Transportation Optimization - a silver bullet to solve "last mile delivery?"

Ted Matwijec, Managing Director, ACT Operations Research – Raleigh, NC.

Learn how knowing your constraints and customer demands feeds sophisticated algorithms to provide optimal routing and balance delivery vs costs   Lately I have been seeing more and more of those brand-new Amazon Prime - Mercedes panel trucks making deliveries around my neighborhood.   Also, I have even seen the USPS delivering packages on Sunday (contracted by Amazon I am sure).  What’s going on Sunday deliveries? On demand delivery with time windows specified by a customer is becoming the consumer norm.  Remember the delivery or service call by your cable TV/Internet provider saying my service guy will be there between 8 am and noon then shows up at 11:50am.  Met their promise, but ruined your whole morning wasted sitting around! Let me assure you that customer service problem can be solved and you don’t need the resources of Amazon, UPS or Fed Ex. Amazon is clearly moving into the supply chain delivery markets much to the chagrin of FED EX and UPS to take back their “last mile” deliveries of their goods and solve this problem for the customer.    The question is how can they make the most expensive part of delivery – the “last or golden mile” to a customer profitable? From our experience in these markets, simply put, Amazon, Fed Ex, UPS and other large transportation companies have the best and brightest staff of Math, Statistical Phds that constantly hone their algorithms to minimize costs and maximize the service requirements.   When profit is measured in pennies in a transportation system – (that’s why you see the UPS guys running from each delivery back to their trucks) – the solution cannot be a spreadsheet or database or even year 2000 optimization technology. It is not rocket science, well maybe sort of, but rather advanced mathematics (think Calculus) applied to route planning optimization and fleet capacity analysis.  These transportation algorithms (remember the traveling salesman problem) have generically been around for decades, however now they are totally customized, enhanced and improved enough to cover the most minutia of system requirements – by many software companies.  I read that UPS has put 10’s of millions of dollars in R&D over the years into their algorithms to update and improve optimize their KPIs – as an example! So, why now is the “last delivery mile” more complex and expensive than ever?   The short answer, the customer is demanding it and will go other places if your company cannot provide it!   We all know how poor delivery can be written up in YELP or GOOGLE about your business – a big problem in the social media world for your marketing department.   (eg. – delivered food late for a kid’s birthday party) The good news for any retail or grocery store fleet manager is that to solve the “last mile delivery” the technology today is much less expensive and available for all size of fleets and route planners The long answer is the complexity of the business rules, constraints and requirements to execute this service.   First some examples…of customer/supplier requirement I am seeing today in our markets of retail and grocery applications - Customers: Wants confirmation of a tighter availability of their grocery delivery – eg. In the next 30 minutes Desire communications via a mobile app, email or text to the customer – about the updated arrival time. Want a positive experience to tell their friends how good their deliveries are! – We all want that on demand! Grocery/Retail Stores with their own fleets, or outsourced via 3PLs - Wants a confirmation signature the groceries have been delivered and that information is sent back to the IT system in real time, with SKU information, for example – for replenishment purposes. Wants real time updates from their drivers about location, traffic and estimated delivery window to communicate back to the customer. Wants to be able to reschedule a driver in real time for a new pickup at the store/warehouse or pick-up a returned item. So, the lengthy transportation distances between warehouses to stores is a natural issue solved by logistics teams for inventory replenishment.  Now add that complex delivery network and inventory now required “on demand” from a store location or back in the warehouse for a customer that wants it delivered this afternoon – and you get to see why the “last mile” delivery starts to become complex and expensive!  From a labor, IT system connection, communication systems, loading, unloading, time window point of view, the human brain cannot possibly manage all the variables in your network – to balance cost vs services. Lot’s of moving business costs involved to serve the customer. So, from my 30  + years in the Operations Research field, I can strongly recommend an updated math model is appropriate for route planning and optimization and is the potential strategic “silver bullet” you are looking for – to support you competing in your markets!  Of-course it is not the whole answer, you have to execute a plan, change some processes and manage the fleet – the cultural processes. Question, when was the last time you asked for your route planning algorithms to be updated in your home grown business system,  TMS or ERP system, meanwhile your points of service network has changed a lot just in the last 5 years! I have seen the market share winners in the tight margin grocery or retail store business realize that the supply chain strategy to optimize delivery to their clients from source through the delivery point is accomplished by using transportation optimization.   Managing constraints like labor, fuel costs, traffic conditions, time window, texts and emails to meet that short time window and the “last mile” requires serious modeling/computational power and IT changes. The good news is that this technology is more readily available, less expensive from providers, easier to use for your staff, and has proven real cost savings – to meet or exceed your customers expectations. How much did your optimization algorithms cut your cost in your delivery system last year? Find the hidden value in your delivery system today, using math optimization, your savings should be a min. 10%+ or more in our experience to deliver on time or earlier and impress your customers! +MORE

Darius™ for Retail

Darius Technologies

Darius for Retail is a fully integrated, cloud based shopper engagement platform. Darius delivers proven and measurable return on investment, by allowing retailers to put their shoppers at the center of everything and making it easy to engage and influence them pre-store, in-store, and post-store. Darius allows retailers to design, manage, develop and, measure interactions with their customers throughout the entire shopper journey.  The ‘tech’ bit: Darius™ is a modular ‘ecosystem’ retail technology platform that is designed to integrate and allow interaction with any existing retail systems and solutions such as Beacons, WiFi, dynamic shelf illumination, or e-coupons, and so on, to make continuous engagement with shoppers possible, wherever they are on the path to purchase. The customer experience bit: Darius™ allows retailers to put their shoppers at the center of everything by making it easy to engage and influence them pre-store, in-store, and post-store. The business bit: Darius™ delivers proven and measurable return on investment. That means more shoppers in-store, more often. It means attracting new and hard to engage shopper types. And it means bigger baskets and the increased spends that comes with that. It makes marketing budgets and, where they may already exist, retail tech investments work so much harder. +MORE


BEFORE! Predictive Analytics

ACT Operations Research

1) Predict demand down to store and SKU level 2) Predict promotional campaign affect in the store, transportation and warehouse operations 3) Buy optimal quantities 4) Manage the risk associated with stock outs vs promotional campaigns and waste 5) considers assortment constraints and category efficiency 6) simulate store queuing for capacity analysis purposes and cost reduction purposes.  REVENUE, SALES & PROMOTION Revenue management and price optimization is a core-activity in any market oriented company operating in different industries (Retails, Fast Fashion, Chain Store, Car Rentals, Web Business, etc.). The goal of our suite is to provide, to the revenue managers, advanced analytics, using a unique combination and integration of predictive, optimization and simulation models. While the analytics tools are complex the results are always presented in an intuitive way. The core products included in the Revenue, Sale, Price & Promotion (RSP&P) suite are: Dynamic Price Optimizer (DPO), the multi-paradigm predictive paltform - Before! Predictive Analytics with Before! Sales Campaign -, the customers and market profiling analytics (CMP), the promotion optimization and what-if analysis platform - Before! Promo.  Before! Sales Campaign Before! Sales Campaign software addresses the needs of industries where the products and the merchandise assortments, have a fast renewal  dynamics, even during the same season, like the case of fashion and  fast-fashion channels, electronics or several web-business  Before! Promo Before!Promo, is a complete multi-paradigm analytical tool by ACTOR, developed for scaling enterprise companies. In the current competitive scenario the consumers pay high attention to the promotions, on the other hand promotions exposed retailers and vendors to higher risks in terms of image, in case of stock-out or costs in case of over-stock. When products are fresh-food or fast fashion for example, the risks become even higher.  Before! Predictive Analytics  Before! Predictive Analytics or simply Before!, is a complete multi-paradigm demand forecasting platform by ACTOR, developed for scaling enterprise companies. Before! provides you the capability to forecast the demand while gaining control of the related organization processes such as; planning, procurement, inventory optimization, store replenishments, etc..  Dynamic Price Optimization  Dynamic Price Optimization (DPO) is a capacity and revenue management software based on sophisticated analytical algorithms. It permits users to optimize the prices of products, assets and commodities over the time based on the expected demand, the competitor’s prices and other key-information like, for example, price elasticity.   +MORE


Mobile App Pain Points

John Kangas, CEO, FwdMbl Solutions

Your current in-house system works great within your four walls.  The pain starts when you walk out that door and it can give you a full-on business migraine by the end of the day. We can ease the pain by targeting these five major sources when your workforce hits the road. Breakdowns in Communication When an Account Manager, Sales Rep, Delivery Driver, or Customer directly needs information, they need it NOW!  It should not require phone calls, strings of emails to and from the office or multiple warehouse locations to find product, invoice information, aging or account information, upcoming orders, etc. It’s frustrating and time consuming for everyone involved.  You should not require an Internet connection to give this to your customer when you are standing in front of them. FwdMbl Solutions gives Account Managers, Sales Reps, Delivery Drivers all this information right at their fingertips. It is available without the need for Wi-Fi or a cell signal and can be printed, emailed or faxed right there. There’s no need to track down items or pricing, looking up inventory and pricing is immediate. Pricing Errors Let’s face it, pricing can be complicated. If updates in pricing don’t make it to the ones that are selling in the field you can lose money. If incorrect information is given it can turn into an embarrassing situation.  Pricing can be different per customer given contracted pricing or discounts. Sales may be given leeway to adjust pricing on the fly within reason.  There are many scenarios as there are companies.  Pricing needs to be up-to-date and correct each and every time FwdMbl Solutions handles all pricing scenarios. All pricing updates can be real-time saving you money and confusion. Workflow Issues The system you are using doesn’t match your workflow.  You need to hunt for your tasks and weed through things you don’t use.  You are jumping from one item to another just to complete these tasks.  This takes precious time and leads to frustration. FwdMbl Solutions gives you role-based programming.  It gives you only your work for the day and one task seamlessly flows to the next. It’s so efficient, before you know it, your day is complete with time to spare! Internet Connection/Equipment Problems I see it almost every day while going to the grocery store, convenience store or my favorite restaurant.  Account Managers, Sales People, and Delivery Drivers trying to connect to Wi-Fi, or get any Internet connection.  Once they do, connection is slow and they have wait for webpages to display on their screen.  When it does finally appear, the information is hard to read or cannot be given to the customer. Printers disconnect or jam. Old devices just giving up the ghost. FwdMbl Solutions’ Apps are native apps that work connected or disconnected. They are not merely a webpage you are trying to display on your phone.  We use our unique technology to make sure your employees are never waiting for the information they need.  Once the information is pinpointed it can be printed, emailed or faxed to give immediate access to your customer. Training is Difficult FwdMbl Solutions’ Apps are robust, yet simple and elegant.  The screens are not busy or hard to read.  The workflow is intuitive and training is a breeze. The PAIN IS REAL!  When your software is in your employees’ hands and doesn’t work disconnected, has missing or inaccurate customer or order information, has printer or scanner malfunctions, or is cumbersome to use it is a recipe for unhappy employees and unhappy customers. At FwdMbl Solutions we can enhance your customer experience and improve employee satisfaction with our Mobile Apps and Portals.  We do this by connecting to your existing systems, so there is no need to change everything you do, only what they see.  We interface to your backend ERP, POS or other systems and display your information in a Mobile App or Portal that is fast and truly mobile. It is easy to use and best of all, it runs on the mobile phone you already own. Don’t own a phone? You can use an affordable Android device from our hardware partners. +MORE

