Dive Brief:
- Tech-savvy CPG companies can help bring their grocery partners up to speed on retail advancements, according to a recent article on Retail Wire, citing a panel discussion at the 2018 National Retail Federation's Big Show in New York.
- A panelist from PepsiCo lamented that retailers don’t always have the appropriate technology on hand, including basic requirements like electricity and wireless connectivity, needed to promote their products in-store.
- Jason Breazeale, director of innovation at Ahold Delhaize, countered that sometimes brands bring technology to retailers that is incomplete and expect the grocer to fill the gaps. He advised that vendors consider retailers' tech capabilities before approaching them.
Dive Insight:
Grocers have not traditionally been industry leaders when it comes to keeping up with new technology. But Amazon's expansion in the channel, both online and through its Whole Foods acquisition, has many retailers scrambling to up their tech game. From enhanced e-commerce platforms to shelf-scanning robots, grocers are getting serious about catching up.
Some consumers already shop with their phone in their hand, and will be rewarded at grocers like Kroger, which recently announced that it's adding digital shelf displays to roughly 200 stores in 2018. According to Pew Research, 77% of Americans now own a smartphone, up sharply from 35% in 2011.
Kroger is a leader in the grocery space when it comes to both technology, and utilizing customer data to create a more personal shopping experience. Walmart, meanwhile, has invested heavily in everything from skip-checkout apps to robots that wander the aisles checking inventory. As these industry leaders continue to advance their in-store and supply chain technology, expect other supermarkets to follow suit.
On the CPG side, Coca-Cola has partnered with startup companies to advance its promotions and product technology. Hershey has even created concept grocery stores called Medley, which includes interactive, multi-tech capabilities.
Large CPG companies like these are sharing category research and working with retailers to advance their technology. As retailers are bombarded with new tech options, though, it’s important to keep one core concept in mind: how does this serve the customer? First, the grocer must know who their average shopper is. A Whole Foods shopper in San Francisco will have different shopping expectations that a Hy-Vee customer in Springfield, Mo. Tech that might motivate one shopper to switch stores could be of absolutely no importance to the other.
CPG companies can help retailers along by working with them and keeping systems relatively simple to implement. Expecting electricity and wireless connectivity may need to become priorities for grocers looking to stay on top of the ball. However, CPG makers shouldn’t expect each chain to invest in costly updates that serve only their brand.
