Bright lights, big challenges: Can grocery stores make it in America’s cities?

Grocery Dive – The big boxes that are so successful in the suburbs face a host of issues when they try to adapt to urban living.

As consumers — particularly affluent millennials — have moved into America’s urban centers over the past several years, grocers have eagerly followed suit. But while cities offer bright lights and big opportunities, the reality is that breaking into the market is a huge challenge. This is especially true for grocers used to operating in suburbs and rural areas. And yet, despite the many past failures, retailers like Target and Wal-Mart remain determined to make it in America’s cities.

“With suburbs and small towns already saturated with grocery stores, urban areas are virtually untapped by the big chains,” Ken Morris, principal at BRP (retail consulting firm), told Food Dive. “There is a large captive audience that is ripe for the picking.”

Retailers also must optimize their product assortment for customers who make smaller trips and live in smaller spaces. Morris with Boston Retail Partners noted this makes it challenging for stores to achieve the high sales per square foot they need, but that focusing on carefully chosen selections of consumables, prepared foods and other items that appeal to local customers — “micro assortments,” he calls them — creates the best chance for success. “Localizing the product mix based on the customer base is critical to turn inventory quickly,” he said.

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Are Smart Shelves The Tech Supermarkets Need?

Retail TouchPoints – Supermarket retailers have long been frustrated by the challenge of providing relevant information at a shopper’s point of decision — in the store aisle. Static signage and product labels share limited data, and they lack the personalization capabilities that have become so important in today’s shopper journey.

But smart shelf solutions appear to be a remedy for these woes — at least on the surface. The technology uses a combination of sensors and digital displays to provide detailed product information, marketing and cross-selling suggestions, and they also can give retailers invaluable insights into customer preferences and shopping patterns.

Smart shelves got two high-profile boosts recently: Hannaford announced a pilot of smart shelf technology at a redesigned concept store, and Kroger, which already is using its own version of the technology, revealed that it was partnering with Microsoft for pilots in two “connected” stores.

The RetailWire BrainTrust recently debated whether smart shelves offer real benefits to shoppers who are already carrying their own information devices, a.k.a. smartphones. They also discussed what retailers can do to make their smart shelves produce a measurable ROI while also maximizing their user-friendliness. Excerpts of the discussion follow:

Ken Morris, Principal, BRP, Retail Consulting Firm
For products that are complex or those that commonly call for customers to read their package labels, the smart shelf/touchscreen technology will be helpful. A good example is for medicine, which notoriously has print on packages that is too small to read. This technology won’t be needed for basic items like produce, meats, dairy and other staples like flour, sugar, etc., as consumers don’t need more details on these products. The pricing opportunity may be the biggest benefit to both customers and retailers, as individualized pricing and promotions will drive both acceptance and sales. The key will to be to focus the technology on the most relevant products and make sure it is easy and works flawlessly. Test, test and test.

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Simple, speedy checkout the future of grocery

FierceRetail – Today’s grocery shopper has high demands, driven largely by expectations set by an Amazon-dominated marketplace. Consumers are looking for great service, lower prices, higher quality, personalized rewards and more checkout options. In addition, they want these services in a timely manner—no lines in-store and no lengthy fields to fill out in digital. A simple, speedy checkout.

According to a new white paper from Boston Retail Partners Consulting (BRP), the threats facing the traditional grocery industry are real. Keeping up with the changes is largely hinged upon technology-driven software solutions, and at the center of this upgrade is the need for deploying next-generation POS platforms.

“Grocery retailers are keenly aware that without the IT and operational investments necessary to support these critical, customer-demanded changes, the threats represented by so many direct and indirect competitors, such as Amazon, could be devastating,” said Scott Langdoc, vice president and practice lead at BRP. “No matter how extensive and complex the technical, operational or competitive changes to the grocery customer experience, nothing will ever be as important to the intersection of shopper satisfaction and profitable operation as speed of checkout.”

Despite customer demands, Langdoc says that less than half of U.S. regional and national grocery chains are fully enabled with advanced POS platforms capable of supporting the breadth of changing customer expectations—especially when it comes supporting the levels of personalization, engagement and flexibility that customers demand now.

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