The Growing Role of Data Intelligence in eGrocery

Michael Demko, CEO and Founder, Locai Solutions

2018 was marked by many advancements in the various applications of data intelligence – the ability for computers and apps to gather information, and use it to give customers a truly personalized experience – setting the stage for the next-level in convenience. Shoppers are now less resistant to the idea of individualized product suggestions, which creates a new dynamic of customer service: people expect products to be presented to them in an easy, personalized, and intelligent way.  A great user experience is an imperative part of any eCommerce offering, but the underlying logic, algorithms, and intelligence that bring depth and relevance to the user experience is where the real innovations are occurring. In 2019, personalization and AI will grow from being merely promotions and product recommendations to a set of  tools that help retailers sell time-saving solutions. By 2020 45% of retailers plan to utilize artificial intelligence to enhance the customer experience. Currently, many platforms generate lists that you can buy from, but with machine learning you can now deploy solutions that provide higher levels of convenience for your customers.  What exactly does the customer experience? A more frictionless buying experience. Upon initial sign in to an app powered by an engine like eGroceryIQ, customers answer questions about their dietary preferences, portion sizes, and favorite items. After each purchase, the order details are collected and used to modify that user's next shopping experience. If the customer reviews an item, that information is also integrated into future product and recipe recommendations. eCommerce platforms embedded with AI powered solutions will take all this customer data, integrate it with what is currently in their shopping cart, and provide them with a highly personalized and engaging shopping experience. These smart apps, using segment-of-one personalization, create a unique interface for each customer. Instead of having to sift through an entire catalog, shoppers are presented with their favorite items right away, as well as similar product suggestions – foods they might like based on past purchases.  Other applications for data intelligence include capabilities that provide shoppers with information to problem solve for quantity and product type. Customers can filter and scroll through listings to compare nutritional information and see what items fit with their dietary preferences or restrictions. AI solutions  can sift through recipes, parse ingredients, map them automatically to a retailer’s assortment and systematically scale the amounts needed for a family of 4 or a single serving enabling customers to use tools such as meal planning to maximize use of products already in their virtual shopping cart. As machine learning continues to evolve, the possibilities become endless.. Is it worth the investment? All that value for your customers translates to higher sales. Intelligent solutions mean higher basket sizes, improved loyalty & retention, increased conversion rate, and higher purchase frequency.  Furthermore, data intelligence can be used to advance your merchandising, logistics, and fulfillment efforts. According to Tech Emergence, "the predictive capabilities of AI may play an important role in forecasting inventory needs, determining prices of products based on internal and external factors, analyzing customer behavior, loss prevention, delivery services–and potentially much more."  Equipped with volumes of data about your customers, new platforms will emerge to enable you to more easily pivot your business strategies, optimize your interfaces, and offer a catalog of high selling products.  The bottom line? More convenience equals greater customer satisfaction and more revenue. Intelligent solutions for today and tomorrow According to Forbes magazine, almost half of Americans now buy groceries online. Recent surveys by Food Marketing Institute (FMI) and Nielsen show that 49% of US consumers had bought CPGs (consumer packaged goods) online in the past three months, up from 23% in 2016. The rates were higher among younger demographics – 61% for millennials and 55% for Gen Xers. As these rates continue to increase, experts predict that AI will continue to expand to meet the growing needs of both grocers and shoppers. Without AI, traditional grocery stores will have a difficult time meeting consumer behavior and demands. Many are finding that simply adding an online catalog is not enough to satisfy their customers, nor drive higher sales. The key is increasing value through efficiency and continuous learning about your customer. Solutions embedded with machine learning are designed to meet the needs of both the retailer and the consumer – giving the consumer an engaging, personalized experience, and the retailer a comprehensive, sales-driving and scalable platform. In order to succeed digitally, a broad set of components are needed and we’re beginning to see more and more partnering between grocers and technology solutions. As Yeal Cosset, Chief Digital Officer of Kroger said, “Personalization based on available data will not work. If the filter of the data is only good you will become obsolete, but if it is great you will have success.” Investing in flexible platforms that enable integration with the best in class consumer and operational features will become necessary, as a wide host of 3rd party application providers continue to emerge as the industry evolves. +MORE

Five Predictions for Retail Transformation in 2019

Gary Hawkins, CEO , Center for Advancing Retail & Technology (CART)

As we begin 2019, tomorrow is no longer going to resemble today. The pace of tech-fueled innovation continues to grow, bringing with it increasing change across the supply chain and greater impact on traditional retail operations and models. 2019 is going to be a year of even greater change. Here are five key areas to watch this year: Frictionless shopping: The Amazon Go store with its cashier-less shopping experience has gotten the industry’s attention and this year we will see a great deal of activity in this space. There are several tech companies working to bring similar capabilities to the retail industry along with cost-effectively scaling the technology to work in traditional supermarkets. I believe the proliferation of retailers’ mobile apps having some kind of self-shopping capability - the shopper scanning their products as they shop using their smartphone and then an expedited payment process - is an interim step to a completely frictionless shopping environment. The whole idea of the Amazon Go store is to make buying products as easy as possible; the shopper having to use their app to scan and pay makes it easier to buy but not as easy as just walking in, picking up what you want, and walking out. Automated fulfillment: Kroger’s partnership with Ocado to build and operate twenty automated grocery eComm fulfillment centers is on track. We are seeing several other retailers enter into agreements with Takeoff Technologies to build mini automated fulfillment centers that can sit in the backroom, automatically fulfilling high-velocity packaged goods ordered online. Walmart is working with a partner to build an automated fulfillment center that is designed to sit alongside their stores, fulfilling high-volume products. In 2019 we are going to see even more activity in this space as other retailers will be forced to follow these leaders as automation brings efficiency and lower fulfillment costs, opening up a productivity gap. We will be seeing other technology providers step into this space as the market expands. Automated delivery: Kroger’s partnership with Nuro to use automated, driverless delivery vehicles to deliver online orders to the shopper’s home is already in pilot. Udelv and other solutions will be gaining more interest as retailers begin to focus more attention on the final mile delivery. While many retailers have signed deals with Instacart or Shipt to handle actual delivery, we’re going to see growing interest in Uber and other services to handle deliveries and fast growing interest in automated solutions like Nuro and Udelv in search of cost efficiencies. Health & Wellness gets personal: The wearables market is growing fast as Apple’s Watch and similar devices provide even more functionality to monitor key health indicators in realtime. The explosion in health data coming from these wearables will become increasingly tied to food guidance, helping the individual understand what specific food products to purchase and consume based upon the individual’s health condition and realtime data. As an example, Dexcom recently released a device that provides realtime glucose monitoring for people with diabetes. The ability to use knowledge of an individual’s glucose levels at that specific time - for example, while they are standing in front of the shelf - will inform guidance to beneficial foods. This movement is already underway as the massive food and healthcare industries converge, driven by Amazon’s ownership of Whole Foods, PillPack, and other activity in healthcare. Kroger’s Opt-UP app enables the shopper to easily understand the quality of the foods they are buying and easily filter the store’s product selection based upon the shopper’s interests, needs, and preferences. Look for a lot more activity around this space in the coming year. Melding of digital and physical retail: While most industry activity has been focused around eCommerce and automation of fulfillment and delivery of orders, I believe we are going to see growing attention to the melding of digital and physical shopping. This encompasses bringing augmented reality into the store and shopping experience; we’ll also see growing activity in virtual reality shopping as VR tech gets better and cheaper. Digital signage will spread across the store and get smarter, not only using demographic info to present messaging relevant to the person standing in front of the screen, but engagement will be far more personalized. Kroger’s new shelf Edge system is moving in this direction, lighting up as a shopper moves down the aisle to call out relevant products. Obviously there are many more areas where technology is going to transform retail but these are five key areas to watch. Each of these fundamentally changes the game: Frictionless shopping and automating fulfillment and delivery remove significant costs and will put growing pressure on competing retailers as companies using these technologies scale deployments.  Personalization will move quickly, not just in marketing but in linking an Individual shopper’s health to her favorite store’s product assortment, guiding the shopper to products to improve her wellbeing.  Lastly, shopping is about to become far more interesting and truly immersive as technology really begins to impact the shopping experience, whether you are in the brick & mortar store or sitting at home. +MORE



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Pseudo Customer Centricity: Fool’s Gold

Gary Hawkins on Winsight Grocery Business, CART

Retailers must employ a customer-first philosophy into organizational culture Many regional retailers are (at last!) intent on becoming customer-centric, more than a decade after The Kroger Co. led the way and more than two decades after early loyalty pioneers proved the value of a true customer focus. But too many retailers believe that customer centricity can simply be bolted on to their organizations without realizing that true customer centricity is far more involved. Like the intrepid gold miners of the 1840s, these retailers awaken to the realization that what they’ve taken for retail gold is in actuality a false promise, seduced by the fools gold of pseudo customer centricity. I can recount meetings with senior executives from well-known retailers who espouse their customer centricity efforts; spending massive sums on consultants and solutions powered by a decade’s old approach based on customer segments integrated to the retailer’s category planning processes, and even personalized offers to shoppers. Countless of these retailers remain anchored in a product-focused world, even those who tout using technology to discover what products should be put on offer to their customers rather than starting with a vendor-funded offer pool.  True disciples of customer centricity deeply embed a customer-first philosophy into their organizational culture, extending it to every part of the enterprise. These companies realize that providing savings on products relevant to the shopper is only the beginning. Leading companies such as Amazon and Kroger are investing heavily in taking customer centricity to the next level: comprehensive, seamless user experiences across channels and devices, integrating personalized product recommendations with an understanding of the individual shopper’s specific health conditions, and laying the technology foundation for immersive shopping experiences melding the physical and digital worlds. Customer first disciples understand the dynamic flow of customers and their shopping behavior over time, putting in place capabilities and processes attuned to providing contextual relevancy inside and outside the store. And personalization—driven by past purchases and recommendation algorithms—is fast evolving to what I think of as strategic hyper-personalization, leveraging vast intelligence about each individual shopper to power a mix of recommendations to win the shopping trip, grow baskets, maximize retention, and foster customer advocacy—one customer at a time, in real time. Many regional retailers are based in more rural areas where company executives believe their shoppers are less tech savvy, relieving pressure on digital imperatives. According to Pew Research, 95% of Americans own a cellphone in 2018, with 77% of Americans owning a smartphone. Pew also calls out that in 2018, 89% of Americans use the internet. Location is no longer a proxy for customer technology illiteracy.  This year, Amazon is projected to realize over $258 billion in U.S. retail sales, an estimated 49% of all online retail spending in the United States. With this kind of penetration, and the ability to ship products anywhere overnight, traditional supermarket retailers would do well to remember that their shoppers are increasingly expecting (demanding!) the seamless and comprehensive user experience provided by Amazon, and increasingly by Kroger and Walmart. Yet, too many retailers remain mired in digital purgatory, constrained by capability silos and the inability to bring piecemeal capabilities together in a seamless fashion for shoppers.  Lastly, many seasoned grocery executives have spent their careers being rewarded for following, letting someone else bring innovation to market and only following when it has been proven successful. Years ago IT executives would buy IBM, even if it wasn’t the best choice, but because it was the "safe" choice. This practice continues today as retailers sign deals with "established" providers because they believe it is the safe choice, failing to understand that today’s environment rewards fresh, forward-looking thinking. Retail executives need to look beyond yesterday’s approach to customer centricity to capabilities and platforms that actually position the retailer for future success. The cost of failing to provide a seamless shopping experience, for failing to provide true individual shopper personalization, and failing to provide real time contextual relevancy, can rapidly obliterate any savings or security from yesterday’s "proven" approach. Tom Furphy, a former Amazon executive and the originator of Amazon Fresh, in a recent interviewspeaking to the challenges retailers face today, especially a reliance on past practices, says it all: “What seems safe is actually destructive. That’s a recipe for longer term disaster.” This article originally appeared on Winsight Grocery Business and can be viewed here +MORE

