How Smart Store Tech is Transforming Food Retailing

Scott Langdoc, Head of Worldwide Strategy and Thought Leadership for Grocery Chain, Drug, and Convenience/Fuel Retailing, Amazon Web Services (AWS) and Joanne Joliet, Head of Worldwide Fashion & Apparel at AWS

As the grocery industry tackles dramatic shifts in shopper behavior, broad changes in product assortments, and huge growth in digital orders, innovative retailers are responding with laser-focused, technology-centric customer experience initiatives, particularly within their physical stores. With solutions focused on optimizing shopper engagement, retailers can make long retail checkout lines and other in-store bottlenecks a thing of the past.

The first step is looking at some of the most common pain points customers experience while shopping in physical stores, such as long checkout lines, out-of-stock SKUs, difficulty locating products, lack of help, and little to no product information. These frustrations don’t impact customers as much when they are shopping online, as there’s never a checkout line, search engines make finding items easy, product details are readily available, and immediate help is a chat window away.

The technology-based conveniences of digital grocery shopping can raise the bar for customer expectations across every retailer touchpoint, including the in-store experience. Below are five smart store enhancements grocers can use to address some of the most common customer pain points and transform brick-and-mortar shopping from a task to a treat.

  1. In-Store Frictionless Payments:Waiting in slow, inefficient checkout lines is frustrating and can sour an otherwise great shopping experience. One way to prevent customer frustration is by removing friction from throughout the transaction. In the grocery, convenience, and drug store segments, we’ve seen retailers like Amazon launch new formats such as Amazon Go and new devices such as Amazon Dash Cart that deliver the convenience of selecting items and walking out without having to wait in any traditional queues. Exxon Mobil has also taken steps to eliminate friction from the process of buying fuel at the dispenser. Customers can now use their mobile app or vehicle’s Alexa-enabled voice recognition functionality to authorize a pump and complete payment simply by saying, “Alexa, pay for gas.”

Mobile checkoutis another innovation that’s gaining traction in other areas of retail, but has value for forward-thinking grocers looking to improve the customer experience. In the apparel space, Nike, which has always been at the forefront of innovative customer experiences, uses a mobile app feature called ‘Instant Checkout’ to enable in-store shoppers to pick up an item, scan it with the Nike app, and pay for it with their saved credit card. That “no lines, no waiting” offering would be a hit with customers who find themselves frequently popping into the grocery store for only a handful of items on their way home from work.

  • Personalized Interactions: With online shopping, a retailer can see every click the customer makes, how long they look at an item, and whether they select or abandon a product. The online experience provides rich visibility into customer preferences and behaviours, allowing retailers to harvest data to curate personalized experiences. With many consumers now shopping via connected apps, websites, and in person, grocers have the opportunity to use the data they curate via online interactions to improve the in-store shopping experience in real-time while creating greater interest in new items.

Lotte Mart, a Korean hypermarket, uses Amazon Personalize inside their app to offer personalized recommendations as in-store coupons to frequent customers that drive increased engagement, higher purchase rates of new products, and ultimately more valuable customer loyalty.

  • Where Digital meets Physical:  Grocers have seen digital order volumes skyrocket since the start of the pandemic and many are trying to optimize workflows for in-store product picking and curbside/delivery fulfillment to lessen impact on traditional shoppers. For example Co-op, a UK-based grocery and convenience retailer, is using technology solutions from Naveo Commerce and Bringg to reduce the time necessary to find and pick items for digital orders and manage the orchestration of getting the right online orders to the right customers or delivery drivers for fulfillment.
  • Turn Shopper Behaviours into Opportunities: A grocer can glean deep insights from its POS data, but understanding other in-store customer behaviours can greatly improve store operations. For instance, computer vision technologies can apply artificial intelligence and machine learning to video cameras positioned throughout the store, helping to better understand shopper traffic, shelf and product interactions, checkout queues, dwell times, and loss prevention activities and patterns. The intelligence resulting from that video data can then be used internally and with product suppliers to direct changes and optimizations designed to improve a customer’s level of satisfaction—and their spending.

Canadian convenience retailer Parkland is using computer vision to develop traffic pattern heat maps to improve store layouts, optimize product assortments, and reduce long checkout queues—all to boost operational efficiency and customer satisfaction.

  • Health and Safety Technologies: Although many people are eager to return to stores, retailers have an obligation to protect the health and safety of customers. With computer vision solutions and digital shelf edge technologies, grocers can have real-time visibility into aisle conditions and can monitor customer flow patterns and density to detect overcrowding, enforce social distancing, or to ensure people can easily move through the store on busy days. Managers can proactively receive alerts about potential in-store safety hazards or obstructing promotional displays that they can correct before any accidents occur.

We are also seeing a growing interest in using robotics within supermarkets to manage safety issues. For example, U.S. grocer Giant Eagle is using an in-aisle robotic platform to analyze inventory and store conditions to streamline restocking and store upkeep. By proactively mitigating health and safety issues, customers can feel confident about shopping in stores and grocers can focus on serving customers.

How a grocer gets started on a smart store transformation depends on their point of departure. Grocers should start from the customer and work backward by answering questions like, “Who is my customer?” and “What are their biggest pain points as they shop in my store?”  As the pandemic passes and in-store shopping volumes begin to return to relative normalcy, grocers that have begun to remove these points of friction and elevate the in-store customer experience will reap the benefits of happier customers, deeper loyalty, and increased sales and profitability.

Bio: Scott Langdoc leads worldwide strategy and thought leadership for the grocery chain, drug, and convenience/fuel retailing segments at AWS, helping fast-moving consumer goods retailers leverage technology to navigate changing customer expectations and market dynamics.  Joanne Joliet leads the worldwide strategy and thought leadership for the apparel and fashion retailing segments at AWS, delivering cloud migration and modernization strategies, partner solutions, and go-to-market capabilities directed at apparel and fashion retailers.

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