Back in Vegas! This time, we learned more about the transformation of the grocery category during the pandemic, and, more importantly, what we will see happen in the coming years and decades. What does it look like to truly win the omnichannel grocery game? Like any game, of course, you have to know the rules, know the players, and be able to anticipate future moves. For us, that is what Groceryshop 2021 in Las Vegas was all about: Getting a crystal-clear picture of the who, the what and the how of the online grocery landscape.
Below are some of the key takeaways we gleaned from the various educational sessions, as well as our direct conversations with brand managers, retail sales executives, transformational growth leaders and heads of ecommerce at both brands and retail marketplaces.
Major grocers are (gladly) taking the lead when it comes to omnichannel
With the rapid transition to online shopping, it was the brick-and-mortar grocers that had the most to lose – but who also were perfectly positioned to meet their existing customers’ needs in a brand new way.
On opening night, we heard from Rodney McMullen, the Chairman & CEO of The Kroger Co. as well as Chris Rupp, EVP & Chief Customer & Digital Officer of Albertsons, in two separate interviews. Both, however, remarked how a primary objective during the pandemic was to ensure convenience.
Rupp announced that Albertsons would be the first grocery participant in the newly launched “DoubleDash” offering from online delivery partner DoorDash, allowing online shoppers to combine their Albertsons purchase with a separate order from a restaurant or other participating merchant in a single delivery.
“Partnerships with fast delivery partners allow(ed) our customers not to compromise on anything.”
—Rodney McCullen, Chairman & CEO, The Kroger Co.
McCullen also said that while some digital shopping has decreased, it was not by much, as the Delta surge sent many shoppers who had been returning into stores to flip back online. The most important metric he noted was retention of existing customers in their ecosystem – for all those shopping online to be able to shop in-store, and then when they felt like being digital again, to seamlessly return to that environment.
The very next day, we heard from Rick Gomez, EVP, Chief Food & Beverage Officer at Target about how the Minneapolis-based retailer is meeting the needs of its existing store and online guests, as well as Wouter Kolk, CEO, Europe & Indonesia of Ahold Delhaize, about the European retailer’s omnichannel transformation.
Analyst perspectives on the grocery landscape are bullish
Just as McCullen observed that digital shopping for grocery items has not decreased that much, analysts presented data that verified that trend. Online grocery shopping spiked 54% in 2020, will cross over $100 billion in sales in the USA in 2021, and will continue to grow 18% per year through 2024. From Coresight to CB Insights to Bain & Company, analysts noted that incumbents have a distinct advantage:
Having said this, by 2024, roughly 86% of grocery sales will still be in physical stores. Brick and mortar is not dead, but it will become much more efficient, including taking a more leading role in delivery fulfillment, according to TD Insights.
The hottest technologies at Groceryshop 2021
A common theme seen throughout the conference was the need to better predict consumer behavior. Brands and retailers spent the last year rapidly expanding their fulfillment infrastructure, but now they must adapt it to ever-evolving consumer preferences. Knowing what those might be, though – that’s the challenge.
The most exciting technology, the one most talked about at Groceryshop, both on stage and off, was artificial intelligence. Take a look at the recent investment into Shelf Engine, for instance, by Olympic snowboarder Shaun White, which looks to AI to help eliminate 43 billion pounds of food wasted by grocery stores yearly.
As AI and machine learning have become less expensive and more accessible, brands and grocers are enthusiastic about how it can be used to improve inventory accuracy, as well as studying and optimizing the customer journey and experience. The promise of AI was noted as a major transformational solution to address the challenges of where retail goes next, especially in grocery.
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