How Digital Transformation is Reshaping the Grocery Industry

digital transformation

How Digital Transformation Is Reshaping the Grocery Industry

In the highly competitive, low-margin world of the grocery industry, digital transformation presents significant challenges, while at the same time offering tremendous opportunities.

Traditional brick-and-mortar stores continue to dominate the grocery shopping experience, but e-grocery is growing in popularity. According to a recent study, 23 percent of American households are buying food online today. A similar study predicts total US online grocery sales will rise to nearly $30 billion by 2021.

To compete with tech-savvy retailers such as Amazon, stores are beefing up delivery options for customers, such as same-day grocery delivery and curbside pickup services. These efforts are designed to improve the customer experience, which helps to improve engagement and retention.

Ultimately, consumers want a multichannel personalized experience. This means options that range from in-store self-checkout to eCommerce and mobile applications. They also want an expanded range of payment options. For grocers, payment optimization is extremely important in this low-margin business. To achieve this, stores need to reduce the total cost of payment acceptance by lowering fees and fraud rates.

Payment Made Easy

By simplifying transactions, grocers can make shopping more convenient, dramatically improving customer experience. 

Some forward-thinking grocers are exploring options that promote lower cost payments, such as an automated clearing house (ACH), in exchange for loyalty offers and other promotions. This provides a win/win for customers and the grocer as patrons earn rewards, while grocers drive down costs.

As mobile payments become increasingly popular with shoppers, grocers are exploring the ability to vault accounts securely in a mobile application, whether it be Apple Pay, Google Pay, Samsung Pay, PayPal, a Visa checkout, or a card on file. This allows them to use tokens to authorize transactions in a secure way that doesn’t require shoppers to re-enter card details each time they make a purchase. By simplifying transactions, grocers can make shopping more convenient, dramatically improving their customer experience.

Where Loyalty Lies

Beyond encouraging payment options, loyalty programs and rewards have proved highly effective at attracting customers and improving sales. A 2018 study, found that 75 percent of shoppers would engage with loyalty programs if they made rewards information more mobile-friendly. Further, while nearly a third of consumers still prefer to print paper coupons at home, 69 percent prefer to store and redeem mobile coupons from their phones, rather than download and print coupons.

Additionally, gift cards, also known as branded currency, are presenting new sales growth opportunities for grocers, while improving customer loyalty and reducing the overall cost of payments. First Data’s 18th “Prepaid Consumer Insights Study” found significant spend lift from gift cards in the grocery business. The survey revealed that for every gift card purchased, shoppers spent on average 94 percent more than the original value of their card.

Digital transformation is literally changing how business is done in the grocery industry. And as new competitors enter the marketplace, and experience-enhancing innovations push the industry forward, grocers must remain nimble to meet the changing demands of consumers. Those grocers who are best able to adapt to this ongoing evolution will be ideally suited to succeed in the future.

Resource Credit | Progressive Grocer 

How omnichannel will change retail forever

omnichannel will change retail

Resource Credit | Gerard Szatvanyi, Progressive Grocer

Omnichannel will change grocery shopping forever

Grocery shopping is a necessary part of life, yet the way in which most consumers shop for groceries has not evolved with the same ease that shopping for other items such as clothing or even cars has. Grocers are faced with a unique challenge when it comes to providing a seamless, innovative shopping experience to customers.

How can retailers recreate online the experience of walking down the aisles and weighing produce? How do customers manage a cart full of 50 items or more from their smartphones?

These are not easy questions to answer, and grocers are still working out the kinks, but one thing is overwhelmingly clear: The grocery experience is changing, and grocers need to adapt now to keep up.

Still not convinced? “The Store of the Future” report, from Coca-Cola Retailing Research Council and Kantar Consulting, predicts that online grocery sales will take 20 percent of total grocery retail by 2025. And according to Forrester, the global online grocery market will grow at a compound annual growth rate (CAGR) of 17.3 percent to reach $334 billion by 2022, capturing 5.2 percent of total sales.

