How soon before digital technologies reinvent food shopping?

Discussion
Source: Accenture Consulting from Coop Italia video still
Jan 25, 2017
Tom Ryan

Hailing it as the “Supermarket of the Future,” Coop Italia, Italy’s largest grocery chain, has opened a store that delivers heaps of information to consumers via smart shelves, interactive food display tables and other digital screens via an IoT, in-the-cloud solution.

Based on designs by MIT professor Carlo Ratti, a conceptual version of the store debuted during Milan’s Expo Milano 2015. Accenture and Avanade – a joint venture between Avande and Microsoft – helped complete the supermarket’s information architecture and create a modular, flexible, cloud-based system stores to support the design.

The concept features:

  • Interactive tables: Products are exhibited in the supermarket on large interactive tables where a movement of the hand triggers information to be shown about the product on monitors above, including origins, nutritional facts, the presence of allergens, waste disposal instructions, correlated products (i.e., wine pairings) and promotions.
  • Vertical shelving: With a touch-screen application, customers navigate through categories besides shelves of product, filtering and searching for most suitable products, viewing detailed product information and discovering promotions.
  • Real Time Data Visualization: A large real-time data visualization screen shows content including Coop’s brand values, special daily offerings, cooking suggestions, social media information including posts on Coop’s Facebook account, top selling products and promotions for each category.

The screen experience is complemented by a mobile app that helps customers navigate the store and also access product information and identify products compatible to their lifestyle needs.

“The outcome was a more natural experience for the shopper,” said John Konczal, director, industry marketing, Avanade, in a Microsoft blog. “Digital tech changed the experience, but the customer didn’t have to do much differently — all they had to do was wave their hand.”

In a YouTube video, Mr. Konczal added that that gaining information on what customers are looking at in real time can be used for merchandising insights as well as in-store gamification efforts.

DISCUSSION QUESTIONS: Do you still see a future of in-store digital screens even with the proliferation of smartphone screens? How could they complement the in-store mobile experience, particularly in food shopping?

Braintrust
"I'm always wary of any 'of the future' predictions, but the long-term trend will be more useful interactivity (beyond mobile) in all of retail."
"What Coop Italia exhibited in 2015 and built in 2016 contains much of what retail shoppers want for their personal in-store experience."
"I love the picture here but this stuff is for very high-end markets that have excellent margins and great bottom lines..."

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21 Comments on "How soon before digital technologies reinvent food shopping?"

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Shep Hyken
BrainTrust

There is a good number of grocery store consumers that like information about what they are buying. With the trend to be healthier, what better way to display it than on a screen — either in-store or on a mobile device? So the question then becomes, from the retailer’s perspective, “Which technology should I invest in? A mobile app or in-store technology?” A retailer could get more data from a customer using mobile. This could help create a better customized experience if the data is used properly. I’m excited about how retailers, especially in the food industry, are going to use technology to give customers good information so they can make better choices as well as have a better experience.

Sterling Hawkins
BrainTrust

Most of us agree that technology is fundamental to retail success in the future, it’s only through understanding consumers and piloting new innovations that retailers will understand what works for them. While mobile technology may be the best investment in one chain, in-store signage could be the route for another, and of course there’re locations where both could be necessary. Finding, understanding and trying new technologies is fast becoming a required discipline for retailers, wholesalers, and brand manufacturers. Especially since retail innovation is no longer just being driven by the industry; Silicon Valley and consumer adoption of new technologies are both in the game as well.

Max Goldberg
BrainTrust

Consumers use more screens while shopping, but they are personal screens, not in-store. I question how useful Coop’s screens will be to consumers when they already have most of the information in the mobile devices. With consumers wanting to get in and get out of grocery stores, will screens that slow down the shopping experience be welcome? I would put more emphasis on supporting existing mobile devices than bringing screens into stores.

Gianluca Gravina
Guest

The idea behind the original decision was that the in-store journey could be easier “hands free” than with mobile devices, at least nowadays. In the future, everyone agrees on how important it will be, but a first step in making digital and physical worlds collide has been made. How long the journey will take to bring us into an immersive, mobile driven / AR / VR experience is yet to be discovered; furthermore we have to see if that experience is going to happen “in-store” or “at home” … that’s the real question. By the way, very good point.

Ken Lonyai
BrainTrust

I’m always wary of any “of the future” predictions, but the long-term trend will be more useful interactivity (beyond mobile) in all of retail.