The Top Five Ways Retailers Benefit from Industry Trade Shows

Courtney Muller, Chief Corporate Development & Strategy Officer, Clarion UX

When was the last time you attended a retail or food and beverage trade show? If you have to pause to think of the answer – or know immediately that the answer is, “Never” – then it might be time to find a show or expo near you. Trade shows are the best places for those within the industry to get out of their stores and network; find new products and stay abreast of the cutting edge technology offerings; and gain invaluable education in the areas you need it most. In short, even if you spend time every day trying to stay current, you could never see it all – or know what to search for. There is no better place than a trade show … from seeing new products, meeting new people, becoming educated on a new way to engage your customers, or finding out about technology … this is the place to find what you don’t know!   Here are some of the top reasons you should attend a trade show this year: Network with Decision Makers When you think of networking, perhaps the typical “mixer” scenario comes to mind with people you don’t know awkwardly milling about a bar or restaurant, trying to strike up conversations with random people in the hopes that you might be able to benefit one another in some way. Networking at a trade show couldn’t be any more different. As an attendee, you can specifically find exhibitors with the products you seek; attend educational sessions that pertain to topics you are interested in, therefore attracting other audience members who share the same challenges; and be assured that your peers in the same industry as you are seeking similar solutions as you.  And you might even run into a colleague you haven’t seen in years! Find New Products and Foods You subscribe to industry periodicals and get Google Alerts in your inbox every day, but have you seen that new robot that identifies out of stock items and potential slip and fall hazards? Have you read about leveraging data to establish loyalty and trust with food delivery customers? A trade show is the perfect venue to scope out all that is new in the retail world from tech products to new foods and services – all in one place – to help you use technology to create a seamless customer experience. As you look for new technology innovation to keep you competitive, you may find the perfect partner for online ordering, rapid delivery, or rapid checkout through customer’s smartphones.  No matter what you want to go to a trade show to find, you will likely be pleasantly surprised by discovering even more than you thought along the aisles. See New Trends in Action Are vegan offerings a must-have? Should you offer chef demonstrations to showcase meal ideas? Are international flavors high on consumer’s minds? What chef dishes are they trying replicate at home? Be on the front line of this year’s and next year’s trends so you can bank on what your customers will be looking for in the near future. You’ll walk away with new products and great ideas you can implement immediately in your store operations. You may even realize that you are on the verge of creating an entirely different trend yourself that has yet to appear on the market – good information that you can capitalize on in the year to come. Receive Best in Class Education If school is a distant memory – or perhaps you learned hands-on in a family business and worked your way up the ranks – one of the best perks of most trade shows is the educational content provided to attendees and exhibitors alike. Whether you’re interested in operational excellence, developing your workforce, building bigger baskets, or sessions dedicated to those hot new tech trends we previously mentioned, trade shows like The NGA Show (presented by the National Grocers Association) in San Diego this coming February will have you covered on all fronts. What’s more, you can connect with presenting industry specialists to gain even more valuable insight into the topics that interest you most. Gain Immediate, Actionable Ideas The bottom line … your time is valuable and you want to spend any time out of your store obtaining the cream of the crop ideas - from new products, growth strategies and tech trends. Hear what the experts have to share, sample emerging products, uncover new technology, and refresh your enthusiasm for the business. You’ll walk away with a plan to bring all of these new ideas and initiatives into your store operation to drive profits, growth and innovation.   No matter where you are in your retail career, a trade show will no doubt provide you with opportunities, education and inspiration as you progress in the business. Interested in learning more? Check out the upcoming NGA show: National Grocers Association Show, San Diego, CA, February 24-27, 2019,  Each year, The NGA Show brings together independent retailers and wholesalers, food retail industry executives, food/CPG manufacturers and service providers for unparalleled opportunities to learn, engage, share, network, and innovate.  Given today’s ever-changing marketplace and evolving advancements in innovation occurring in the food retail industry, The NGA Show is a must-attend event, providing over 40 educational workshops, an expo floor featuring innovative and game-changing products and solutions and countless networking opportunities.  Registration is open at – early bird registration rates in effect through December 10, 2018.  +MORE

NGA Show 2019: The Epicenter of Grocery Industry Innovation

CART, Advancing Retail

In a special event leading up to the opening of the new NGA Show 2019, CART will bring together unique education, an impressive line up of speakers, and cutting edge innovation to make San Diego the epicenter of grocery industry innovation during Feb. 24-27, 2019. With a focus on regional retailers and dynamic independent operators, the CART team will present an innovation tour de force designed to help attendees not only stay in the game but help them win. CART is coming together with leading retailers through-out the industry to provide attendees a new worldview for the future of retail where transformation and disruption are the new normal: iRetail. Focused on five ‘i’s, iRetail will give attending executives a framework for evaluating their existing capabilities and provide a roadmap to closing the innovation gap. In a time of declining and disappearing industry events, the NGA Show has become a beacon of light for the industry as it has grown each year, even outgrowing its longtime home in Las Vegas, spurring the move to San Diego this coming February. CART has had a long time partnership with NGA and is taking the relationship to a new level this year, building on the success of CART’s Innovation Event at last year’s show.  Make sure to put Sunday, Feb. 24, 2019, on your calendar and plan to attend the CART special event at the new NGA Show! +MORE

Technology's Profound Impact on the Supermarket Industry

Peter Larkin, President & CEO, National Grocers Association

Often cited as the one of the greatest catalyst of change within the retail grocery industry, technology is an area that independent supermarket operators must understand, and embrace.  Technology continues to have a profound impact, where virtually every detail of the supermarket industry is being touched by new solutions and platforms. I see three technology threads, each entwined with the other. One is the explosion of mobile applications and programs that are turning grocery shoppers into high information consumers. According to Pew research, smart phone adoption among Americans has more than doubled since 2011. Not only are shoppers becoming more sophisticated, but they are using technology as a way to gain more information, transparency, and convenience. At the touch of a mobile screen, consumers can instantly access to updated information on locally sourced perishables, competitive promotions, price checks and recipe ingredient lists. In turn, this migration to the digital space is shaping customer relationships with retailers. Today’s shopper does not want to be talked to but instead wants to be a part of the conversation. Consumer product manufacturers and marketers make up a second technology thread. By analyzing large chunks of customer data and retail sales, manufacturers, retailers and service suppliers are exploring innovative ways to touch their target audiences. Big data though can be vast and hard to harness. Whether it’s social media, a mobile payment system, or loyalty programs, technology can effectively create many new opportunities for savvy retailers to learn about and to connect with their shoppers to better serve their needs. A good place to see and learn about a number of these innovative solutions is right here at The third thread is in the store itself, where technology is increasingly employed to improve overall store productivity to program more effective lighting, to boost checkout efficiency, to track shopper traffic flows to improve layout and sales per square foot, or to offer customers immediate cost savings via real time wifi connections as they shop. A great, and very recent, example of this is Sedano's Supermarkets launch of a “robotic supermarket,” which entails an automated fulfillment center where AI-enabled robots will assemble full supermarket orders of up to 60 items. While the landscape is quickly evolving, many independent grocers are taking advantage of cutting-edge technologies to engage with their shoppers, find efficiencies, and reach new and existing customers where, how, and when they want. Independents have been making their move into digital. They are hiring dedicated staff, dedicating marketing budgets to digital initiatives, more effectively leveraging social media platforms, and integrating the latest technologies into their business strategies.  With the dramatic pace in which new apps and tech solutions are coming on to the market, it can all seem a bit overwhelming, but technology will play a defining role in the supermarket industry.  Those retailers that are on the forefront of implementing new technology and embrace the hyper-connected, tech-savvy consumer are positioning themselves for success. I’m one who is convinced that these threads will weave into a pattern of rising sales and profits. And that’s why the 2019 NGA Show will kick-off with a new educational event, spearheaded by our partners at CART, entitled “iRetail: Technology Innovation Reshaping the Grocery Industry.” The event is designed to give supermarket operators a framework for navigating fast-paced innovation while maintaining a focus on the importance of people and physical stores as we move into the future. Despite increased competition from all angles, it is an exciting time for the supermarket industry – and we at NGA are bullish about what the future holds for the independent grocers! Known as the true entrepreneurs of the industry, independents are nimble enough to quickly overcome obstacles, and are finding innovative ways to respond to changing consumer preferences, which is something they’ve always been good at given their close ties to their communities and the consumers they serve. +MORE

From the Innovation Gap to the Knowledge Gap

Gary Hawkins, CART

I have often written about the growing innovation gap - the divide between the exponential growth of new tech fueled capabilities and the more linear growth of retail deployment of new solutions. This innovation gap has been one of the largest single challenges to brick & mortar retail. And while the innovation gap remains a serious concern, a number of solution providers are leveraging the cloud and other approaches to bring advanced capabilities to regional and even smaller independent retailers. The problem is that while retailers can avail themselves of new solutions, they are sometimes lacking the resources, knowledge, and skill sets to make use of these new capabilities. We are seeing this in many different areas. From sophisticated AI powered forecasting solutions that are able to ingest store-level events that impact product movement to cutting edge marketing personalization systems that challenge retailers to think differently about how they go to market. The challenges we see are three-fold. First, retailers frequently lacking the requisite data analytic skills to make use of more sophisticated capabilities. Second, retailers lacking the discipline to modify operations or data gathering needed to power new capabilities. And three, retail executives being challenged to think outside the box, and envision doing business differently. There is no easy answer to these challenges. It is one thing to have access to new innovative capabilities and quite another to have a company culture that embraces innovation and new ways of doing things. It is this issue that is perhaps the most important in looking ahead to who will win and lose in future retail battles.  +MORE