So, before we even focus on great in-store advancements like robots and smart shelves, how can grocers create a seamless grocery experience online – something often easier said than done?

Key considerations for a unified online shopping experience

When looking to engage with a customer, bring them to shop, and ultimately get them to purchase, there are a few essential ingredients:

  • First, an easily navigable website is key. If customers cannot find what they are looking for online in a matter of seconds, chances are they’re already gone.
  • Personalized promotions and recommendations also go a long way. No one wants to get more than 100 emails a day with sales and discounts on products they have no interest in. It’s more than likely that grocery customers buy similar items each time they shop, and retailers need a complete picture of shoppers’ purchase histories to power these recommendations.
  • Another feature that is essential to online grocery experience is the ability for customers to add products by weight, piece or package.  There’s no easy way to replicate a produce scale online, yet retailers need to satisfy customers who shop items by the pound. Additionally, retailers need to give consumers the ability to add a large number of items to their carts – a shopper could have up to 100 items, and grocers need an eCommerce platform that can handle that.
  • Shoppers are also seeking the option to shop for items from a particular recipe, or the ability to search options for specific events like Super Bowl or a birthday party. Similar to how items such as candles and cakes are situated close together in-store to optimize sales, grocers need to take this approach online.
  • Like on any good eCommerce site, shoppers should have the option to view and write reviews on their favorite products. In a physical grocery store, this is not an option, but in the evolving world of online grocery, customers should be able to express their opinions and get honest feedback from fellow shoppers.
  • The ability to fulfill how they want, when they want will also be key for customers. Options to shop in-store or online, pickup, ship to home – the list goes on. The same can be said for flexible payment options. The ability to pay in-store and ship to home or pay online and pick up in-store will help revolutionize the grocery experience.

Technology’s shifting role

Consumer expectations are constantly changing and adding technology to aid and improve the shopping experience is a great way to keep pace with customer demands. Retailers are investing in IoT, AI, machine learning more than ever before. 

In the modern era of grocery, consumers can shop on their phones and from their driver’s seats. Stores are managing their inventories with smart-shelf technology, and BOPIS (buy online, pickup in-store) is now almost commonplace across the retail industry. These innovations, coupled with a stellar eCommerce platform, marry the online and in-store grocery experience, allowing an ideal and efficient experience for all customers.

And it doesn’t stop with the consumer – technology is helping store associates level up their skills as well. These days, employers are looking for hardworking individuals who can build customer relationships, in addition to having superb selling skills.

Essentially, the job of store associates in 2019 is less about bagging groceries and more about knowing how to manage the wealth of technology and buying options that consumers have at their fingertips every day. Just like grocery stores are evolving, the roles of store associates are evolving too.

Retailers know that customer demands are always shifting, and the flexibility to keep up with and adapt to them will be crucial. It’s clear that grocers need to adjust their omnichannel strategies to ensure that they not only are meeting customer expectations online and off but are also differentiating themselves in the market while building efficiencies to drive sales and margins. 

How Blockchain Helps the Grocery Industry


As commerce moves inexorably online, earning and retaining consumer trust has become more complex than ever. With an immense range of choices at their fingertips, consumers have begun to expect full transparency on the products they buy. Is this item really what it says on the tin? Has that one been kept properly refrigerated throughout its journey to the store? Was it really organically produced?

If they can’t answer questions like these, brands and retailers risk losing their customers’ trust. And that often means losing their business. Accenture research shows that almost half the customers that switch brands do so because they’ve lost trust in the company.

Right now, this is a big challenge. Without a single version of the truth, tracking and tracing products across complex cross-border supplier networks is slow, expensive and error-prone. The lack of transparency is frustrating for consumers. It raises the risk of safety issues. And it prevents companies from identifying value opportunities in their supply chains.

