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 www.advancingretail.org.
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.
About the Author
President and CEO, National Grocer's Association
On July 1, 2010 Peter Larkin became the president and chief executive officer of the National Grocers Association (NGA). NGA is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry, representing over $131 billion in annual domestic sales. He also serves as President of the NGA Research and Education Foundation.
Prior to joining NGA, he established his own government relations consulting firm, Larkin Public Affairs, in 2008. From 1996 to 2007 he was President and CEO of the California Grocers Association and also served as the President of the CGA Educational Foundation and as an officer of the California Shopping Cart Retrieval Corporation (a for-profit subsidiary of CGA).
From 1989 to 1996, Larkin was Vice President of State Government Relations and Environmental Affairs for the Food Marketing Institute (FMI) in Washington, DC. Prior to FMI, he managed government and media relations programs for The Kroger Co. He also held similar positions with Philip Morris U.S.A. After earning a bachelor’s degree in political science from the University of Vermont in 1976, he served as legislative assistant to U.S. Representative Donald Mitchell (R-NY).
Larkin serves on the Board of Directors of Puricore PLC, the Board of Directors of Save Mart CARES, the Board of Directors of National Cooperative Bank, the Advisory Board of Encore Associates and the Board of Trustees for Making Change. Larkin is a member of the US Chamber of Commerce Committee of 100 (top trade association executives in the United States).
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