By Sherry Smith, Triad
Consumers are driving a retail revolution. The path to purchase
has become a complex fusion of multiple channels and devices, and many stores
are struggling to keep up. As of August 2018, several major U.S. retailers had
announced the closure of a record number of stores, with Toys ‘R’ Us announcing
881 closures, Walgreens closing 600 outlets and Sears revealing plans to close
284 stores, according to Statista.com.
Yet retail is very much alive. In October, Moody’s revised its
2018 forecast for U.S. retail from “stable” to “positive.” And in early
February of this year, Toys ‘R’ Us announced it’s returning to life as Tru Kids
Brands. But to embrace this brave new world, the greatest asset for retailers
in their quest for survival — grocers in particular — will be to adapt, even if
it means they must cope with meeting certain unconventional trends head-on.
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1. Shop floors will transform into click-and-collect spaces
At least one top grocer will convert its physical stores into a click
and collect/delivery warehouse space, and this will kickstart a trend.
Current grocery stores are huge, adoption of click and collect is
growing, demand for a broader range of delivery formats continues to increase,
and foot traffic into grocery stores is slowing. Grocery chains are responding
by making significant financial and operational investments — just look at
Kroger rolling out Ocado automated warehouse technology, for example.
At least one major grocery chain will make this radical change.
Roughly 25% of their current square footage will be converted into warehouse
and “pick” space for click and collect and delivery purposes. Remaining store
space will be used to reinforce the store as a “destination,” offering a point
of differentiation from competitors.
2. Instacart will be snatched up by a big box retailer or major
grocer
In December 2017, online delivery service Shipt was acquired by
Target for $550 million. Instacart is next in line to be snapped up — the
result of what’s been referred to as “the Amazon Effect.”
Amazon acquired Instacart’s biggest customer, Whole Foods, in
2017, but Instacart’s partnership with Whole Foods comes to an end very soon.
With behemoths like Amazon, Walmart and Kroger getting into the
online grocery delivery space, other grocery stores need to improve their
online delivery and curbside pickup offerings in order to compete.
Instacart has the latest technology to manage such logistics.
It’s a red-hot target for any retailer that needs to up its game — and hit the
ground running.
3. Personalization will move to the aisles — with some Disney
magic
The RFID-enabled plastic bracelets worn by visitors to Walt
Disney resorts will soon arrive in retail stores. Shoppers will wear similar
items as they shop, and data about the products they browse and purchase will
automatically integrate with loyalty card data.
Since not every consumer is going to want to don an additional
“wearable,” grocers may opt to utilize the RFID capabilities on shoppers’
mobile phones with Near Field Communication devices in-store to accomplish the
same goal.
Information collected will be applied both in-store and online
to drive personalization and product recommendations.
4. Two major U.S. grocery chains will partner with non-grocery
retailers
In order to diversify and transform, two large grocery chains
will forge partnerships with non-grocery retailers and/or a multi-product
brand, embodying the hypermarket concept that is popular across other global
markets.
Motivated by the need to compete with Amazon, Walmart and
Target, these chains will begin to look more like a Super-Walmart or Meijer,
offering the same level of diversity as the hypermarket category.
Just look at U.S. department store Kohl’s, which has recently
added Aldi concessions to a number of its stores as part of a pilot project.
Change is afoot.
5. Picking technology will increase its pace in the U.S.
While click and collect and delivery have become mainstream in
many global markets, like the UK for example, the U.S. is lagging behind
woefully. This is partly due to the limited selection coupled with additional
fees that outweigh the convenience benefit.
Automated picking technology, such as that pioneered by Ocado,
will take hold in the U.S., finally making grocery delivery widely profitable,
while being affordable to shoppers. As a result, consumer adoption of grocery
delivery will increase sharply and finally approach a tipping point.
Sherry Smith oversees all
facets of Triad’s business as CEO,
including the evolution of its capabilities and services, and continued growth
across multi-functional teams. Her 20-plus years of experience in advertising,
both in the traditional and digital realms, results in revenue-driven solutions
for the world’s top retailers and brands.
