Tech is Changing the Grocery Store Experience

Amazon, Kroger and Wal-Mart venture into apps, digital shopping features

The exterior appearance of grocery stores hasn’t changed much, but inside, it seems the whole industry is looking to go digital. From automated inventory and signage, to online ordering for home delivery or even fully-automated, cashier-less stores, supermarkets are investing billions of dollars to incorporate increasingly advanced technology.

Connected brick and mortar stores
Amazon, already a disruptor in online sales of packaged goods, has been leading the charge in automated grocery delivery, and as of 2018, started pushing the envelope in brick-and-mortar stores with Amazon Go.

A new kind of store with no checkout required, the 10 Amazon Go stores use advanced shopping technology so you never have to wait in line. And though there are humans on hand to help deal with alcohol sales and returns, you could do all of your shopping without interacting with another person. Use the Amazon Go app to enter the store, take the products you want, and leave. Hordes of cameras and shelf sensors detect the items you have chosen, and you are automatically billed through the app. No lines, no checkout.

Tech giant Microsoft and Kroger, the largest supermarket chain in the U.S. by revenue, are following Amazon’s lead, each creating a pilot “connected” grocery store. The partnership promises “digital solutions for the retail industry.” Microsoft’s store in Redmond, Wash., and Kroger’s in Monroe, Ohio both use technology powered by connected sensors and Microsoft’s Azure cloud platform.

Ever gone to the grocery store for a few quick things and spent a frustrating amount of time trying to find an item? With Kroger’s new digital shelving system and smart phone app, the whole experience could be vastly different. As Kroger’s explains it, a customer downloads the Scan, Bag, Go app, and creates their shopping list. In store, the app guides them around the pre-mapped store (or using a hand-held scanner available in-store if you forget your phone), changing to a picture of a shelf display so the customer can easily spot what they are looking for. In our house, my husband does a fair bit of the shopping, and I can see where this could cut down on a lot of time and purchase mistakes.

Automated product shelving has another benefit—providing data to manufacturers and suppliers to have better inventory control and few empty shelves. Sensors in products such as the AWM Smart Shelf can play an optimized video as a shopper approaches and shift content based age, gender, or ethnicity.

Amazon is still the largest player in online grocery shopping in the U.S., but industry experts predict Wal-Mart is set to grab a much larger share, and may eventually surpass Amazon. After purchasing jet.com, Walmart’s online grocery sales surged 50 percent.

Even with the online grocery shopping focus of these two big corporations, other retailers have been slow to get on board. There also have been a slew of online shopping app failures.

Consumer adoption of online grocery shopping has also been sluggish. The U.S. Census Bureau reported that as of the second quarter of 2018, we still purchase 91 percent of our groceries in brick-and-mortar stores. One common theory is price sensitivity and the quality and freshness of perishables.

What’s next?
After Amazon’s purchase of Whole Foods in 2017, the corporation continues to open up more retail stores. Amazon.com Inc. plans to launch a new retail grocery store business separate from Whole Foods, according to a recent report in the Wall Street Journal. No word yet from Amazon as to what connected features the stores will contain, but speculation is that online ordering, pickup and delivery through Amazon Go will be included. The first new Amazon store is slated to open in Los Angeles later in 2019.

Brendan Witcher of consulting firm Forrester sums up the outlook for retail in the grocery sector: “Today’s competitive landscape forces companies not only to be customer-obsessed but data led,” Witcher says. “Retailers need to stop looking at gut instinct and start looking at data to drive their business.”

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