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Independent grocers need new consumer engagement technology

February 13, 2014

Another year and another call for independent grocery retailers to improve their relationship with shoppers. At the National Grocers Association Show in Las Vegas this week, attendees heard all about the impending takeover of shopper marketing activities by digital marketing tools and saw dozens of vendors selling solutions to get them to the promised land of optimal customer engagement.

The annual gathering, which was the largest in NGA history with about 3,000 retailers, wholesalers and industry partners in attendance, featured more than 40 sessions covering everything from path-to-purchase analysis to shopper retention programs. Like last year, the key takeaway from the two general sessions was that only by using digital technologies and by deploying social media strategies can independent supermarket retailers expect to differentiate their companies from the competition.

John Phillips, senior vice president, customer supply chain & global go-to-market at PepsiCo, told the audience about a near endless series of technologies available to help the retailer really understand consumers and their path to purchase. He then warned, "Digital technology is really transforming all of our daily lives and there are risks from not acting. Just look at Blockbuster and Kodak, which both had brand new markets to themselves and didn't act."

As an example, Mr. Phillips gave a demonstration of Google glasses, suggesting that retail use cases for the technology included loyalty programs, store guides and instant promotions.

On the exhibit floor, dozens of companies were hawking the very latest shopper engagement technology, covering everything from loyalty to cause marketing. One example was Engage 3, which showed a novel web-based system that builds shopping lists from everyday browsing activities like reading recipes.

FINANCIALS:     [NYSE:PEP] [ ]

Discussion Questions:

What digital technology tactics can independent grocery retailers most effectively deploy today? Which offer the greatest promise for the longer haul?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which of the following digital marketing tactics will independent retailers most effectively implement in the next year?

Comments:

Really, anything that works for larger, regional, national brands can work for smaller grocers, but it's unrealistic to believe that they have sizable enough budgets to implement "technology" in meaningful ways.

Google Glass? Not sure of a justifiable use case there. The most cost effective technologies would be social media integration online and in-store, or bringing in a well vetted loyalty application, possibly Shopkick or similar. A well designed user-centric mobile app would also be good, but again, great apps don't come cheap!

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Mobile in-store such as in store mapping, purchasing and self-checkout exist today, but one area with real promise is in-store, location-based messaging. While the possibility exists for over messaging consumers in-store, grocers/retailers who tailor this to their customers' needs should see benefits because it closes the "last mile" issue of helping consumers make purchase decisions in-store.

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Bill Davis, Director, MB&G Consulting

Although digital technologies are expanding at an unprecedented rate, it is important to bear in mind that the most successful strategy for keeping customers engaged and loyal to a retailer is a warm smile and friendly, knowledgeable service from a fellow humanoid.

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Eric Chester, Keynote Speaker, Author, Reviving Work Ethic, LLC

The first question should be whether any tactic supports the grocery retailer's overall strategy which may vary widely. Urban stores tend to have a younger, tech-savy customer base than suburban or rural areas. Therefore, digital technology needs to be tailored to the demographic.

Another thing to keep in mind is how stores may partner with vendor promotions to help generate greater impact with any in-store promotions. Grocery retailers don't need to solely rely on their own resources to engage customers.

However, regardless of the latest technological novelty, nothing is more effective than a friendly, helpful store associate to help customers find what they are looking for or pointing out specials. The eyes and ears of employees who personally deal with customers are, too often, an overlooked and undervalued source of intel. There is too little value today on personal interactions. Too many companies rely too much on digital data and neglect the more valuable information that may be gathered by simply asking employees what they observe and encounter with customers. Digital technology is only a tool.

'RetailRetell'

The most successful independent grocers, and independent retailers in general, are those who consistently provide an intentional and authentic customer experience.

In many instances, doing so is not dependent on digital technologies, though loyalty and personalized coupon initiatives are important, but on cultivating a company-wide culture of understanding the importance of customer-associate interactions, and supporting sales associates in taking care of the customer across departments.

Independent grocers have significant opportunity to leverage the power of customer interactions done well, especially in the high-touch, full-service departments of deli/prepared foods, meat and seafood, bakery and floral. The risk independent retailers face is relying on technology to drive customer satisfaction and retention, while ignoring person to person interactions.

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Jeff Hall, President, Second To None

The answer to the above question is none of these offer then greatest promise for the long haul. The number one key advantage the independent grocer has is the ability to hire great staff, train them, and build personal relationships with his customer or community. No major can do that as effectively as the independent operator.

Get the people side right first, or all the technology tactics are wasted money and effort.

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Mel Kleiman, President, Humetrics

Consumer insights technologies off some of the highest ROI of any IT investments today. These need not be financially crippling engagements to implement, however. Independent retailers of any format, food or otherwise, should investigate the tools available today to leverage actionable insights to capture true shopper loyalty...not just offer mass, untargeted discounts.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

We need to reduce talk about "technology" as if it is the technology that brings value, and consider how we enhance relationships for shoppers at home, on-the-go, and in-store, where technology can facilitate.

What makes shopping easier, more engaging, more entertaining, or solves some fundamental problem? For some shoppers that might be coupons to save money, for others being rewarded as a big basket shopper, and for others it might simply be finding some new ideas to break the weekly recipe routine while they are in the aisle searching for something new.

An appropriate strategy might be closer to a portfolio approach rather than picking winners and losers. A percentage of shoppers use a retailer's web site, a smaller percentage use a mobile device to access information, some still rely on print, and others utilize the in-store kiosk. A few more will always try something new for the sake of exploring. Gone are the days of singular solutions that offer the "greatest promise for the long haul."

This is a process of continuous exploration, experimentation and engagement. The fact that a retailer is trying to figure it out on behalf of the shopper is relationship building in and of itself. Something the independent is doing far better than regional and national chains!

Frank Beurskens, CEO, ShoptoCook, Inc.

Bluetooth Low Energy (BLE) Beacons aka iBeacons open up a huge opportunity for independent grocers and other smaller retailers. The hardware is inexpensive to deploy, can reach any shopper who uses Bluetooth for hands free calling in the car (which is a lot of us) and is the best platform yet for reaching shoppers in a context relevant and location specific manner.

Retailers deploying BLE should focus first on creating functionality that makes the shopping experience easier and/or more engaging and then think about enabling mobile marketing strategies, especially those tied to an existing loyalty program.

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Martin Mehalchin, Partner, Lenati, LLC

iBeacons and BT beacons could push an appealing message when the shopper walks in the door such as: "We're glad you're here and if you have time please enjoy a coffee on us." This can be from the Apple Passbook, Google Wallet or an mobile app.

"Spend more than $X today and you're getting bonus points" or "as a VIP member cheese is 50 cents less for you."

The beacon technology will blow our minds in months to come!

Burton Langille, Owner, WinCustomerLoyalty.com

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