Why You Should Consider Using Instagram as Part of Your Business Strategy


With over 1B world-wide Instagram accounts active monthly, 500M+ users active daily, and 400M+ sharing Instagram stories, it makes good business sense to include Instagram in your social media strategy, especially when you factor in that 80% of users follow at least one business account (1) With the introduction of Instagram stories, predicted to reach 1B by 2020, Instagram is moving further into longer-form content. Its introduction of Instagram Stories in August 2016 precipitated a steep rise in user growth and engagement — daily active users went from less than 20% of monthly active users in October 2016 to more than 60% in September 2017  Instagram has become an essential element of social media marketing for businesses, and a way to humanize your brand.  Whereas findings confirm Instagram, Snapchat, and Twitter still tend to be more popular among the younger crowd, especially 18 to 24-year-olds, a new Pew Research Center survey finds that 35 percent of US adults use Instagram — an increase of 7 percent from 2016, so it’s not just for teens and Millennials any more — and people don’t use Instagram casually, 38% visit the site several times. It's not too late to get your business set up with Instagram, and when you do, it’s important to go about it correctly for the best result.  Initial steps like writing your bio, experimenting with the best times to post, and which hashtags to use are all important to the success of your Instagram account.  Here are a couple links with more information on getting set up to get you started:   Instagram’s internal research (thru June 2018) (How Instagram is Eating the World) (Social Media Use in 2018) +MORE

Amazon’s Whole Foods Acquisition Ramps up Grocery Competition

Sterling Hawkins, CART

Only a year after Amazon completed its acquisition of Whole Foods, the resulting merger has ramped up competition in the grocery segment.  Amazon entered the grocery segment as part of a strategy to make it more compelling to be a member of its Prime program, a paid service that includes deals and speedier shipping. Prime members tend to buy more things and are entrenched in Amazon's ecosystem.  Amazon founder and CEO Jeff Bezos summed up the strategy: "I want to make it fiscally irresponsible to not be a Prime member." Therefore, targeting a grocer like Whole Foods was a smart move.  "If Amazon wants to make it super compelling to be a Prime member, it makes sense to make those discounts and benefits available and applicable in everyday shopping items like grocery," said Sense360 founder and CEO Eli Portnoy. By acquiring Whole Foods, Amazon has made Prime benefits available in daily shopping situations like buying groceries. For instance, Whole Foods offers Prime Deals and yellow sign deals, an extra 10 percent off sale items for Prime members. With these regular benefits, Whole Foods shoppers have a compelling reason to become and remain Prime members, and Prime members have an added incentive to shop at Whole Foods. Prime discounts have had a powerful impact on Whole Foods' performance among Amazon users. For example, the gap between Amazon and non-Amazon users who shopped at Whole Foods spiked 2x in mid-May, when Prime Deals debuted in Florida. The deals are rolling out to more stores nationwide. Sense360 also looked at the conversion of the general population of grocery visitors in 2018 vs 2017 and found that in May, June, and July of this year, Whole Foods market conversion increased from 4.8 percent of all grocery store visitors to nearly 6 percent when compared with the same period a year earlier (2.2 million visit sample size). The data illustrates how Amazon has created a cycle of competitive advantage that is challenging for grocers to compete with. The merger creates more value for Prime members and will likely increase Prime membership. That means more traffic and loyalty for Whole Foods, a win-win for Amazon and a tough formula to go against. To understand how the merger is affecting the grocery segment, Sense360 analyzed Trader Joe's traffic. The grocer was selected because 36 percent of Trader Joe’s customers also visit Whole Foods, a significant overlap. Trader Joe’s customers also have similar motivations as Whole Foods shoppers, namely food quality, health and nutrition, items not found elsewhere, and specific items or brands carried. Sense360 data showed that in 2017, Whole Foods’ and Trader Joe’s head-to-head visit share (relative traffic when two brands have stores within a mile of each other) was 51 percent to 49 percent, with Whole Foods slightly ahead. But during Prime Deals this year, it rose to 53 percent to 47 percent, with Whole Foods winning more share. That means Whole Foods is winning 4 percent more of those up-for-grabs visits when the two brands are in close proximity to each other.  Whole Foods’ gains aren’t just limited to Trader Joe's. Whole Foods has grown head-to-head market share against national retailers including Safeway, Walmart and Costco. "Whole Foods has actually increased market share when in close proximity to almost every national competitor in the grocery market, including mass merchandisers, drug and dollar stores," Portnoy said. Overall, Amazon is a formidable competitor with an enviable advantage due to the cycle it has created between Amazon, Prime and Whole Foods. "This cycle is going to perpetuate itself, and it's going to create meaningful challenges for the category," Portnoy said.    But there are still opportunities for grocers to compete against Amazon’s empire. Portnoy advised focusing heavily on data, rapidly testing and validating every hypothesis, and being prepared to course correct.  +MORE

Locai Solutions

Locai Solutions Inc

locai is the first company to offer a full suite of software that integrates an e-commerce platform with a fulfillment management system. locai provides a flexible set of solutions including a turn-key eCommerce website, as well as access to great UX features - such as product recommendations, meal planning, and endless aisles - via APIs for easy integration into your existing eCommerce platform. These features have been proven to drive higher basket sizes, and create greater customer engagement, satisfaction, and retention. The locai platform is also the first eCommerce solution for grocers to be built on a cloud based architecture that enables order execution via the full spectrum of fulfillment formats. The locai Fulfillment Management System is versatile and capable of supporting numerous operating footprints, from warerooms to dark stores and/or dedicated distribution centers, and while fully integrated with locai's eCommerce Platform, the FMS can easily integrate with other eCommerce platforms and order management systems to create a unique solution for your brand. Embedded with real-time operating metrics, intelligent pick cart building logic and order verification, the locai Fulfillment Management System is proven to reduce operating cost per order while improving order accuracy. +MORE


Amazon Prime at Whole Foods: What’s the Impact?

Gary Hawkins, CART

When Amazon acquired Whole Foods a year or so ago, many industry pundits speculated that Amazon would extend its Prime loyalty program to the brick-and-mortar grocer. While it took some time to accomplish the necessary systems integrations, Amazon did just that: It rolled the program out in the past couple of months, providing special discounts and savings to Prime members shopping at Whole Foods. And integrated it is. As a Whole Foods shopper, I was struck by the good job Amazon has done executing the integration of Prime across the store. From signage at the entrance and other points around the store touting the benefits of being a Prime member, to signage on sale products announcing savings for Prime members, to the training of staff and cashiers, the execution in the store we shop at was well done. Downloading the Whole Foods app, I signed in using my Amazon credentials; a QR code was created that is scanned at checkout, identifying me as a Prime customer and triggering the special prices and deals. As WGB recently reported, Prime is being well-received by Whole Foods shoppers. “Prime members have adopted this [Whole Foods] benefit; it's one of the fastest rates we've ever seen for a Prime benefit,” Amazon CFO Brian Olsavsky said in a conference call reviewing Amazon’s second-quarter financial results. “They've already saved millions of dollars on everything from seasonal favorites to … popular daily sales.” Beyond the obvious impact of Prime helping drive Whole Foods sales, what else is happening? What are other implications of Whole Foods being so tightly integrated with Prime? The first, and perhaps most important, implication is data. Amazon, through the Prime integration, is now able to link purchases made at Whole Foods with that same shopper on Amazon’s broader platform. To a company like Amazon, data is everything; it is the fuel that powers the Amazon engine. Amazon will gain powerful insights by understanding shopper purchasing behavior across the brick-and-mortar store and online. And there are other implications in today’s omnichannel world of retail. Amazon, the digital deity, is a master of digital engagement, providing a seamless experience across all touch points. Is that prowess transferring to the Whole Foods experience?  CART is releasing an exclusive report powered by Sense360 exposing powerful insights on the impact of Prime at Whole Foods, including: Change in Whole Foods market share. How Prime Day impacted Whole Foods and competing retailers. Do Amazon app users visit Whole Foods more often? Whole Foods' overlap with other grocery retailers. Insights by customer segment. Join the CART team on Thursday, Aug. 9, at 2:00 p.m. EST/11 a.m. PST, for a webinar that will release and share detailed insights and analytics coming out of unique research measuring and quantifying the impact of Prime at Whole Foods: Realtime Insights about Amazon Prime at Whole Foods.  Register for the webinar by clicking here. To view the original article which appeared in Winsight Grocery Business, click here.   +MORE

Dynamic Pricing in the Age of Amazon

Gary Hawkins, Advancing Retail

Richard Kestenbaum does a good job of explaining dynamic pricing and how it can be used by internet retailers in his recent Forbes article Your Friend May Pay Less Than You For The Same Things You're Buying. Online retailers have available countless points of data on you as a shopper when you visit their site including such things as if you’re a repeat visitor, what competitors sites you’ve visited, what types of products you buy, and so on. Sophisticated online retailers effectively tag shoppers to a cohort, a group or segment of similar shoppers, and may establish cohort-specific pricing. Dynamic, cohort-based pricing differs from product based demand pricing. Easy examples are airlines charging different prices based on demand or stores that increase the price of umbrellas on a rainy day. The practice of demand-based product pricing is well established in retail and much less threatening to retailers than customer-based pricing. Richard goes on to explain different scenarios when online retailers may be using dynamic pricing, calling out the practice is entirely legal as long as the differentiation is not based on race, religion, national origin, or other bases of illegal discrimination. Whether you agree or disagree with the idea of dynamic pricing, the practice is here to stay as retailers battle for shoppers. Some number of online retailers use dynamic pricing and are, understandably, reluctant to talk about their initiatives. Then there are others, like Derick O’Carroll, the CEO of Brightpearl, which provides back office services to online merchants, who bluntly states that “[Retailers that charge] people different prices for the same product are being boneheaded.” As a long-time retailer with a history of pioneering loyalty in the US supermarket sector and leading early industry learning on customer level economics and behavior, I take exception to Mr. O’Carroll’s comment. As anyone involved in supermarket retail knows, it has been - and continues to be - standard operating procedure for retailers to advertise weekly specials at low margin, sometimes even below cost, to attract shoppers to their stores. The hope is that those shoppers attracted by low or negative margin deals will purchase other products, providing an acceptable level of gross margin to the retailer. The problem is that there are some number of shoppers who are attracted by the deals and visit the store… but all they purchase are the deals, leaving the retailer with a low-margin sale or even a pure loss. When we first uncovered this insight years ago it was eye-opening. If some portion of sales is being done at low margin or even an outright loss, where are the profits coming from to cover operational costs and provide a profit? The answer: Our most valuable shoppers. In a very real sense, our most valuable shoppers were paying more than their fair share, literally subsidizing the low or negative margin purchases made by their neighbors. As a retailer I did not feel this was right. That insight led us to driving a great deal of our marketing focus, and spending, to our most valuable shoppers. As my friend Brian Woolf was fond of saying, “If a shopper is going to use a store just for the convenience of buying the low-margin sale items, then let them pay convenience store prices.” Thus started myriad programs designed to direct superior value to our most valuable shoppers through rewards, incentives, and even differentiated pricing - special low price deals available only to our most valuable shoppers. What was the result of this customer-intelligent approach to retail? A significant increase in sales from the already most valuable shoppers and, as we began to intelligently direct promotional spending to the right shoppers at the right time, a reduction in discount spending and accompanying gains to gross margin. We did this years ago and proved the impact of customer intelligent marketing. Kroger has followed a very similar strategy for more than the past decade, leveraging its vast customer data to personalize offers and promotions and pricing to great effect. Many other retailers like Albertsons / Safeway are following suit. While I understand the economic rationale of product demand-based pricing, I do not like it. It too often strikes me (as a shopper) as taking advantage of circumstances (just because its raining and I need an umbrella) that leaves a sour taste with the potential customer. But customer-based pricing makes a lot of sense. When I was a practicing retailer, I would have many shoppers question why we were giving different customers different prices on the same products. When I explained what we were doing, helping the shopper understand that as a ‘best’ customer they help subsidize the ‘cherry pickers’, you could almost see the light bulb go on at the moment of understanding. Customer-based pricing - let’s call it personalized pricing - takes sophisticated systems and comprehensive digital engagement with shoppers to maximize effectiveness. It is an approach that enables the retailer to make strategic investments against different shoppers that helps maximize the ROI of promotional spending. And when competing with Amazon or Kroger, it offers a path to success. +MORE

The Robots are Coming Home!

