The second annual go-round for the retail tech show Groceryshop drew about 3,000 attendees Sept. 15-18 to Las Vegas, where they heard from more than 200 speakers tackling topics ranging from consumer trends to supply-chain disruption, intelligent stores and retail reinventions.
As shopping paradigms and consumer demands evolve—aided by explosive advances in technology, automation and empowered consumers—speakers provided a glimpse into how the industry is grappling with its changing profile.
What follows are 10 takeaways from the Groceryshop stage.
Retail turnarounds aren’t cheap or easy, but if they ring true to your brand they can succeed, Stephanie Lundquist, EVP and president of food and beverage for Target Corp., said in her keynote address. The Minneapolis-based retailer’s $7 billion investment included a much-needed revamping of the mass retailer’s struggling grocery business, including an effort to hire and train grocery specialists to work in the department; a brand-new private label, Good & Gather, expected to become the chain’s biggest-selling food brand; and an overall approach to the department that more authentically reflected the chain’s traditional strengths in “Tarjay” style and positioning.
Previously, Lundquist confessed, Target lacked a “point of view” in food. Today, she says, “our goal in grocery is to be Target.”
Providing e-commerce capabilities and deliveries for more than 300 retailers in every channel of the food trade and partnering with more than 1,000 brands, San Francisco-based Instacart has surfed the digital revolution to an influential role in the grocery business. Is that a good thing?
In a conversation with WGB Executive Editor Jon Springer, Instacart Chief Business Officer Nilam Ganenthiran addressed questions of loyalty and perceived competition for advertising funds that have followed the fast-growing same-day delivery firm; provided an answer on its IPO aspirations (not yet); highlighted new white-label partnerships; and reflected upon the transformation of the industry.
“Instacart is a tech and logistics player. There are no games with us as far as becoming a retailer, or buying some products or not others,” he insisted. “We exist to be a partner of brick-and-mortar retailers, and that is our singular premise.”
Tom Ward, SVP of digital operations for Walmart, discussed how the big retailer was using technology—and data gathered from its own e-commerce experience—to expand its online shopping capabilities and efficiency while also improving service.
The Bentonville, Ark.-based company gets its shoppers to participate in its efficiency efforts by showing them the times when stores are least likely to be congested for pickup. And as Walmart gathers data from past shopping experiences, it is learning to automatically make substitutions for out-of-stock items based on those most likely to be accepted by the shopper, over similar situations. This keeps its pickers on task and shoppers happy, Ward said.
Ward also revealed that Walmart has expanded pickup at stores faster that it has added picking in-store. “We pick a hub and sweat this store hard," he said. That practice could realize additional efficiencies as Walmart puts robotic “middle mile” delivery between stores.
Narayan Iyengar, SVP of digital for Boise, Idaho-based Albertsons Cos., struck one of the key themes in the show when tackling a question over which e-commerce fulfillment technology he felt would ultimately win at supermarkets.
“Who’s going to win at the end? It’s going to be, ‘Yes, and ...,’” Iyengar said in a conversation with James McCann. “I think the answer to almost any question in the grocery industry is going to be, ‘Yes, and ... .’”
“Because the industry is so large and complex, and what works in Manhattan will not work in Wyoming and each will need a different model. There is plenty of opportunity for every model and its up to the retailer to look at what convenience value proposition do you want to have," he said. “What experience proposition do you want to have? How to do want the economics to work? … There will be no single model.”
Farhan Siddiqi said he considered four things before moving from McDonalds Corp., where he helped to effect a digital transformation, to Netherlands-based Ahold Delhaize, where he has been chief digital officer for the past eight months. Those four things are: The challenge had to be interesting; the company had to have vision of being No. 1; the opportunity to make a real difference had to be there; and it had to be fun.
In a keynote address, Siddiqi said he believed grocery e-commerce could reach a “tipping point” in the U.S. the same way other categories have—by first tackling the “pain points” that are in the way. The experience needs to become more intuitive and compelling; advances in same-day fulfillment need to convince customers to accept the notion that fresh goods can be picked for them; and the costs to fulfill need to come down.
John Furner, CEO of Walmart’s Sam’s Club division, says the warehouse club chain is benefitting from improvements in a scan-and-go program that can recognize products not just barcodes. Its shoppers, he added, are “feeling pretty good. They’re starting in the middle and trading up.”
Stu Landesberg of the online personal care and home products retailer Grove Collective, based in San Francisco, received applause from the crowd for his company’s line of packaging- and waste-reducing products, including super-concentrated laundry detergent sold with a proprietary reusable glass container that distributes only the precise amount needed; and a line of paper products made not of trees but from grasses such as bamboo and sugarcane. A virtual storefront needn’t require to sell products packaged in the same way they need to to attract eyeballs in the store—which can be a powerful draw for consumers making purposeful purchasing decisions.
Luke Jensen, CEO of Ocado Solutions, argued for what he called the superior economics and customer-experience advantages of the company’s robotic e-commerce distribution centers, with several now underway in the U.S. in exclusive partnership with The Kroger Co.
“Don’t think of e-commerce as a challenge,” he said. “Don’t think of e-commerce as a tough nut you need to crack. Don’t even think of e-commerce as an exciting sort of growth. Think of e-commerce and digital as a catalyst from which you can transform grocery for the better, from which you can address issues like waste [and] employment. Making it a more exciting and efficient sector, and ultimately providing a better customer experience all around.”
Barnaby Montgomery, founder of Yummy.com, disagrees with the widespread notion that grocery e-commerce is driven by harried consumers who hate making trips to the grocery store. “My position is that the experience at the grocery store is pretty awesome and I don’t need a delivery,” he said. “I’m relatively able-bodied and not homebound. I don’t live in Manhattan. Our customers aren’t in a rush. There is no urgency at home. They’re not hyperventilating waiting for a gallon of milk.”
Instead, it’s a simple question of convenience, which is why the Los Angeles-based business provides eye-opening services, such as 30-minute delivery and 10-minute pickup, because the one-hour and two-hour alternatives offered by competitors aren’t necessarily any faster than the hour a customer might take doing the job themselves.
Montgomery is a bit of an iconoclast in e-commerce. His business dates back to the first dot-com boom: Yummy doesn’t take on venture money, turns a profit and has developed proprietary systems and practices designed to manage deep customer relationships with local shoppers, who he notes, have viable alternatives.
The Groceryshop team for the first time presented original research at the show. Zia Daniell Wigder, co-founder and chief content officer, delivered a wide-ranging talk on the forces of change moving the grocery and consumer products industries, including a consumer-inspired move among companies to redefine the purposes of their corporations in the digital age, from one that primary focused on wins for shareholders and maximized profits. “Instead they should invest in their employees, provide value to consumers, deal ethically with suppliers and support local communities,” she said.
Groceryshop Content VPs Joe Laszlo and Krystina Gustafson presented a number of innovation strategies to consider for the future. Gustafson, for example, urged attendees to consider the possibilities demonstrated by digitally native brands such as Dirty Lemon, which are less concerned with traditional measures of store performance such as traffic and sales per square foot and instead are creating “Instagram-ready” stores in the hopes that customers will spread the word about them on social media. “Essentially they are using their stores as a means to get customers to do their marketing for them," Gustafson said.