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Groceryshop Day 2: Top Takeaways

09.21.2022 | Mike Troy
 

Data, loyalty, insights, personalization and monetization were recurring themes throughout day two of Groceryshop. Speaker after speaker, whether retailer or CPG, touched on these five interconnected areas and their heightened importance in a grocery world undergoing a technology transformation.

While these themes aren’t new, fulfilling the promise of creating business value is made possible by advances in technology. Several examples were shared in our top takeaways from day one, but Groceryshop’s day two speakers added more details about what’s possible and where the industry is headed.

For example, Walmart US President and CEO John Furner provided a reassuring message about the health of the consumer, something the company is uniquely qualified to do given the breadth of its operations. He indicated that shopper behavior is still very dynamic, and he is often asked about what the new normal is.

“We are still trying to figure it out because the market is changing so much,” Furner said. He added that the company had a great tailgate season and strong back-to-school season and there is a lot of demand in the market. “We are still optimistic that the customer is in a strong position. People are celebrating holidays, seasons are strong. People are still going to be together this fall, still spending and looking for time when they can be together.”

Furner’s optimism extended to inflation, where he said prices in select and unspecified categories are declining or moderating, and that things have balanced out more in the supply chain.

“I feel much better about the availability of product for customers in stores,” Furner said.

Regarding innovation, two points Furner made stood out. First, he talked about the importance of trust among team members and organizational structure as being foundational to innovation. Then he shared an example of supply chain innovation involving drone deliveries.

“Customers want immediacy of fulfillment and hardware is getting better and can deliver heavier packages,” Furner said. “Not only is it a great way to fulfill a customer’s needs, but it is far less energy-intensive than traditional delivery methods. We are expanding to future markets with drones later this year.”

 Innovating with Pizza

Casey’s doesn’t do drone deliveries, but innovation takes other forms at the operator of 2,400 convenience stores throughout the Midwest. Casey’s President and CEO Darren Rebelez described how the company ramped up digital efforts in recent years, beginning with a website relaunch, a mobile app and a loyalty and rewards program as a means to reinvent the guest experience.

“Our prepared foods platform is the backbone of our e-commerce business. We use a lot of technology behind the scenes to upsell,” Rebelez said.

Casey’s is the nation’s fifth-largest pizza chain, and its mobile app is the primary means of ordering. However, the company also makes available 600 grocery items in its online assortment. It is the popularity of pizza that has helped the loyalty program grow to 5.5 million members, who interact with the retailer 15% more often and spend 12% more on average than other customers.

The halo of brand quality associated with Casey’s pizza also gave the company instant credibility when it launched its own brand products. With a current penetration rate of 5.5%, Rebelez said he is confident the company will surpass its goal of a 10% penetration rate. Other growth initiatives include doubling down on prepared foods while accelerating store growth and findings more ways to remove friction.

“Rule number one for the convenience industry is thou shall not have an inconvenient convenience store,” Rebelez said.

 Kroger’s Open Attitude

The business case for personalization is clear at Kroger where Sanjiv Karani, head of the retailer’s platform products and ecosystems innovation, said Kroger has a 98% retention rate among customers who experience personalization. However, where there is a disconnect is with personalization of the physical experience.

Kroger is focused on solving that challenge with a feature in its app called “store mode.” Karani described it as Google Maps for a customer’s phone because it can help optimize their shopping journey while highlighting promotions and targeting real-time offers based on proximity.

Store mode is in 100 of Kroger’s stores currently but is rolling out this quarter, according to Karani.

“We believe in the concept of ecosystem innovation at Kroger,” Karani said, describing the company’s use of open APIs (application programming interfaces). He said Kroger has 200 active ecosystem partners tapping into APIs, which he described as a way to build satellites of innovation around your platform.

 Weis Wins with Media

The growth of retailer loyalty programs and the importance of first-party data was highlighted by Ron Bonacci, vice president of marketing with Weis Markets. During a session titled “Using Customer Data to Create Engaging Grocery Experiences,” Bonacci described how the trend of cookies going away (Google will stop the use of third-party cookies in Chrome by the end of 2024) elevates the importance of retailer’s loyalty data.

At Weis, 93% of the company’s annual sales of $4.2 billion are made by loyalty cardholders, which creates opportunities to segment data to target specific behaviors and accurately measure results, according to Bonacci.

“Retailers are at the forefront of this new age of digital,” Bonacci said, describing AI personalization as the most cost effective dollar a company can spend.

DoorDash Doubles Down

While Walmart US CEO John Furner mentioned volatile consumer demand, DoorDash CEO Tony Xu highlighted how despite fluctuations, online order volume remains elevated from pre-pandemic levels.

“What we’ve seen is even though customers are going back in store , they are still ordering at home.

“There are more than twice the number of customers who order on DoorDash than when I was here a year ago,” Xu said.

He also described how grocery is a category that is still very early in its online penetration with some very consistent behaviors exhibited. Xu’s perspective is informed by his claim to have more retailers on its platform than any other company, with notable recent additions including Sprouts Farmers Market, Giant Eagle and Raley’s.

Xu said there are three million Dashers (the company’s name for those who make deliveries) on the platform serving 25 million customers a month. Because DoorDash has the combination of frequency of delivery and serves a density of stores, it was able to introduce Double Dash a year ago. The service enhancement lets customers add an item from an additional merchant to an order at no extra charge.

Parting Shot and Perspective: Groceryshop is an event focused on the food industry, yet there is limited discussion of food or food trends. Aside from the occasional example of an effective promotion involving a brand, if it weren’t for the ubiquitous Groceryshop signs throughout the venue, it would be difficult to know the event was related to grocery.

To be fair, Groceryshop is a technology show and exhibitors are providers of technology solutions. Retailers can attend other events related to specific food categories. Nevertheless, for an event that bills itself as being at the center of the grocery universe, it would be interesting to hear the organizer’s perspective on the food industry, shoppers dynamics and key trends. This seems to be a missing element of a show that gets so many other things right in terms of providing rich content and a great attendee experience.

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

 

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