Technology innovations have permeated every aspect of the grocery industry and are transforming everything from in-store and online convenience for shoppers to food safety and freshness and monitoring of shelf inventory for retailers. Nearly three-fourths (73%) of retailers indicate they are continuing to invest in technology, according to a survey conducted earlier this year by FMI — The Food Industry Association, and many are boosting support of personalized marketing, click-and-collect, analytics-driven decision making and advancing digital and mobile capabilities.
Last week, during SmartBrief’s SmartSummit, “Transformative technology trends and innovations in grocery retail today,” Doug Baker, vice president of industry relations for FMI, Gena Morgan, vice president of standards and technology for GS1 US and Kirk Ball, executive vice president and chief technology officer with Giant Eagle and vice chair of the FMI Technology Leadership Council came together to discuss the role of technology in the industry today, how it streamlines operations and how its data can be used to boost customer experience.
What’s driving grocery technology?
In an audience poll at the event, 40% of participants said the No. 1 reason behind their interest and investment in technology is to improve efficiency, while 26.7% cited gaining or keeping a competitive advantage as their primary reason for tech investment and another 23.3% cited a desire to strengthen customer behavior. Food safety accounted for 10% of the driving force behind technology interest and investment.
“We have several key initiatives that we currently have underway, and what’s driving us is we certainly want to serve customers in the way they want to be served,” Ball said in regard to Giant Eagle. “We want to make sure we understand the ever-changing taste and preferences of customers, but we also want to make sure we are preparing our team members to give customers world-class service during their interaction with us whether that’s in a digital fashion or whether that’s in store. We want to make sure that those team members have the capability, the technology, the information to serve customers to make sure that the in-store experience for customers is world-class.”
Baker sees the top driving force to be a desire to meet each customer where and how that customer wants to be met.
“The better you are at it, the more differentiation you have from your competitors,” Baker said.
Technology in the form of smart packaging is also a tremendous benefit for retailers as well as consumers when it comes to food safety and food waste, Baker said.
“I’ve had the pleasure of participating with a couple of universities who are actually looking at smart sensing packaging,” Baker said. “Being able to really understand the chemical makeup of, let’s say a fish as it comes closer to its expiration date, and actually notifying store personnel when that timeline might be coming to a close can help … make sure that we move the inventory through the system.”
Retailer priorities for grocery tech
Another event audience poll asked participants for their No. 1 priority when it comes to grocery technology, and more than half (58.1%) said interactive apps and shopping tools. Almost a quarter (22.6%) indicated that inventory management was the top priority, while 12.9% cited checkout innovations as their main tech focus and 6.5% responded that automated order fulfillment was a primary focus.
Data lies at the heart of all those possible applications, Morgan said.
“This shift has really been made to needing item-level data,” Morgan said. “It drives a whole load of things like compliance with regulatory requirements, disclosures, nutritional facts panel and now management of high-risk foods, with (section 204 of the Food Safety Modernization Act), but also engagement with the consumer really requires a movement to item-level data and when we think about this and think about implementing all of these technologies we are forced to take a step back and look at what’s at the core of all of this: the data. … There are some real opportunities in data quality and what industry needs to take a look at again, and GS1 has worked with the industry for over 10 years on the fundamentals of master data management and we have made progress in that area.”
It takes an industry like GS1 to standardize and organize the vast amounts of data now available, Baker said.
“We’re talking about data that is consumer-facing, and it’s that most important data, whether it be data as it relates to food safety or data as it relates to unlocking more information for the consumer and the consumer experience and consumers are going to be less tolerant of inaccurate data or incomplete data,” he said. “So as an industry we have, we have a lot of work to do around that.”
The cost of implementing new technologies
Finding the money to invest in the right types of technology can be a challenge, all the panelists agreed, and Morgan said that’s an issue that GS1 has learned a lot about in the last three years.
“The value of each of those technologies can only be fully realized when they operate in concert with one another, speaking the same global language,” she said. “Standards can no longer just be a nice thing to have. They’re an essential bridge that removes cost from the supply chain that removes cost from your investments allowing you to capitalize on all of the exciting advancements in technology.”
Marrying a company’s technology strategy with its business strategy and making sure both are in concert long-term is key, Ball said.
“[We want to be] making sure that we’re working with our business partners to truly realize and recognize and define the value of an investment prior to making that investment,” he said.
Baker warned not to skip substance for splash.
“If you’re choosing technology solutions that address customer pain points, then you’ll typically probably find the right ones,” he said.
The future of grocery technology
There are many directions technology could take the grocery industry in the coming years, the panelists said. Morgan believes that making sure the focus is on “removing friction from the customer experience and meeting the demands of what the consumer wants to know about the things that they’re purchasing” should be the overarching principle behind new developments.
“I think we all are understanding that it’s really around connected commerce,” Baker said. “And how do we make sure that wherever that consumer is, wherever they start their journey, wherever they end their journey – it doesn’t matter if it’s done on your phone versus in store versus a computer – that it’s connected and it’s seamless. So I think we’re going to get much much better at that over the next five to 10 years. It’s going to unlock some of those experiences that you might get through augmented reality and voice. At what point will we have our own virtual assistant that will basically be with us wherever we go, helping us with the tasks of the day?”
Ultimately, it’s about making people’s lives easier, Ball said, citing a future where a mom making her weekly meal plan can simply drop recipes into an app that would not only know the ingredients needed but also know what that customer already has in the pantry based on past shopping habits.
“You think about what mom has to go through when she is trying to plan meals for the family during the week. She’s got to think about, ‘What are the tastes, preferences that my family has? What are the medical conditions? What are the health objectives? What’s the inventory that I have?’ Ball said. “ We should turn that into, ‘Look, you drag and drop the day and time and what meal you want (into an app) and those meals that get suggested for you take into account your health preferences, your taste preferences and your dietary restrictions. We’re keeping track of your purchase patterns, what you probably have in your pantry and then we just take and put those ingredients into your cart for you and it’s done in about 10 minutes. Think about the two-to-four hour experience that mom has to go through as the typical meal planner for a family (getting reduced to 10 minutes) and, boy, I tell you that, for me, would be a huge winner.”
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