Gary Hawkins, CART

According to an article in Bloomberg Technology (Big Tech is Throwing Money and Talent at Home Robots) today, robots are going to be showing up in our homes within the next two years. Companies like Amazon and Alphabet (Google’s parent company) are funding secret projects to develop robotic assistants for the home. These automated butlers will be speaking with us, taking directions by voice, and able to do a growing number of household chores, going far beyond today’s Roomba. AI powered robots in the home are positioned to take replenishment to the next level. These ‘tools’ will not only take orders from household members - ‘hey Rosie, we need more Cheerios’ - but be able to suggest, plan, and eventually prepare meals.  What retailers are not prepared for is thinking of AI powered ‘bots as shoppers. We’re seeing early iterations of this as Amazon’s Dash buttons are used by a growing number of households to easily reorder a product, smart appliances automatically reorder supplies through integration with Amazon’s Dash service, and smart refrigerators track product code dates for freshness. How do retail marketers gain the next shopping trip when the decision maker is Rosie, the real life robotic assistant in the Jetson’s? How do retailers influence what’s in the basket, encourage more shopping trips, and grow loyalty over time? It’s hard to believe that the robotic embodiment of Alexa will respond to promotions or recognition the way humans do. This quandary is not idle speculation. Voice-based commerce will account for an estimated $2 billion in purchases this year, exploding to a projected $44 billion in annual purchases within the next three years. Marketers are having to face the challenge now of how to influence shopping behavior when the shopper is simply speaking to Alexa (or Google Assistant, etc.) to make purchases.  As if retailers’ don’t have enough challenges to address, now they need to start thinking about how to please Rosie the Maid. +MORE

Customer Touchpoints and the Human Experience

Gary Hawkins, CART

I was visiting someone in the hospital the other day and, looking about the room, noticed an Amazon Echo installed on the wall opposite the hospital bed. There was a sign under the device telling patients that they could ask Alexa to call their nurse or make other requests. In speaking with the nurse I learned that Amazon is working with the hospital in a pilot to test the application of Alexa in the hospital environment. Beyond the hospital, Amazon is pushing Alexa into the hospitality industry where a growing number of hotels are putting the digital assistant in rooms so guests can request services just by asking. While this alone is fascinating, and illustrates just how far and how fast voice-based technology is moving, it really opens up a larger discussion on customer touchpoints. Retailers today have a fast growing number of ways to connect with a shopper, inside and outside the store. And, more than ever before, retailers need to be mindful of the human experience they are providing across those myriad touchpoints because in today’s digital world, user experience is everything. Consider the myriad ways a retailer can touch a shopper: In the digital world that includes the website, mobile, email, text, social media, and more. A Deloitte study calls out that “more than 60% of customers interact through multiple channels and irrespective of time, place, device, or medium, they expect consistency.” In the store, retailers can engage using kiosks, mobile, and the POS. We can’t forget about print, including the weekly ad and direct mail, along with television, radio, and other mass channels. And of course, just like in the hospital, voice will soon be everywhere. A good exercise for retail marketers to go through is to create an inventory of all the touchpoints they currently use, and then alongside that create a list of other touchpoints that could be deployed or used. Once the list of existing touchpoints is created, work to understand which shoppers are using each and why. For example, do high-value shoppers regularly use your mobile app? Do more convenience shoppers gravitate to your website?  Don’t forget about your associates; oftentimes they are the only interaction the shopper has with your business. The Wall Street Journal had an article recently about how airlines are arming their flight attendants with extensive data on their flyers to facilitate service on board. As a very frequent flyer I have experienced this firsthand, the attendant addressing me by name and asking if I would like my usual drink. Retailers have untapped potential to arm in-store associates with product and customer intelligence via smartphones to help them provide better service. One of the largest challenges traditional retailers face is having disparate capabilities and an inability to provide the seamless digital experience across devices and touchpoints that today’s shoppers are expecting… and demanding. Another Deloitte study (Customer Ambitions Delivered) states “research shows 89% of market leaders expect to compete primarily on the basis of customer experience - a number that has jumped from 36% four years ago. As more companies realize the benefits of engaging with their customers along every touchpoint, customers are growing accustomed to top-of-the-line experiences. Modern customers expect a tailored experience— one with flexible purchasing options, painless technology integrations, and ample opportunities to provide feedback if they receive stellar or sub-par products or services.” Retailers can then extend the inventory of touchpoints exercise, thinking through the ‘mission’ of each touchpoint and its role in growing (retailer brand) awareness, shopper acquisition, growth, and retention. Core to this is making every interaction across each touchpoint contextually relevant to the shopper. Again, the human experience is critically important. Every customer engagement at every touchpoint provides an opportunity to learn more about the shopper and, for digital touchpoints, provide a more personalized experience. To do this requires identifying the shopper as quickly and easily as possible so that you respond with relevant offers and information. Increasingly we are seeing digital displays and signage in the store incorporate cameras and other sensors able to provide additional analytics and insights to customer behavior. Best practices: Create and maintain a list of customer touchpoints used. Consider grouping the touchpoints such as digital, print, in-store, etc. to better understand your capabilities Create a ‘mission’ for each touchpoint which forces you to think through how it can be used to support shopper acquisition, growth, and retention Work to create a platform infrastructure that ‘feeds’ each touchpoint to create the seamless - and relevant - experience shoppers want Use every touchpoint and customer engagement to learn; improving the relevancy of the engagement and learning to make the touchpoint more valuable Any digital touchpoints should be fed by realtime intelligence reflecting the latest interactions the shopper has had with you _____________________________ To learn more join the CART team along with Kate Favrow, Corporate Marketing Manager for AWG, and Roger Marin, CIO of Draeger’s, for the upcoming Customer Touchpoints webinar on Tuesday, July 24, at 2pm Eastern. View article on Winsight Grocery Business here   +MORE

The Amazon Doctrine and the Innovation Arms Race

Gary Hawkins, CART on Winsight Grocery Business

Amazon CEO Jeff Bezos has long understood the value of being out in front as technology innovation fundamentally alters the rules of competition. While other companies have long based competitive strategy on technology, what’s different is this point in time: We are at the inflection point on the exponential growth curve of computer processing power where noticeable change happens at an ever-increasing pace. Amazon is leveraging its innovation leadership position harnessed together with its vast resources to overwhelm the traditional grocery industry, relegating many retailers to the proverbial corner convenience store. Sound familiar? It should. In the 1980s, President Ronald Reagan, in what was to become known as the Reagan Doctrine, leveraged the powerful U.S. economy with the country’s burgeoning military innovation to launch an arms race with the Soviet Union. The result, as we all know, led to the collapse of the USSR and the end of the cold war. Last year’s acquisition of Whole Foods by Amazon triggered a grocery innovation arms race, throwing traditional retailers into a war few were prepared for. How bad is it? As Recode recently reported, Amazon spent nearly $23 billion on innovation research and development last year (2017), up 41% from the year before—more than any other U.S. company, That’s more than Microsoft, Intel, Facebook and even Apple spent on R&D. To put that in perspective for the grocery industry, a report from the IHL Groupstates: “Amazon’s 2016 R&D spending was more than the top 20 retailers (excluding Walmart) technology spending combined … and about 75%-85% of the top retailers’ IT budgets is spent on simply maintaining and upgrading existing systems. As such, retailers are completely outgunned when it comes to spending on IT.” And yet more evidence of the Amazon doctrine in action: The battle for voice-based commerce is already over—long before most retail executives knew the battle had even started. According to USA Today, “Purchases made through devices like Google Home and Amazon’s Echo are projected to leap from $2 billion today to $40 billion by 2022.” Here’s the kicker: “Amazon is forecast to have 70% of the voice-enabled speaker market this year (2018), per Tech Crunch. By 2020, it’s projected that there will be 128 million Alexa devices installed.” Amazon is aggressively expanding the Alexa platform, weaving it into everyday life, through partnerships with auto manufactures, home appliance makers, and even Microsoft to bring Alexa into the workplace. Amazon's Formidable Lead But innovation spending is not the entire challenge. No matter how much a retailer may spend on innovation today, it cannot overcome the lead Amazon has built. Patent filing activity provides a view into the overwhelming power of the Amazon doctrine. Amazon received 1,963 patents in 2017 and holds more patents than any other retailer in the industry (7,096). By comparison, Walmart, perhaps the most serious traditional retail competitor, holds only 349 patents. It may already be too late for a good number of traditional supermarket operators. The innovation arms race has gone nuclear as Kroger partners with Ocado to build automated fulfillment centers and Nuvo to use automated self-driving vehicles to deliver orders. Beyond digital disciples such as Kroger and Walmart, few retail companies have the wherewithal to invest so heavily in new innovation in an effort to keep pace with Amazon, the deity of digital. Innovation spending aside, many multibillion-dollar regional retailers are what I think of as digitally discombobulated. Many of these companies are trying to do the right thing, investing in e-commerce, putting the customer at the center of their business strategy and launching new digital services. But too often these retailers end up with overlapping capabilities, expensive or impossible system integrations, digital silos, and fractured user experiences. The very nature of competition has fundamentally changed and many industry executives do not yet get it. How important is user experience? Very. My wife and I regularly order restaurant meals delivered to our home. Living in southern California, we have our choice of delivery services; DoorDash, Grubhub, Eat24, Delish, Uber Eats, and many more. Yet for all those choices, Amazon Restaurants has won nearly all our business because of a seemingly simple thing: I can track the delivery driver in real-time through the app, knowing—literally to the minute—when dinner will be at our door. What should frighten retailers the most is that this battle is just getting started. As innovation accelerates, it is driving convergence between historically disparate capabilities and even industries. Companies such as Label Insight are using AI to deconstruct the typical package nutrition information into dozens or even hundreds of granular data points. Separately, health industry innovators are using cutting-edge data science to understand the individual person’s unique, granular nutritional requirements based on gender, weight, age and specific health conditions. At the same time, Apple is reported to be working on noninvasive real-time monitoring of an individual’s glucose levels. A well-known university is able to ascertain a person’s vitamin levels from a teardrop. And then there’s ScriptSave, with its long history of innovation in the pharmacy space, knitting together disparate capabilities to transform and personalize the health and wellness space. Think of it as a virtual dietitian helping guide the shopper to beneficial products across the store, ultimately driving recommendations off real-time health monitoring. And then embedding this capability at the intersection of food and healthcare.  What's the Next Move for Retailers? What are retailers to do? Is there any way to compete? Here are a few thoughts: Think integrated platforms not point solutions. This is especially important when considering customer-facing digital capabilities. Avoid disparate solutions powering up a splintered experience; one AI “brain” should be driving personalized, relevant engagement across every channel and touchpoint. Don’t build tech internally. Unless you are Kroger or Walmart, don’t think about building IT solutions internally; technology is moving too fast and has become too specialized. Instead, leverage advanced cloud-based solutions that provide a “technology putty”—leading edge capabilities molded to your brand and operations. Move faster. If there is one thing that I think endangers traditional retailers more than anything else it is the slow pace at which they are moving. There is no place for five-year plans; the game will be long over by then. Remember, you are now in a world of exponential growth of innovation—speed counts. So, is all lost for traditional retailers? Is the dominance of Amazon and the digital disciples a foregone conclusion? No, but retail executives must understand that shopper expectations now rule, that tech-based innovation is the new battleground, and that tomorrow will no longer resemble today. To view original article: Winsight Grocery Business +MORE

