Race for Competitive Advantage Reshapes the Grocery Landscape

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Race for Competitive Advantage Reshapes the Grocery Landscape

By Joe Skorupa - 06/05/2019

Fear of falling behind omnichannel shoppers and fast-moving competitors is driving grocers to deploy new technology at a furious pace. This tipping point is analyzed in depth in the recently released "2019 Grocery Tech Trends Study."

When I was covering restaurant technology in the early 2000s no fast-food chain in the country accepted credit cards. None. Zero. Zip. Today, credit cards are accepted in every fast-food chain. The entire industry pivoted in just a few years even though it operates on a decentralized franchise model and painfully tight margins.

The reason for the pivot? Shoppers wanted the convenience and industry leaders were willing to give it to them for competitive advantage.

Top Business Opportunity

The #1 business opportunity today is Advancing Digital Strategies to supplement and enhance store investments (72%).

Top Business Challenge

The #1 business challenge to overcome is managing the Tight Labor Market, which was chosen by 58% of retailers.

Tech Spending Rises

80% of grocers plan to increase tech spending year-over-year and of these 40% plan to increase more than 5%.

A similar situation is occurring in grocery, but the transformation is much more profound, according to findings in the "4th Annual Grocery Tech Trends Study," a special report by RIS News and Progressive Grocer.What the study reveals is leading grocers are stepping on the gas to deploy technologies their competitors will find hard to match once they fall behind. Findings in the study, based on more than 400 datapoints, uncover tectonic shifts in digital strategy and investment trends that are reshaping the grocery landscape.

Key Study Takeaways

Study data makes it is clear technology investments are flowing along two primary tracks – core fundamentals and omnichannel advancements.

On the core track, tech investments are flowing into upgrading or replacing Price Management, Assortment Planning, Category Management and even the nitty gritty of Item Master Data Management.

On the omnichannel track, key tech investments are flowing into Location-Based Marketing, CRM/Personalization, Scan and Go (on both a grocer’s device and on a shopper’s), and Click-and-Collect Management.

Other key takeaways include:

  • Three technologies achieved #1 rankings on grocer priority lists: Price Management (current investment today), Shopper Tracking in Stores (planned investments in 2020), and Scan and Go on Store-Owned Devices (planned investments in 2021).
  • Topping the list of business opportunities that will drive growth is Advancing Digital Strategies to supplement and enhance store investments. This was chosen by 73% of grocers and was far ahead of the second place opportunity – Developing Personalized Marketing Capabilities (58%).
  • Topping the list of business challenges is the Tight Labor Market, which was chosen by 58%.  Price competition, a perennial concern, comes in second place and was chosen by 50%.
  • 80% say they will increase tech spending year-over-year and of these 40% plan to increase tech budgets by 5% or more.
  • Investments in omnichannel are clearly paying off as grocers’ report 17% of total sales today can be attributed to digital efforts.
  • Predictive Analytics is the top analytic technology in deployment today among retailers (33%) and also the number two technology overall where work has begun but not yet been completed.
  • Over the past five years 91% of grocers report an increase in omnichannel expectations among their customer base.
  • Today, a big majority of grocers (60%) offer some form of home delivery for items ordered online. Of these, 42% offer a free delivery option.

What You Need to Do and Why

Here’s the bottom line: Successful grocers with healthy balance sheets will be able to compete on price and make investments in technologies that are harder to match for those less financially healthy. The trick to successfully competing is not to take a shot gun approach but to sharpen the focus of your tech investments.

To help grocers do that the "2019 Grocery Tech Trends Study" aggregates 330 datapoints to analyze 66 individual technologies. This comprehensive dataset can be used for grocers to benchmark against. Compare your tech stacks to where your competitors in the marketplace have already upgraded, are upgrading today and plan to upgrade tomorrow. Find out where you are ahead of the curve or behind it.

And, finally, review the seven specific recommendations in the conclusion of the study. These recommendations, which are backed up by hundreds of datapoints, will help you envision, plan and execute a successful tech investment strategy over the next two years.

To see the full report and an opportunity to obtain a copy of the full set of charts click here.

Also, to get more insight and analysis into this critical topic, join our webinar on June 19th that will examine the key takeaways from the study from the perspective of "Should Grocers Strengthen Basics or Disrupt Disruptors?"  You can register for this insightful webinar by clicking here. 

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