There’s no doubt that demands on grocers to differentiate and compete are evolving at a rapid rate, and food assortment aside, factors such as technology, equipment efficiency, sustainability and store design can make or break a retailer.
To help grocers navigate the winding roads toward the future of grocery, WGB enlisted a cross-section of leading industry experts to share their observations on the foremost equipment and design topics that have been leading the conversations this year. From those interviews, nine categories emerged, each of which play a critical role in a store’s overall success and productivity.
Cashierless Is Coming Fast
More and more retailers are adopting scan, bag and go concepts, but Andrew Swedenborg, director of business development for Fort Worth, Texas-based design firm Paragon Solutions, believes the technology may be on its way out before it’s even begun. Store concepts such as Amazon Go demonstrate a future in which technology could analyze what’s in a customer’s basket and allow them to check out right on their smart devices.
With the rise of cashierless models such as Amazon Go, Swedenborg equates the scan, bag and go scenario to Facebook overshadowing MySpace in the early 2000s. Despite the buzz around scan, bag and go, Swedenborg believes that, at a certain point, “people are going to yearn for that next technology because the scan and go is not that interesting.”
Swedenborg also urges retailers to have a balanced risk/reward mindset when it comes to capital investments. “Just because the other guy’s doing it doesn’t mean you have to do it, too,” he says, especially if there is a lack of resident expertise needed to operate or maintain the equipment. “You want be on the offensive side, meaning you’re remodeling to engage and [retain] customers.” Another aspect retailers need to consider with remodeling projects, Swedenborg says, “is to make sure you push the limits but recognize what you’re capable of.”
Adaptable, Multitasking Equipment
Retailers must always think of the purchase of new technology and equipment as a long-term investment, says Guy Dille, retail business area leader and N.A. service business development for Columbus, Ohio-based kitchen equipment manufacturer Mettler Toledo. One way to ensure long-term profitability is to look for equipment with multiple uses, such as weighing technology that can run a playlist on its scale’s customer display or deli board for in-store marketing while it manages a take-a-number program, Dille says.
“A centralized software platform and distribution can reduce the cost and time of servicing your technical infrastructure and helps ensure scale alignment across your enterprise,” he says, pointing out that this type of technology is gaining traction in grocery in tandem with the advent of nutrition labeling regulations that will go into effect in 2020. Such a centralized system makes it far easier for retailers to remain compliant with federal and local standards in light of functions such as seamless notifications to managers of errors and efficient problem-solving that may have been otherwise been overlooked.
Markus Glueck, EVP for Rolling Meadows, Ill.-based kitchen equipment manufacturer Rational North America, says flexible and efficient equipment can also help grocers keep up with changing diets, flavors and food styles. “They should look for one piece of equipment that can adapt as new concepts occur, while also being energy-efficient, space-efficient and labor-efficient to keep costs down,” he says, pointing to combi ovens as a prime example due to their ability to “grill, roast, fry, poach, braise, steam, bake, dehydrate and cook overnight.”
As labor and operational costs continue to rise and grocery prepared foods becomes an increasingly more important magnet for shoppers, investing in equipment that reduces labor is critical, says Tami Olson, director of national accounts—retail for Menomonee Falls, Wis.-based equipment manufacturer Alto-Shaam.
Grocers should look for foodservice equipment that offers programmable and efficient cooking and cleaning functions, such as multi-oven systems and self-cleaning rotisseries, and products such as heated shelf merchandisers that allow them to display pre-prepared food and “provide quick meal solutions for their on-the-go customers" while helping to boost impulse sales, Olson says.
This concept is also crucial in deli operations, says Dan Assell, market manager, food machines, for Troy, Ohio-based equipment and technology manufacturer Hobart, who points to the challenges of finding employees in today’s market. As such, labor-saving equipment will not only increase efficiencies but also provide better service to customers at lower costs. “It’s important that the labor available has foodservice equipment, like slicers, that keep them productive and minimize unnecessary downtime in service and production,” he says. “Functioning to the fullest in this grocery space is key.
Next-Generation Design Planning
Mark Hardy, president of Chicago-based virtual-reality service provider InContext Solutions, says virtual reality is cutting down operational costs and time requirements associated with the design and remodel of a store, and it also “eliminates geographic barriers, allowing stakeholders to collaborate anytime, anywhere, eliminating the need to travel, while also maintaining new transformative ideas out of the eyes of competitors.”
When imagining these store redesigns, Hardy urges retailers to, in addition to creating a logical store flow, find ways to inspire or create excitement for shoppers and create “the feeling of being special, whether in their daily routines with the family at home or entertaining friends. That is what will differentiate and keep them wanting to come back.”
These considerations for store design will become increasingly important, he says, as stores become “micro-fulfillment centers” for home delivery or click-and-collect orders that require a larger or different assortment of SKUs.
