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Groceryshop Day 1: Top Takeaways

09.20.2022 | Mike Troy
 

Las Vegas became the center of the grocery universe on Monday, Sept. 19 when more than 4,000 attendees gathered for Groceryshop 2022. The content-rich, technology-oriented event features 200 speakers and this year is occurring against a backdrop of increasing inflation, lingering supply chain issues, dynamic shopper behavior and economic uncertainty.

Taking the stage on day one of the three-day event were CEOs and senior executives from Whole Foods Market, Albertsons, Sam’s Club, Ahold Delhaize, 7-Eleven, Kellogg, PepsiCo and Unilever, among others. They discussed industry challenges and company specific initiatives, highlights of key retail speakers included:

Whole Foods Market: In his first public appearance since replacing John Mackey as CEO of Whole Foods Market on Sept. 1, Jason Buechel played it pretty safe. During an opening keynote session titled, “People and Purpose: What’s Next for Whole Foods Market,” Buechel spoke in generalities about an opportunity to elevate product sourcing standards and focus more on the company’s core values and higher purpose. However, he also said the operator of 534 stores would be “even more store-centric as we go forward,” and that he was “excited about bringing back the theater of retail.”

Regarding the relationship with parent company Amazon, he said “we are definitely in constant conversations,” and co-creating. Whole Foods has Amazon’s cashierless Just Walk Out technology in two locations, but Buechel said, “I am really excited about the Dash Cart,” a smart cart that uses a combination of computer vision algorithms and sensor fusion to help identify items placed in the cart, which enables customers to skip the traditional checkout process.

Albertsons: Speaking on the theme of unifying the online and offline shopping experience, was Jennifer Saenz, Chief Merchandising Officer with the Albertsons Companies: “We start with an obsession for our customers, and we have an awesome team that obsesses about insights all the time.” The $71.9 billion operator of nearly 2,300 stores focuses on the shoppers’ experience of inspiration and ease across its physical and digital footprint. “We think about our customers’ entire lives and new ways to interact,” Saenz said.

Saenz showed a video of two shoppers motivated by ease and inspiration and all the physical digital touchpoints with which they can interact. One of the highlights of the video was the Albertsons app and a voice assistant named AVA which is in development.

“Creating a seamless experience requires a lot of work internally and tremendous communication,” Saenz said. “We are constantly getting better at experiences. We need to make sure the experiences are as seamless as the video would depict.”

Sam’s Club: During a session titled, “Digital Strategies Driving Growth,” Tim Simmons, SVP & Chief Product Officer, announced that Sam’s Club would begin construction in early 2023 of a design studio at its Bentonville, Ark., campus. The purpose is to have a dedicated space for innovating, creating, and collaborating, according to Simmons.

The space will complement an initiative called Network 32 which Simmons said is focused on innovation five years out, citing the metaverse and biometrics as examples. “Our organization today has an insatiable demand for technology,” Simmons said.

The philosophy at Sam’s Club is to accelerate innovation by embracing the minimum viable product approach. Simmons referenced a quote from Linkedin founder Reid Hoffman that says, “If you are not embarrassed by the first version of your product, you’ve launched too late.”

Ahold Delhaize: The topic of “Unlocking E-commerce Profitability” was appropriate for Natalie Knight, CFO of Ahold Delhaize. She assumed her current role in March 2020 as the COVID-19 pandemic began and grocery e-commerce adoption accelerated. To improve profitability, Knight said Ahold Delhaize is focused on driving more leverage, optimizing operations, creating an enhanced customer value proposition and growing complementary revenue streams.

“We are making significant investments in supply chain automation,” Knight said.

Doing so is expected to help the company preserve the higher profitability of click and collect while delivery grows and delivery speeds become faster.

Knight also spoke of complementary revenue and retail media in particular. By 2023, she said the company will have the first integrated online and offline platform and that will be a big driver of e-commerce profitability.

7-Eleven: Who better than the company that invented convenience to headline a session about reinventing convenience? “The customer notion of what convenience means is changing almost daily,” said Raghu Mahadevan, Chief Digital Officer at 7-Eleven. “People value their time a lot more now. We continue to push ourselves on what the customer experience of future is.”

That mindset led the company to launch the 7NOW delivery service in 2017 which now delivers roughly 3,000 products in 30 minutes or less. Mahadevan led the rollout which he described as delivering convenience at scale. Looking ahead, he said further enhancements to the delivery service will include drone delivery.

Because the delivery speed is so quick, Mahadevan said 7-Eleven’s iconic Slurpee product is among the top five products for 7NOW.

Parting Shot and Perspective: A unique combination of factors make this the most unusual of times for those assembled at Groceryshop. For context, the event was launched in 2018 as the industry’s transformation and digital disruption was gathering momentum. Then the onset of the pandemic accelerated disruption and gave rise to an operating environment filled with highly dynamic demand. The situation was compounded in March of this year when food-at-home inflation hit 10%. Each month since it has increased steadily, and the week prior to Groceryshop, it was announced that food-at-home inflation hit a 43-year high of 13.5% in August.

It was the largest 12-month increase since March 1979, a date notable because of how different the grocery and technology landscape looked at the time. For example, in 1979, Aldi was only a few years removed from opening its first location. Today it has more than 2,200 stores. There were fewer than 500 Dollar General stores, but by year end there will be close to 19,000. Point-of-sale scanning was just beginning to roll out in the late 70s. The first Whole Foods Market opened in 1980 and a few years later the first Costco and Sam’s Club locations opened. Walmart wouldn’t open its first supercenter until 1988.

Today these companies are among the largest, most impactful operators in grocery, with hundreds of billions in annual sales. Likewise technology has, and will continue to, dramatically affect the retail industry. It’s why an event like Groceryshop exists and continues to gather momentum as the destination for innovation.

(PS: If you are at Groceryshop stop by Booth 411 to meet the SymphonyAI Retail CPG team and learn more about how AI is transforming grocery. Or, reach out today to connect with a solutions expert.)

 

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