A New Model for Customer Engagement

Gary Hawkins, CART

Retailers today understand the importance of digital marketing and digital customer engagement. What retailers grapple with though is creating content, including offers and promotions, that is available for personalization. Relevancy is all important in the digital world. The challenge of funding personalized offers is universal and many retailers fall back on a time-tested solution: Get the brand manufacturers to pay for it. Every retailer I talk with about marketing personalization inevitably asks “Where do I go for incremental offers to power my personalization program?” These retailers are asking the wrong question.  In the near term, retailers should be asking how they can better use the existing promotional content they have. There are three key areas retailers should be focused on relative to marketing personalization: Personalized ad flyer: Rather than force your shoppers to search through hundreds of sale products to find the few that are of interest, retailers should be providing a personalized digital ad to each of their customers. This makes more effective use of existing promotions and helps drive sales by getting the most relevant sale items in front of each individual customer. Retailers doing this include Niemann Foods’ County Market stores, Coborn’s, and Foodtown. Look to TPRs: Every supermarket retailer has hundreds, if not thousands, of products on sale each week as part of a TPR (temporary price reduction) program and there are two opportunities here. The first is simply getting the most relevant TPR products in front of each individual customer as in the personalized ad flyer above. But there is a more powerful opportunity to implement a hybrid pricing strategy, providing a discount for all shoppers at the shelf but a deeper discount to shoppers as part of a strategy to grow shopper share of wallet. Look to local and regional vendors: In the Let’s Get Personal: Digital Customer Engagement in Supermarket Retail article (Part 4) I speak to retailers putting in place a digital marketing ecosystem. Looking to a mid-west supermarket operator we see the retailer opening up their digital marketing platform portal to local and regional vendors to create digital offers that are then directed to the most relevant shoppers. Everyone wins as the smaller vendors typically do not have access to sophisticated digital marketing, the customer benefits from additional savings on relevant products, and the retailer gains from additional content for marketing personalization and furthering local brands. Longer term retailers should become private label savants, instead of investing private label margin in period mass promotions, use those funds instead to support targeted promotions providing savings on products relevant to the appropriate shoppers. In similar form, retailers should consider negotiating major brand products down to an everyday low cost and using the added margin to fund targeted promotions to relevant shoppers. I am not suggesting this is easy but what I am saying very adamantly is that if retailers hope to survive going forward they must figure out how to provide savings on products each shopper wants to purchase. Kroger and Amazon are focused on this.  Retailers that have built their business on brand manufacturer marketing funds have built on quicksand. Big CPG brands are under increasing pressure as sales plateau or even decline as a growing number of shoppers avoid packaged foods and massive marketing budgets are directed to the best return on investment - increasingly that means digital marketing and shopper marketing initiatives that encompass shopper insights and targeting.  In today’s digital world, every interaction with the shopper must be made relevant to the individual customer. That means a dedicated focus on what the shopper wants, not necessarily what the brand manufacturer wants. This shift from the ephemeral riches of brand marketing funds to a sole focus on the individual customer is albeit challenging but necessary for traditional supermarket operators if they are to survive, let alone thrive, in the new world of retail. +MORE

Amazon and Whole Foods: 3 Disruptions Coming Fast to Traditional Brick and Mortar Retail

Gary Hawkins, CART

The just announced Amazon acquisition of Whole Foods is sending shockwaves through the online and traditional supermarket industries. While the reverberations from this deal will be playing out in the years to come we can already see three major disruptions that will impact traditional supermarket operators in the near term: Disruption #1: Omni-channel retailing has just been accelerated. Amazon acquiring Whole Foods represents the first true melding of the online and brick & mortar shopping experience at scale. Amazon will be leveraging Alexa’s shop-by-voice platform, its rapidly growing delivery capabilities, and Prime membership into fuzing together the online and physical store experiences. The first loser may be Instacart as Amazon reclaims the Whole Foods’ online shopping experience so it is able to extend marketing relevancy and personalization into the Whole Foods online experience. While some speculate that Amazon may just acquire Instacart I believe that Amazon will ultimately cast the service aside. If Amazon were to buy Instacart most other retailers using the service would bolt, viewing Amazon as key competitor. Further, to some degree, Amazon already has delivery capabilities in some number of Whole Foods’ markets. Disruption #2: Amazon’s marketing relevancy and personalization will transform brick & mortar marketing. Amazon will quickly extend its industry-leading expertise in online marketing relevancy and personalization into the brick & mortar experience. Amazon is a master at helping its customers navigate the millions of products sold through its site; imagine how they can help customers navigate the 40,000 or so SKUs stocked by the typical store. Amazon’s pricing algorithms tied to personalization should be scaring the hell out of brick & mortar supermarket competitors. And don’t think it is not going to happen. This is Amazon’s forté and after spending $13 billion Amazon is going to push it for all its worth. Disruption #3: Amazon will enter the payment business in a big way. Consider that Amazon has payment information stored for hundreds of millions of customers, especially the estimated 60+ million Prime members it has. Now think about Amazon letting customers pay at Whole Foods with their Amazon account. The company is already doing this at the Amazon Go store it is piloting. +MORE

The Morning After: Supermarket Retail Wakes Up to the Mother of All Hangovers

Gary Hawkins, CART

Like the proverbial morning after hangover, supermarket retail wakes up today with a pounding headache as the implications of the Whole Foods acquisition by Amazon settle in.  The astounding loss in market value as share prices dropped on the news of the acquisition has retail executives nauseated as they contemplate their changed future. One article this past Friday called out that the top 20 traditional retailers collectively lost nearly $40 billion in market value. This, while Amazon actually gained an estimated 3% in value, approximately the cost of the Whole Foods acquisition. That’s adding insult to injury for traditional retailers.  Certainly the most obvious threat is that the acquisition of Whole Foods by Amazon will greatly accelerate the industry’s move online. And the knee-jerk reaction of brick & mortar retailers will be to accelerate their plans to put online shopping capabilities in place as fast as they can to protect top line revenue. This is the type of tactical reaction that supermarket retailers excel at. See threat. React to threat. Next. The problem for traditional retailers is that Amazon’s move into physical retail carries with it much broader strategic implications than just growing online shopping. Amazon’s acquisition portends a vast transformation of the industry that will play out over the next several years. As I called out on the day of the announcement, Amazon is positioned to leverage its vast technological capabilities to meld the digital and physical worlds and innovate the future of retail at massive scale… and speed. Traditional retailers simply do not have a clue what’s coming at them. Consider that Amazon can now tie Whole Foods to its Alexa virtual assistant platform and the Dash replenishment services. Not only can the vast array of Whole Foods products be available via a simple Dash button ‘click’ but Amazon will let shoppers simply ask Alexa ‘what’s for dinner tonight from Whole Foods’ and then deliver it. Amazon’s Dash replenishment service, integrated into smart appliances for the automated replenishment of things like laundry detergent, will extend to the refrigerator and pantry. Amazon will be glad to relieve you of the burden of creating a list and going shopping or even placing an order online; your pantry and fridge will just be automatically replenished for you. Amazon will bring its supply chain prowess and efficient distribution operations to Whole Foods, lowering costs across the board. Amazon has already claimed a 20% reduction in operating costs at its distribution centers through the use of robotics; those same or similar robots will quickly find their way into Whole Foods distribution centers, and eventually even into the stores. And lest we forget, it is not just retailers that are threatened. Major CPG brands are also being put on notice. Amazon can leverage its scale to lower product costs at the same time it repackages Whole Foods private label products to make them easier to ship and deliver, taking WF private label products online through the Amazon platform and quickly growing sales volume, further lowering costs. All this at a time consumers are searching for healthier alternatives to major CPG brand products. No wonder the markets drove down the share price of manufacturers like Kellogg and General Mills after the announcement. The reduction in product costs will be used to change the perception of ‘Whole Paycheck’, Amazon growing physical store sales through more competitive pricing. Compounding the impact, it is expected that Amazon will leverage its tech know-how to lower store operating costs, such as using the self-shopping technologies being used in the Amazon Go store to eliminate the need for cashiers.  And while it grows physical store sales, Amazon will build further synergy between the online and physical worlds by letting shoppers pick up merchandise ordered online from the local Whole Foods store. Few have talked about Amazon entering into the payments world but the acquisition also tees up that opportunity as it is not much of a stretch to enable Whole Foods customers to pay via their Amazon Prime account at checkout. Shares of traditional payments related companies like First Data, Verifone, and Blackhawk Network Holdings took hits as analysts ponder the impact of Amazon on how customers pay in brick & mortar retail. First National Bank of Amazon anyone? It’s going to take more than a couple aspirin to make this hangover go away. +MORE