Of course, these types of digital/interactive retail installations are exactly what I develop, so I know their potential benefits. However, at this juncture, I see very few supermarkets (other categories too) that can possibly entertain such a massive rollout/investment. We have the technology, but a store like Coop is a dream more than a destination. That said, for certain brands and certain categories, certain specific in-store product displays — intelligent, engaging displays — are coming to the fore. In fact, when the discussions we have at RetailWire turn to statements like “retailers need to create experiences to survive,” this is one aspect of experience that m-/e-commerce cannot replicate, that consumers enjoy engaging with and that can indeed boost traffic/sales for physical retailers.

Mark Ryski
BrainTrust

While I do believe that food retailers could benefit from digital screen technology, I question whether the ROI could support the investment. It’s well understood that food retailers work with extremely tight margins and the additional capital cost of implementing (and maintaining) an in-store digital program like the one described in the article would be prohibitive for many retailers. Furthermore, given that information and promotional content can be provided to shoppers via mobile app, the case for more screens and technology becomes even harder.

Dr. Stephen Needel
BrainTrust

What would such a setup do to the cost of the food? I don’t see the tech advantage outweighing the cost.

Anne Howe
BrainTrust

What I like about this solution is the retailer’s commitment to interact with the shoppers and learn more about what they like and respond to. In most cases, retailers assume the shopper with a smartphone will “create” their own experiences in the store, but the reality is most shoppers don’t have or don’t take time to do so. The mission gets in the way of exploration.

Offering product information, pairings and promotions to the shopper with just a “hand wave” makes the enhanced experience really easy and productive for the busy shopper.

Smart tech put to good use with shoppers at the heart of the effort.

Ian Percy
BrainTrust

The main contribution this interactive technology could make pertaining to our food selection is in the promise of “including origins, nutritional facts, the presence of allergens … ” But that does not go nearly far enough. In the average American human body at least 29 pesticides are commonly measured. Where does that contamination come from? Mostly the foods we eat.

Many will have seen the Inc. article warning us about strawberries we consume with such delight. The USDA warns that 13 pesticides are found in most strawberries. A friend with a doctorate in plant pathology tells me that strawberry fields are sprayed with fungicides and/or pesticides “every other day!”

Seems to me that this “gamification” of our food selection is a very serious “game” indeed.

Lyle Bunn (Ph.D. Hon)
BrainTrust

I’m looking for brands to be the inspiration behind grocer innovation, where category promotion and point-of-purchase merchandising influences the consumer with information and supports the brand/retail partnership with increased basket size, price posting and shelf stocking efficiencies. Digital screens attract attention and speak to the vicinity audience with no consumer effort required other than to notice the display (which moving content compels them to do). Dynamic messaging screens drive mobile engagement and provide data on consumer shopping behaviors that cannot otherwise be easily obtained. North American grocery has been slow to apply customer experience media because brands have not engaged. As the battles for food spending heat up, grocery will need to take its in-store game to a new level.

Joan Treistman
BrainTrust

I found the concept so exciting I wanted to know how well it’s doing. Turns out the one store was opened on Dec 15, 2016, just about a month ago. So it’s too soon to measure success in dollars.

I believe that the digitization of the supermarket can make a positive difference for the shopper experience and retailer’s revenue if that experience is fast and easy. Shoppers still want to get in and out in the least amount of time possible. However, there is an interest in upping the quality of food purchases. So the screens can support that objective.

I’m less optimistic about the alignment of the in-store mobile activity because of what we’ve talked about before in these posts, i.e., the reluctance on the part of consumers to use their smartphones in-store for in-store shopping.

But what Coop Italia exhibited in 2015 and built in 2016 contains much of what retail shoppers want for their personal in-store experience. I hope we track its progress.

Susan O'Neal
BrainTrust
4 months 29 days ago

I’m curious, with an open mind, about the actual impact of these technologies on trip frequency and sales. That said, I believe the spot where retail technology really needs to begin is at the point of purchase intent — whether that intent is focused on a specific product or a trip that is inclusive of many products, it’s exactly the point at which the need arises for the consumer for a solution. The challenge is 1.) being there (most digital grocery platforms have very low penetration and engagement) and 2.) knowing how to be most helpful to consumers in solving for their needs.

Richard J. George, Ph.D.
BrainTrust

I agree with the need for relevant information at the point of purchase. I simply question the technology, namely the return of in-store screens. This appears to be a throwback to a system used years ago by Walmart, Kroger, Tesco (UK) and others. In my research on the topic of in-store communications, the biggest takeaway I learned was BYOS, Bring Your Own Screen. Any digital enhancements need to place the customer needs before technology.

In addition, in a number of studies when consumers were asked to rank which in-store shopping features they would most like to see in the near future, consumers resoundingly indicated an interest in immersing mobile into the experience.

