.
As seen with the California Supreme Court’s decision on Prop 22, the regulatory environment can significantly impact the flexibility and cost-effectiveness of using third-party providers.
With multiple other regions across the country all considering legislation around the gig economy, grocers must weigh the benefits—an instant eCommerce solution with immediate access to a vast customer base—and risks—lack of control over customer experience, potential changes in legislation that could affect their operations and costs—of relying on delivery partners.
2. Find a Tech Partner, Not Just a Tech Provider
Choosing a technology partner who offers more than just software is essential, not only for the successful integration and utilization of new tools but also the marketing and communication of new capabilities to customers.
As we see with the new members joining the updated loyalty program from Albertsons, technology is often only as good as the user. An investment in tech should come with a plan to train staff, educate consumers, and market new tech-based benefits.
Yes, that process begins with a seamless sign-up process, but it is continued with the guidance of a technology partner experienced in ensuring the benefits of its technological solution are fully communicated to and appreciated by customers.
After all, a loyalty program has to deliver customer loyalty; not just good sign-up numbers.
3. Add Transparency to Your Value Proposition
Accurate real-time inventory visibility is crucial for enhancing the customer experience.
While that visibility is often communicated through a mobile shopping app, consumers rely on these updates to plan their store visits and avoid wasted trips. Ensuring that inventory data is precise helps avoid customer frustration and build trust in a grocer’s reliability.
Transparent communication about stock levels improves customer satisfaction and loyalty, but it’s the accuracy of that information that provides a competitive edge in the market.
10 Action Steps Based on the Latest Grocery Industry News:
- Evaluate the long-term viability of relying on third-party delivery providers.
- Market the benefits of new tech capabilities clearly to your customers.
- Train staff on new technology to ensure smooth implementation.
- Target customer lifetime value with loyalty programs, not just the customer’s next transaction.
- Implement advanced inventory management systems that provide real-time, accurate visibility to customers.
- Be prepared for customers to use a mobile app’s online features in-store.
- Integrate online and in-store shopping experiences through mobile apps to offer features like navigation aids and instant coupon redemption—in addition to real-time stock checks.
- Understand that value isn’t the only consumer driver.
- Make your grocery business the #1 local choice by emphasizing the proximity of your stores, local produce, overall product quality, and availability of prepared foods.
- Stay tuned for the upcoming release of the next Brick Meets Click Market Share Report, with insights into how Walmart is seeking to expand its market share.
Final Thoughts
As technology continues to shape the industry, grocers must leverage innovative solutions to adapt to new trends.
This requires more than merely selecting a software solution and pressing a “go” button. It’s an ongoing process that requires attention.
If there’s one thing this month’s TopShelf Spotlight discussion between Mark Fairhurst and David Bishop reveals, it’s the importance of awareness. Grocers need to be keenly aware of what tech-driven news and trends are going to affect customer interactions and operational costs.
Technology isn’t just influencing consumer behavior or changing the capabilities of a grocer’s service offering. It’s affecting court decisions, shifting traditional strategies, and altering every aspect of the industry.
For those prepared, that’s an exciting prospect. The innovative solutions that technology provides are capable of leveling the playing field for grocers in this competitive market and providing you with a unique value proposition that your biggest competition can’t match.
If you’re interested in ensuring your grocery business is news-ready and trend-proof, or if you have any questions related to the news covered in this month’s episode, don’t hesitate to reach out to us.
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