Amazon's one-Two Punch: Retail Marketing on the Ropes

Gary Hawkins, CART

Amazon, through its proposed acquisition of Whole Foods, is poised to surprise and delight shoppers in brick & mortar retail by helping them discover new products while relieving shoppers of the mundane burden of replenishment. Amazon’s one-two punch. For the past decade Kroger has indisputably led the industry in its ability to collect and use customer data. The company’s ‘Customer First’ initiative, anchored by targeting relevant promotions to each customer household, has grown customer share-of-wallet, helping Kroger grow sales while reinvesting margin in lower prices and service.  As a Kroger shopper my household enjoys weekly emails calling out relevant ad items along with targeted offers and coupons on products we buy. And Kroger nails it, each product surfaced to us is one we regularly purchase. But here’s the rub: we’ve come to expect that relevancy. Receiving the weekly email is no longer exciting, it has become routine. Kroger has perhaps been lulled into complacency in its personalization efforts as other traditional supermarket competitors are so far behind. But Kroger, let alone the majority of retailers who are clearly customer un-intelligent, are about to learn that providing savings on regularly purchased products is no longer enough as Amazon enters brick & mortar retailing. Consider Amazon’s ability to cull through millions of products in realtime to present those most relevant to you when you visit Amazon’s site. Amazon is masterful in helping the shopper discover new products, and in doing so, grow the customer’s lifetime value. Now take that ability and extend it into a Whole Foods store, an environment tailor made for helping foodies ‘discover’ exciting new foods and related items. Receiving savings on the same mundane products purchased each week from Kroger is boring by comparison. But there is more. While traditional supermarket retailers are still moving online or thinking about moving online, Amazon is positioned to use Dash buttons, its Alexa voice-based shopping assistant, and subscription services to relieve you of the weekly routine of replenishing consumables. Smart appliance makers have already integrated to Amazon’s automated Dash Replenishment Service; the washing machine automatically reordering detergent when it runs low. Amazon can extend that capability to your pantry and refrigerator, automating replenishment of regularly used products. Put together automated replenishment with helping the shopper discover exciting new products and retail marketing enters a new paradigm; a world where even targeted offers on products regularly purchased is perceived as ho-hum. Marketing relevancy is now table stakes; product discovery and replenishment is the new tie-breaker. This is Amazon’s one-two punch that will have traditional retailers on the ropes. Supermarket retailers are woefully unprepared for this looming battle as a majority of retailers do not capture customer identified purchase data, and even amongst those that do, their efforts are weak at best. Traditional retailers have little to no defense against this powerful one-two punch and Jeff Bezos must be salivating at the thought of leveling Amazon’s marketing machinery against the (by comparison) neanderthalian marketing of so many brick & mortar retailers. And to those retailers scattered across the vast American landscape thinking they are safe because there is no Whole Foods store nearby: Location is no longer a competitive barrier. Amazon will repackage Whole Foods private label products to make them easier to ship (think snacks, cookies, etc.), making many Whole Foods products available to shoppers regardless of location. It is ironic that Whole Foods earlier this year engaged with Dunnhumby to bring to the company the same customer focus that was so successful at Kroger. The approach used by data consultancies like Dunnhumby and similar providers is massively expensive, relying on dozens or even hundreds of data analysts. What’s more, the approach based on customer segments and aggregate scoring along with iterative processing was formed with the constraints of technology available a decade or more ago, not using today’s tools.  And think of the potential to link the Amazon shopper online to the transaction inside the store, something easily done by enabling customers to pay with their Prime account at checkout. Amazon’s big data marketers are probably drooling over the insights enabled by connecting purchases made online with purchases in the store and then leveraging those insights into growing customer lifetime value. But there is more to Amazon’s success than marketing relevancy. Amazon understands the importance of the complete digital user experience, from suggesting products of interest to the shopper to personalized search, making relevancy and discovery pervasive across their user experience. Traditional retailers will be challenged to replicate this seamless, personalized experience across the disparate solutions used today to power websites, eCommerce, mobile apps, loyalty, and more.  There is a glimmer of hope for traditional retailers. New capabilities leveraging the latest tech - AI, machine learning, big data, and the cloud - are entering the market. Solutions like that provided by Birdzi give retailers the ability to stay continuously connected and engaged with shoppers through using hyper-personalization driven by vast knowledge of the individual shopper and realtime personalized search via the retailer’s website and app. Combined with the ability to extend that personalization into every digital channel including eCommerce through APIs and powerful white-label apps gives traditional retailers a fighting chance to blunt Amazon’s one-two punch by providing their own cohesive customer experience.  Solutions like this, combined with other capabilities entering the market such as AI powered promotion optimization by companies like Daisy Intelligence, robotics as a service for distribution centers and picking online orders, delivery robotics like Starship Technologies, along with AI powered bots like provided by BoodsKapper for customer service, can help traditional retailers innovate their way out of the corner of the ring where they are sure to be pummeled. +MORE

Lessons From the Lily Pond: What Retail Execs Need to Know

Gary Hawkins, CART

As Amazon enters brick & mortar retail the ability to innovate at scale and at speed takes on new meaning yet many retail organizations are ill-prepared to compete as executives fail to understand the new playing field. Everyone is familiar with the phrase ‘exponential growth’ but few truly understand the meaning and power behind the words. As technology grows exponentially fueling new capabilities and competitors across the supply chain, retail executives need to address innovation comprehensively, not as individual developments. To employ an oft-used expression, too many retail executives are missing the forest for the trees. Imagine a small pond that sprouts a single lily on June 1 and doubles its number every day for a month. Further assume that the lilies are of such a size that at the end of the month the entire pond is covered with the pesky plants. * By Day 20 lilies cover roughly 0.01 of the pond—only one-tenth of one percent. What transpires in the next 10 days, though, is nothing short of transformational. So what does this have to do with retail? Just this: Technology — more specifically, computer processing power — is growing exponentially. We have lived our lives to date in the first 20 days of the lily pond; a comfortable, seemingly linear, pace of change that we have become accustomed to. Tomorrow will be much like today, that is much the same as yesterday. But this is no longer so. As Ray Kurzweil, noted author and technologist, has called out, we are at the knee of the technology growth curve and from this point on the speed and scope of innovation will only accelerate. Back to the lily pond analogy and why this is so important:  In the beginning most people would not recognize this as an exponential trend. The growth of the lily pads is so slight that it’s barely noticeable.  This negligence causes people to miss what’s happening, ignoring the change that’s occurring. By the time people finally do understand how fast things are progressing–say on Day 28 of the pond example–and hope to either capitalize on its explosive growth or avoid being overwhelmed by its growing power, it is too late. Tomorrow will no longer be much like today… and retailers are not prepared. Retail executives need to think in terms of how to address innovation cohesively across their organization, not in terms of discrete developments impacting specific operations. And the growth of transformative and disruptive capabilities is just getting started. Like atoms colliding to create new elements, new capabilities are crashing into new technologies, powering a fast growing tsunami of innovation that threatens to overwhelm traditional brick & mortar retailers. Questions retail executives should be pondering: How do I ensure that my company is aware of all the fast-moving new innovation that is coming into the industry? Once discovered, how does my company filter through countless new capabilities to understand those to focus on? With that focus, do we have the ability to test and pilot new technology in parallel across all parts of our organization (manufacturing, distribution, retail, customer engagement) to understand the impact? How do we deploy new capabilities across our company operations at an increasing pace? Do we allocate budget to learning about, testing, and deploying new innovation? Do we have the skill sets within our team to help us think through the implications and use of new capabilities? Is our company culture supportive of the ongoing — and increasingly fast — change that is inherent with new innovation? Does our organizational structure support innovation? Do we need a CIO (Chief Innovation Officer)? To remain relevant, retail executives must develop an all-embracing strategy and plan for innovation as the risk of disruption at any point across the supply chain grows by the day… as the recent move by Amazon so clearly illustrates. Conversely, the opportunity to leverage innovation into business gain is available to those retailers who understand how the environment has changed and dedicate resources to the challenge.  What’s your plan? * The lily pond story is often used to convey the power of exponential growth. The example used here was drawn from ‘Take a Swim in the Pond of Tomorrow’ by Jack Uldrich. +MORE

5 Steps to Optimizing the Brick and Mortar Store

Gary Hawkins, CART

Traditional retailers have already lost online momentum but have an opportunity to win the in-store battle. There is no doubt that Amazon’s proposed acquisition of Whole Foods is going to accelerate online grocery shopping, putting increasing pressure on optimizing the performance of the brick & mortar store. Beyond growing online sales, Amazon will bring its data science to the physical store, analyzing shopper behavior just as it does behavior across its digital properties. Merriam Webster broadly defines ‘genome’ as the genetic material of an organism. The retail industry has a unique opportunity to decode the brick & mortar store ‘genome’ and leverage improved understanding and new capabilities into dramatically increased store performance. And like the human genome project, the benefits are substantial and wide-ranging. As one of the first supermarket operators to deploy video analytics years ago we found that specific products would invariably drive increased aisle traffic along with associated product sales. We learned the impact of on-shelf vs. off-shelf displays. Imagine doing promotion planning — or strategic personalized marketing — with a goal of maximizing shopper traffic across the store, knowing that as department, aisle, or category traffic increases, the sale of adjacent products also increase. In-store analytics represent a powerful opportunity for brick & mortar retailers to optimize store performance. Here are five steps to optimizing the brick & mortar store: Step 1 - Conversion rate scorecard: Ask nearly any store manager what their department, aisle, or category conversion rates are and you’ll probably get a blank stare. Even the best retail operators have very little understanding of true customer behavior in the store, let alone how it can be positively impacted. There are a growing number of solutions using mobile device detection or digital video available to retailers to analyze the flow of customers in and around the store, including dwell time in specific areas and even purchase conversion. Retailers should create conversion rate scorecards showing customer traffic entering the store and then the percentage of shoppers going to departments, aisles, and categories. These scorecards can also reflect dwell events (the number of shoppers spending more than a specified amount of time in front of a category) and purchase conversion. Digital video solutions using anonymous facial recognition are able to measure customer sentiment, measuring how many customers are happy, sad, frustrated, angry, etc. in different parts of the store. Other solutions using 3D motion sensors are able to understand behavior at the category, knowing what specific product a customer picks up and from what shelf. Step 2 - Overlay with merchandising activity: Each year brand manufacturers and retailers pour billions of dollars into in-store merchandising events from special displays to special signage and more. Rarely is the impact of this promotional activity measured let alone the larger impact to customer behavior. Retailers need to consistently and accurately track merchandising activity in each store each day and week. This would include location of on-shelf and off-shelf displays, special signage, endcap displays, and other merchandising activity. Step 3 - Customer-intelligent product selection: Kroger and a (very) few other retailers leverage customer intelligence into store-level product assortment plans but the vast majority of retailers continue to stock their shelves with products that have always been carried, that their vendors ship in, or that syndicated data shows are good sellers in the market. No heed given to an understanding of the customers actually shopping the store. Retailers can gain these insights either through loyalty programs which provide customer-identified purchase data or by using anonymous facial recognition capabilities which provide customer demographic data (gender, age, ethnicity). Step 4 - Automate out-of-stock notifications along with merchandising and pricing compliance issues: There are a rapidly growing number of solutions available to help retailers automate and quickly discover product out-of-stocks, promotion compliance failures, too little or too much product inventory and even pricing issues around the store. Robots equipped with a full range of cameras and sensors are able to roam the aisles, neatly avoiding customers, to peruse the shelves. Cart mounted devices provide similar information and notifications as customers shop. And fixed camera deployments on high-volume categories or areas of the store add another layer of data. Step 5 - Tie to realtime in-store marketing: Retailers such as Coborns, Foodtown, and Niemann Foods already have the ability to message a customer in the store based on realtime location. Imagine the power of knowing that if traffic in aisle 5 is lower than usual on Tuesday afternoon, communicating a promotion on a relevant product in that aisle to customers in the store can help drive aisle traffic along with sales of adjacent products. Ignorance of true shopper behavior in-store will no longer stand as Amazon leverages its vast technological prowess to understand and then optimize the physical store. As the market stands today, traditional operators are behind the curve in online sales but the battle for physical store optimization is just getting started. Decoding the store genome will help retailers gain significant advantage as they leverage new understanding paired with new in-store marketing capabilities to pull ahead of traditional competitors and better position themselves for Amazon’s entry into brick & mortar retail. +MORE

Five Years On: Revisiting "Will Big Data Kill All But The Biggest Retailers?"