Their three most requested features, listed in order of popularity, were:

  1. Receiving personalized discounts, product recommendations and rewards on their phones based on location in a store;
  2. Ability to locate items and check product availability in-store via their mobile device;
  3. Push notifications to their mobile phone with store-specific offers when near or entering a store.

Consumers have spoken!

Ken Lonyai
BrainTrust

Richard — while I totally agree that delivering consumer wants is paramount, many of the “studies” that I’ve seen are driven by those with mobile interests at stake. It comes down to what questions are asked and in what context. Additionally, most consumers only can envision what’s familiar and would not be capable of imaging a truly interactive retail environment. If so, and if there was A/B testing of mobile vs. mobile in a more immersive environment, I think their preferences would be for the latter. By the way — the three points you listed are so basic that they are the price of entry these days (even though many retailers fail at it).

Gianluca Gravina
Guest

I totally agree on the importance of mobile devices, but the three popular scenarios proposed by customers are going in a different direction, in my opinion. First and third are just going to try to obtain discounts despite the channel used; mobile for sure is the most commonly used. The second one sounds to me like people that do not like the store and are really in hurry. The Coop Italia store tries to address, at first, the hardest one, screens need to be placed in a beautiful place with quality products and with appealing architecture. Otherwise they are useless.

Tony Orlando
BrainTrust
I love the picture here but this stuff is for very high-end markets that have excellent margins and great bottom lines, which eliminates 80 percent of the supermarkets, at least for now, unless this technology goes way down in price. I speak for the independents who are trying their very best to engage the consumer with quality foods at a very good price, and this would be the last thing they would purchase as the ROI, as mentioned above, would be difficult to justify. NYC, San Francisco, Miami and other major cities where the incomes are very high could have some interest in this and the demand for this concept would be welcomed. But in downtown rural America, not likely. Pushing the envelope in technology is great, but there has to be enough interest in the final product to pay for the R&D, which is why I scratch my head everyday looking at the flavor of the month’s newest tech gadget or app that purports to solve all of your problems. There is an old saying my college marketing professor once said to us … “You can afford anything you want, but not everything you want.” This always stuck with… Read more »
Thomas Becker
Guest
4 months 29 days ago

The technology is available. The only thing holding us back from transforming is … ourselves.

Ralph Jacobson
BrainTrust

As we have seen over the decades, in-store technology takes a lot of time for ubiquitous adoption across markets. Some great innovators will always lead the pack. I see even more opportunity for retailers — large and even very small — to leverage technologies that are shopper-driven, and perhaps not so visible in the store itself. Things like real-time personalization apps on the shoppers’ phones are a great way for every retailer to take advantage of true artificial intelligence/machine learning/cognitive capabilities today, without having to install new fixtures or equipment across stores.

Min-Jee Hwang
BrainTrust

Incorporating in-store digital screens for the purpose of providing more information to the consumer definitely adds to the transparency and trust for stores. However, the implementation, as mentioned before by Tony, is expensive and does not necessarily make it easy to justify. It certainly differentiates them from competitors but I don’t see it improving sales enough to justify it. If anything, providing that information via smartphone integration would be a cheaper method of information delivery.

Gordon Grant
Guest
I think that it’s great to see innovation in retail stores. There is so much potential. The screens look great in the videos, but I would question how often they would be used during repeat visits — once the novelty has worn off. Customers need — and are demanding — personalised information in a timely manner when they are in store. That can be personalised to me as an individual (i.e. we’ve identified that you are Gordon Grant and we’ll show you info that we know that you want based upon your buying history or information that we already know about you — maybe warning about products containing nuts) or personalised in the sense that the information being displayed is based upon my circumstances at that moment (i.e. we don’t know who you are but we can see that you have all of the ingredients for a roast dinner in your basket, so why not add a bottle of wine for 25% discount if you purchase it at the same time?) I think that this is good progress on this journey, but I can’t quite see that it’s the right implementation just yet. The days of Amazon Prime X-Ray being… Read more »
Dave Nixon
BrainTrust

If you have the ability to provide a richer data set to make purchasing decisions, especially around product item attributes, retailers should supplement what the shopper brings with them as much as possible. Storage and security concerns on customers’ mobile will put even more barriers in place to leverage their devices, so we need to make that data readily available FOR them and not put the responsibility ON them.

wpDiscuz
Braintrust
"I'm always wary of any 'of the future' predictions, but the long-term trend will be more useful interactivity (beyond mobile) in all of retail."
"What Coop Italia exhibited in 2015 and built in 2016 contains much of what retail shoppers want for their personal in-store experience."
"I love the picture here but this stuff is for very high-end markets that have excellent margins and great bottom lines..."

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