On December 5th, Amazon made a revolutionary change in its grocery business—Amazon Go—and on customers’ experience of future grocery shopping. Amazon Go allows customers to self-serve during the whole grocery shopping journey. Only three actions should be taken by the grocery shoppers: (1) scan the Amazon Go’s mobile App code connected with credit card information while entering the store, (2) pick up the grocery products, and (3) leave the store directly without having to wait for the long checkout lines. To battle in the wars of the transformative grocery business, Walmart also launched a new store format, Walmart Pick-Up and Fuel recently, offering free and same-day pick up of online grocery orders as well as fuel services to customers.
With sharp growing types of grocery stores invented, traditional stores are now facing immediate threats of reducing market shares by missing out consumers’ current and potential expectations of their grocery shopping.
Convenience is what customers value now
Observing the progressions of the grocery business, convenience is what customers aim for and what fundamentally changes the industry. For instance, e-commerce and same-day delivery enable customers to place grocery orders without geographical and time constraints. In addition, self-service stores with integrated IoT (Internet of Things) applications, like Amazon Go, allows customers to save time waiting in a long line while still being able to enjoy the in-store shopping. Moreover, the online order-offline pick-up stores, such as Walmart Pick-Up and Fuel, satisfy customers by having them easily check the grocery orders and fuel up their cars at the same time.
Thus, there is no doubt that traditional grocery stores should think about how to keep competitive in the market without providing the incentives of convenience that makes customers’ lives easier.
Data tells you the stories of customers
Retain customer shopping data. What else differentiates innovative grocery business from traditional brick-and-mortar stores? Big data! It is true that traditional stores can still collect data in stores (e.g. what’s shoppers’ purchasing behaviors and which aisle is most popular, etc.) However, you cannot imagine how huge and precise the data could be collected by Amazon when the company is capable of tracing the customers’ navigation on the e-commerce website and available to identify in-store shoppers’ behaviors with cameras, sensors, and microphones that institute the whole Amazon Go experience.
Once the stores can gather a larger and more precise data set about the customers, the stores can own better understandings about their customers. It then gives the store a solid foundation to provide more customized business solutions, such as giving specific coupons to a certain group of customers based on their current and previous purchases.
Anyone could be your competitors
The emerging and disruptive innovative business models are increasing which translate into a message: grocery stores will likely to face more and more non-traditional competitors. For instance, meal kit delivery services (e.g. Blue Apron, Plated) attract customers to subscribe and receive organized groceries for an easier cooking. Consumer packaged goods (CPG) companies also plan to take the initiative of its e-commerce business. Take Mondelez as an example. The company used to sell its products through physical retailers and online retailers like Amazon. However, to sell a unique holiday version of Oreo snacks, Mondelez is going to handle the whole e-commerce and delivery logistics by itself.
It’s promising to see how grocery shopping experience innovates to positively improve grocery business’ profits. However, before making a revolutionary step forward, consider which inventive strategy will best fit your business based on your resource constraints and customers’ needs.
Pathover helps automate all the manual processes to save time and cost so that any supermarket in the nation can offer its own online grocery shopping and free delivery to its consumers from its own website. Stores maintain their strong store brand while being able to use similar technologies as what Amazon or Walmart have built.