“Finding that right balance will be key to having a unified digital-physical shopper experience,” he says.
Energy Efficiency Through Internet of Things
While energy efficiency is important, retailers must also consider the long-term sustainability of their equipment decisions as environmental legislation progresses, says Andre Patenaude, director of food retail marketing and growth strategy, cold chain, for St. Louis-based Emerson Commercial and Residential Solutions.
One way to ensure viable energy efficiency is to leverage the internet of things, which “provides opportunities to help continually optimize and upgrade the equipment in your facilities, and this will likely translate into helping to lower energy costs,” Patenaude says.
He equates investing in an internet of things infrastructure to “buying futures in your system for tomorrow,” saying that it helps enable access to more data points and the ability to identify which assets are experiencing performance issues or consuming excess energy.
“Many operators already have pieces of these infrastructures in place but may not be leveraging them to their full potential,” Patenaude says. “Often, a much more detailed understanding of energy, equipment and system performances is available without significant additional investments.”
He also points out that there is a direct link between energy efficiency and system performance. With refrigeration, for example, a slow refrigeration leak may not only increase energy consumption but also gradually degrade the entire system’s performance, driving up case temperature and causing food to spoil more quickly.
To combat this, he says smart algorithms are on the way that use internet of things infrastructures, new sensors, cloud computing and “ever-expanding” databases of system information to analyze patterns in refrigeration performance to provide retailers with “access to actionable information to help them improve energy efficiency, increase system reliability and manage their retail enterprises.”
Lovely Lighting and Color
Lighting can have major effects on environment and a store’s footprint. That is why Tom Henken, VP and director of design for Tampa, Fla.-based design firm api(+), recommends grocers looking to revamp a store start with lighting, because a “well-designed high-color rendering (CRI) lighting package enhances the perception of the environment and the quality of products on display,” while LED lighting makes “a sizable difference in operating costs including energy consumption, heat gain and long-term maintenance costs.”
To complement these lighting upgrades, Henken suggests retailers place a strategic color scheme throughout the store, which he says can “completely refresh a store with little cost.” Along with a color scheme, a targeted graphic communications package can also be integral to brand positioning, he says: “Color, shade and value can direct the eye to important areas of the store, fixtures or products within those areas, in turn increasing sales of high profit items.”
The Nuts and Bolts of ESLs
Electronic shelf labels (ESLs) are creeping into the mainstream, and Andrew Dark, CEO of Atlanta-based ESL provider Displaydata, says one of the most important things for a retailer to consider when investing in this equipment is the balance of the total cost of ownership over the lifetime of the solution with its overall quality, which includes considering the number of images a solution can support.
Retailers should also take into account that the film used in ESLs evolves over its lifetime, becoming drier or wetter depending on its operating environment. These changes, says Dark, can influence the performance of the film and require it to be driven differently over time to maintain optimum optics.
“Retailers must ensure that the solution they choose has the capability to automatically deliver updates to each ESL [and detect the correct update for each display based on its location] in the store estate,” he says. Without this capability, image quality will decline until a costly return to the factory is required, he says.
“Grocers shouldn’t sacrifice customer experience when it comes to determining which ESL to install throughout stores,” he says, warning that cheap displays that do not show crisp, differentiated colors “will increasingly frustrate customers as [the displays] age and degrade.
Keeping Up With Kiosks
One of the most important considerations when reviewing and selecting a new kiosk or self-serve automaton equipment is reliability, says Kimberly Carroll,VP of global for at Mason, Ohio-based Apex Supply Chain Technologies.
To ensure a product’s reliability to drive repeat purchases and customer satisfaction, Carroll suggests retailers inquire about the solution’s uptime percentages and evaluate how many hours of downtime will occur on a daily, weekly and monthly basis.
“Look for solutions that have a minimum of four nines uptime: 99.99%. Anything less and you could be risking a positive customer experience,” she says.
Goodbye to Grease-Related Safety Hazards
Hot grease is one of the biggest safety concerns, not to mention disposal headaches, of many retailers. However, new solutions are coming to light to help retailers mitigate the significant risk of hot grease.
Jim English, director of national accounts for Mendota Heights, Minn.-based kitchen automation company Restaurant Technologies, points out that while many safety risks exist in foodservice, “cooking oil overwhelmingly stands apart as a costly and frequent hazard,” with more than 60% of kitchen-related worker’s compensation claims linked to cooking oil.
While this may seem like a problem that is more prevalent in restaurant kitchens, English says it is actually quite the opposite, with grocery kitchens holding a greater risk. “[They] often have a much larger footprint and utilize more than one fryer, creating the need to transport used cooking oil to rendering tanks across the grocery floor and exposing customers to an unsightly and unsafe environment,” he says.
This may sound scary, and it is, but manufacturers are rolling out solutions that automate the grease management process to keep employees out of more steps of the process, such as transporting the oil to storage tanks manually.