The solution? An intelligent supply chain capability that seamlessly connects parties across the ecosystem. Increasingly connected digital operations make this possible. Using blockchain (and other distributed ledger technologies), parties can, for the first time, work together to manage product information, from growing and manufacturing right through to distribution and retail.

Blockchain is revolutionary because it enables every party to write, read, share, and use the same information – securely and in real-time. Because the data on a blockchain is distributed among all participants, there’s a shared source of information. While it’s transparent, everyone involved can still control who sees what.

Consumer Packaged Goods (CPG) companies have been among the first to take advantage (our research shows they’re using blockchain in areas like warehouse management, sourcing, and procurement). But the technology’s about to have a big impact on retail too.

Over the next three years, more than half of the retailers in a recent Accenture survey expect blockchain to transform last-mile delivery. A similar number think it will play a key role in their ability to deliver hyper-personalized experiences.

Blockchain will introduce radical transparency to the consumer goods and retail industries. From food safety to anti-counterfeiting, and from international shipping to ethical manufacturing, brands and retailers will be able to solve some of their biggest pain points.

Blockchain is a key architectural element of the intelligent supply chain infrastructure that will help revolutionize the future of customer transparency and trust. 

Scoping the blockchain opportunity

Here are a few examples. Instead of spending weeks or months retrospectively tracing a product’s origins and current location, with blockchain, companies would always have instant access to accurate information. That would be transformational for product safety: Contaminated or faulty products could be pinpointed in just a few seconds and removed from sale.

That’s not all. By combining blockchain with the Internet of Things (IoT – networks of internet-connected smart devices/sensors), companies could avert product safety issues before they even occur. Blockchain-connected sensors embedded along the supply chain would continuously check for the right environmental conditions and instantly identify tampering.

Providing product authenticity will be transformed too. Today, consumers take the provenance of food products on trust. If they have confidence in a brand, they’ll believe what it says on the label.

Counterfeiters seek to exploit that trust, and they’re getting more sophisticated all the time. With blockchain, however, the $1.2 trillion global counterfeiting industry would take a real hit. By tagging each product with an RFID chip, manufacturers could trace exactly where their products end up. And with the simple swipe of a smartphone app, consumers and B2B buyers could check the product journey from end to end.

Sustainability provides another opportunity. Today’s consumers pay closer attention than ever to the environmental and societal impacts of the products they consume (According to Nielsen, 75 percent of Millennials say they’d be likely to change consumption habits to reduce their impact on the environment).

Guaranteeing ethical and sustainable production – and communicating that to customers – is becoming essential. But it’s incredibly resource-intensive. Up to now, companies have struggled to connect directly with small-scale suppliers at the start of the supply chain and incentivize them to adopt sustainable practices. Blockchain empathetically changes that. Completely tamper-proof, the technology enables every step in the growing and manufacturing process to be tracked, providing an audit trail of exactly how, where and from what each product was made.

That’s what chocolate brand Chocolonely did. The company used blockchain to combat predatory labor practices in the cocoa industry. During the pilot, it tracked more than 900,000 kilograms of beans and verified them as being 100 percent free from slave labor.

Taking advantage

Blockchain is a key architectural element of the intelligent supply chain infrastructure that will help revolutionize the future of customer transparency and trust. It enables new ways for companies to engage with customers and consumers, support new ways of working and creates new ways to deliver on brand purpose. So how can your business take advantage?

Start thinking about your blockchain strategy now. Consider how this technology will disrupt your ecosystem, whether you choose to adopt it. Remember that blockchain is not a tool, not a solution in its own right. It can only deliver real value when it’s pointed at the right problems. Test it out with trusted partners across your supply chain. Also, don’t forget to move fast: select pilot use cases, test, iterate, and scale.

If you are looking for a partner to help you pinpoint problems within your business operations, as well as offer advice and guidance on the best solution to help grow with your company, contact allonline365 on or  +27 (21) 205 3650

Resource Credit | Progressive Grocer


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