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What The Modern Grocery Store Can Teach Other Brick-And-Mortar Businesses

  • Written by  Tom Buiocchi, ServiceChannel

0aaaTom Buiocchi ServiceChannelOn a recent family visit to upstate New York I found myself in DeCicco & Sons, the local grocery store chain, when my niece suggested we grab a drink. I was enthusiastic but a bit befuddled as she led me through the frozen section until I saw that, lo and behold, this grocery store had a microbrewery right on the premises.

Sipping my IPA and watching the shopping carts drift by got me thinking that few industries are innovating on their brick-and-mortar experience at the pace of grocery stores, and there’s a lot that restaurants, banks and any other businesses with physical locations can learn about attracting and maintaining relationships with digital-native consumers.

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Amazon is on a quest to reinvent the grocery shopping experience and is already infusing Whole Foods with its vision for a high-tech future. Likewise Microsoft has partnered with the grocery chain Kroger to trial the “connected store” experience as a proof-of-concept before full-scale rollout. Innovations in grocery stores aren’t only about bleeding-edge tech (unless robots can brew beer) — some are just smart business thinking. Here are some of the ways that developments in the grocery world can serve other brick-and-mortar industries well.

The Multi-Function Destination

Grocery stores are providing more and more services to complement their own. Bank branches, coffee shops and pharmacies are now commonplace in supermarkets, and now they are adding additional services like instant healthcare kiosks and, yes, even bars. It’s about giving people more reasons to come in and stay a while. This practice is so prevalent today the PRSM named mixed-use retail as the trend to watch in 2019 and the basis of a retail renaissance.

Banks are starting to latch onto this trend, such as Capital One with its Peet’s Coffee cafes. Most people don’t go to a bank just to deposit cash anymore; many are looking for investment advice, loans and other services. It makes sense for banks to provide comfortable couches and an environment that helps people relax while they wait for appointments. The fashion and retail industries are experimenting with similar concepts, like the Supreme store-slash-skatepark in Brooklyn. The fundamental definition of what a “store” should look like is changing rapidly, and brick-and-mortar chains increasingly need to become “destinations” to compete.

Brands need to remember, however, the real reasons shoppers come to (and return to) their stores: to shop! Our recent survey shows that about half of shoppers want to browse products and take them home that day, but two out of five have had trouble with disorganized inventory or empty shelves. So if you are going above and beyond to give the shopper a unique experience, you must be sure that the basic in-store shopping experience is up to par: two out of five shoppers also said disorganized inventory would make them less likely to return to a store.

Blending The Best Of Online And In-Store Experience

Instacart and the grocery chain Wegmans are now testing curbside pickup in a few markets, allowing you to shop online ahead of time and have your pre-bagged groceries waiting for you, without worrying about delivery fees, tipping or parking. Kroger will be rolling out digital shelves, which communicate with shoppers’ mobile lists and light up to guide them to the right item on the shelf. The shelves can even make personal recommendations based on what your mobile app knows about your shopping habits.

Some department stores are blending online and in-store in a similar way. Shoppers can go online and choose what they want to try on, then have their items waiting in a fitting room when they arrive. There’s a huge opportunity for the smart mixing of online and in-store across all industries. At the doctor’s office, for instance, I would love to be able to fill out the required forms online ahead of time or have it done for me automatically (ZocDoc has been trying to solve this problem for a while).

Improving Convenience

Many of the latest grocery store improvements are about convenience. Some stores are finding ways to evolve beyond just self-checkout and offering completely cashless stores with no checkout at all. Taking a cue from popular meal-kit delivery services, Publix now offers ready-to-go meal kits in store, graded by complexity of preparation, to help shoppers save time rounding up ingredients or deciding on menus.

Fast casual chains like Chipotle and restaurant-cum-tech company Eatsa are pushing the convenience envelope, but it’s easy to imagine analogs in sit-down restaurants: busy 9-to-5ers with short lunch hours would appreciate the convenience of mobile or even in-store touchscreen ordering, now a ubiquitous presence in airports across the nation. Those with eating restrictions could more easily request personalized menus. On the payment side, restaurants have been slow at adapting to mobile or other payment options that save diners the hassle of multiple-credit card arithmetic and eternal tipping debates.

Better Use Of Mobile

Scan-and-go style shopping using mobile is quickly turning into a favorite for its convenience and speed. Additionally, chains like Albertsons Just for U have well-implemented loyalty apps that anticipate consumers’ needs and offer hyper-relevant coupons and deals. Many stores, like Starbucks and Dunkin’, serve personalized coupons to their respective mobile apps right when customers walk in the door, but too many other industries have been slow to combine mobile with the in-store experience. Our recent survey on brick-and-mortar retail shows that 1 out of 5 consumers have walked out of stores that lacked the tech features they wanted — and mobile app integration is in the top three of tech amenities that shoppers do want.  

When you visit someone in a hospital, for example, you often need to go to the ER or the information desk to figure out which ward to go to. It would be great if hospitals could push that information to an app as you enter the building, and even provide turn by turn directions so you’re not wandering endless corridors trying to find a sick relative. For banking, meanwhile, a lot of mobile apps still leave much to be desired, and there’s a significant opportunity to offer a better customer experience. Movie theaters are getting better at enabling mobile ticketing, but it’s easy to imagine all concert venues, theaters and entertainment locations allowing showgoers to do a lot more with mobile.

Final Thoughts

Grocery stores are at the forefront of brick-and-mortar innovation and other industries should pay attention to what consumers are responding to. Kroger expects to build up to a $400 million operating profit through smart investments in the customer experience, including through enhanced digital offerings and in-store optimization. Consumers still love browsing in physical stores but they also want fun, convenience and a digitally integrated experience. There’s a lot to be learned from this core industry.


 

Tom Buiocchi joined ServiceChannel as an Executive Director in 2014. He has more than 30 years of experience leading growth companies in both technology and energy services, including Jeda Networks (interim CEO), Drobo (CEO), Mohr Davidow Ventures (Executive in Residence), Brocade Communications (CMO), Rhapsody Networks (Vice President Marketing), Enron Energy Services, FMES (co-founder and COO), and Hewlett-Packard. Buiocchi has a Bachelor of Science in Electrical Engineering from Union College and a Master of Business Administration from Northwestern’s Kellogg School of Management.

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