Gary Hawkins, CART

Nearly five years ago I wrote a piece for HBR that called out how the largest retailers were leveraging big data to provide sophisticated personalized marketing to their shoppers in efforts increasingly funded by CPG brand manufacturers. I further called out the threat this represented to the significant independent retail sector. Sadly, little progress has been made despite the availability of cost-effective capabilities designed to level the playing field. As a retail armageddon approaches, triggered by Amazon’s entry into brick & mortar retail through its acquisition of Whole Foods, all retailers regardless of size are under threat as Amazon is poised to apply its technological prowess to transforming shopping. While I have little sympathy for the largest retailers who have taken a laggardly approach to innovation, I have great concern for the sizable independent retail sector that provides a rich diversity in local communities across the American landscape. Five years ago it was clear that the development of shopper marketing budgets used to fund targeted promotion initiatives at Kroger and other big retailers represented an existential threat to independent retail who largely lacked the requisite big data and targeting capabilities required to access those monies. As the biggest retailers gained growing access to industry marketing funds — along with growing prowess in driving sales and margin through intelligent promotion targeting — independent retailers were increasingly falling behind, harmed by falling marketing funds and focus on mass promotion while shoppers increasingly expect marketing relevancy. And now, as the retail industry is poised to transform as the physical and digital worlds meld to create a new shopping paradigm, independent retail is, if anything, even further behind. So why has the situation become even more dire for independent retailers? And what should independent retailers do to stay in the game? Realize the world is all about data. Larger retailers have no choice but to have data discipline, maintaining accurate data to power all the various systems. It is frightening in some cases to see the lackadaisical attitude smaller retailers have taken to accurately maintaining even basic data like item descriptions, item categorization, and pricing. Data is the currency of the new world of retail and without it retailers cannot even enter the game. Embrace digital… comprehensively. Some independent retailers have tried to embrace digital marketing, putting in place different solutions for online shopping, websites, email, mobile, social media, and other capabilities. But all too often these are scattershot initiatives, no central planning or strategy in place to guide them. You see this when you come across a retailer with multiple apps; an online shopping app, the usual basic grocery list app, and maybe a loyalty app. Or the retailers that have loyalty and online shopping but do not connect the two. Retailers need to put in place a solution that provides comprehensive capability across channels to provide uniform communications and user experience.  If it’s digital it better be relevant. Shoppers today want the world their way, accustomed to the relevancy and personalization provided by Amazon and other online merchants. Brick & mortar retailers are way behind in providing marketing personalization to their shoppers. And not just relevancy but strategic personalization that uses AI and machine learning to grow customer share-of-wallet for the retailer through hyper-personalization. Aggregate data and promotion execution platform. Independent retailers need to work closely with their wholesalers to aggregate transaction data and better access industry marketing funds from brand manufacturers. It is worrisome that so many independent retailers cannot even take advantage of scan-down deals because the data supporting units actually sold is not readily available. But this issue goes beyond just data collection; wholesalers and their retail customers need to have a platform across disparate retailers capable of executing complex promotions and delivering targeted promotions.  These are just a few of the things that independent retailers and their wholesalers need to focus on fast if they are to survive, let alone thrive, as retail moves into the future. +MORE

Here There Be Monsters

Gary Hawkins, CART

Early mapmakers would place illustrations of dragons and sea monsters in unexplored locations on their maps. The phrase ‘here there be monsters’ came about as a reference to these dangerous areas and was popularized in the movie ‘Pirates Of The Caribbean: The Legend Of The Black Pearl’.  I frequently write and speak about the growing innovation gap, the widening gulf between the exponential growth of technology and the more linear adoption of tech-driven capabilities by retailers. This innovation black hole represents a significant - and potentially dangerous - blind spot to retail executives. This is where new disruptive capabilities and new competitors originate.  While Amazon has been on every supermarket retailer’s radar for some time now it was only when Amazon announced its acquisition of Whole Foods that the threat took on an immediacy. How many supermarket retailers that have pharmacy operations are aware that Amazon already has a significant - and fast growing - presence in the healthcare industry and the company is working to position itself to disrupt the pharmacy business?  Apple, Google, Amazon and others are rapidly growing development teams and massively investing in digital assistants like Siri and Alexa, expanding the artificial intelligence powered technology to be ever more powerful. These technology leaders are convinced that voice is rapidly going to become the next interface for computing, leaving keyboards and mice behind. Walmart recently partnered with Google to enable shoppers to use Google’s Home assistant to order from Walmart. Microsoft’s Cortana virtual assistant is partnering with Amazon’s Alexa. And yet how many supermarket retailers have voice-based shopping capability today?  Retail executives consistently fail to understand the pace of change and how consumer of new technology is far faster than it has been in the past. Something like voice-based shopping can go from ‘isn’t that interesting’ to mainstream activity in a matter of months, leaving retailers scrambling… and falling further behind. And retail executives have no view to what new innovation is coming out of the black hole next.  In today’s hyper-competitive business world it is what you don’t know and what you don’t see happening that is what gets you. And the growing innovation gap represents the largest single threat to traditional brick & mortar retail today. It is in this gap that ‘here there be monsters’. +MORE

Avoid Digital Confusion: Create A Technology Roadmap

Gary Hawkins, CART

I am shocked by the number of multi-billion dollar retailers I speak with that spend hundreds of thousands and even millions of dollars on technology solutions without a clear plan or even understanding of how they fit together. Its almost like these retailers have created a shopping list - we need an online shopping solution, digital coupons, customer segmentation tool, analytics platform, mobile app, and promotion optimization - and then seemingly contract with the first solution they come across that appears to provide that capability. Checking that box they then move on to the next item on the list. Its like walking through the grocery store, list in hand… milk ‘check, eggs ‘check’. After securing all the items on their list, and spending even more resources on implementation, deployment, and training, the executives then realize that some of these solutions actually need to be integrated or, even worse, the executives realize that they have just spent a fortune for multiple solutions from different providers that have a large degree of overlap.  And then there is my favorite: “I’ll outsource my marketing personalization and digital strategy to our online shopping solution provider.” Does it really make sense to handover your marketing personalization strategy to a solution provider who touches only a small portion of your shoppers (those shopping online)? Especially when strategic personalization is quickly supplanting mass marketing as the most effective go to market strategy when competing with Amazon and Kroger, long known for its personalization initiatives. Digital marketing and the requisite strategic personalization are not ‘bolt-on’ capabilities, this strategy goes to the heart of how retail goes to market in today’s marketplace. The number of retailers who actually develop a well constructed roadmap of required capabilities seems to be small. And even fewer retailers give thought to how different solutions come together to provide the capabilities required by today’s marketplace let alone tomorrow’s.  Technology-driven capabilities are mission critical for retail success today and the importance of having a comprehensive digital strategy grows by the day. To be fair, navigating the world of technology is challenging as new innovation entering the industry with new capabilities grows by the day, established companies move too slowly, and the practice of ‘vapor ware’ continues on.   CEOs and all senior executives at retail companies need to understand the need for a tech capability strategy focused around providing a comprehensive, engaging experience for shoppers while providing core business capabilities all brought together to minimize vendors and capability overlap. CART’s involved in a project with a well known regional retailer to create a scorecard helping the retailer understand how their digital capabilities compare to key competitors and best in class retailers. Growing from that is putting together a roadmap of needed or recommended capabilities that serve as a plan for identifying potential solution providers and clearly identifying what capabilities are needed and how they fit together. This is an approach that can be used by other retailers to minimize the expensive mistakes that too many are making. +MORE

Omnichannel to Omnipresence

Gary Hawkins, CART

While the majority of traditional retailers are still trying to move online and develop a digital presence, leading retailers are focused on a cohesive digital omnichannel strategy, providing the same content and messaging across multiple channels like email, web, mobile, etc. The problem is that the largest tech companies who are now competing for grocery sales are moving fast to develop an omnipresent strategy. By omnipresent I am referring to the ability of a shopper to engage (shop) with a retailer anywhere and at any time. And increasingly this is going to be done by talking as voice becomes the primary way we interface with technology. It has been reported that Amazon accounted for approximately half of all online sales over the recent Thanksgiving weekend. It has also been reported that Amazon sold millions of Alexa-enabled devices over the weekend. Amazon is quickly growing the Alexa platform, moving from home devices like the Echo speaker to embedding the technology in cars (deals with Ford, Volkswagen, and others) and even taking Alexa into the office. What this means is that a shopper can now add products to his grocery list while driving to work in the morning, place the order simply by speaking, and have the products waiting at his door when getting home later that day. Here’s the scary part: Amazon is forecast to have 70% of the voice-enabled speaker market this year and is projected to have over 120 million Alexa devices in homes and offices within the next 2 years ( It is this embedding of technology into a user’s life that some experts say is Amazon’s Trojan Horse, the technology weaving its way into how a user not only interacts with the world but - increasingly - as the gateway to fulfilling needs. Amazon is in the business of selling stuff and it is using its vast logistics capabilities and vast portfolio of products to increasingly be able to provide you whatever you want whenever you want it. And all you have to do is ask Alexa for it, you don’t even have to pick up your smartphone. There is no doubt the market for home-based digital assistants is exploding as Google grows its Assistant digital assistant platform and Apple enters the market in the coming months. While many supermarket retailers are moving online (finally) the frontline battle has moved. That frontline is now taking place within the digital assistant space and is represented by Alexa, Amazon’s Dash buttons and integration of its Dash Replenishment Service into home appliances. As we regularly call out, the pace of technology-fueled innovation is increasing and brick & mortar retailers must be focused on where technology is moving to, not where it is today. That nearly every retail sector will move online is a foregone conclusion, and more than ever this applies to groceries. But retailers must be looking at what capabilities and services they need to provide to keep pace with Amazon and the other tech giants because these are the new competitors. +MORE