David Marcotte of Kantar Consulting and Carl Boutet of CloudRaker – Photo: NRF
NRF: Will grocers be ready for 2030’s smart future?
With smart homes, smart stores, smart buildings, smart shoppers and smart employees, the grocery shopping experience of 2030 promises to be — you guessed it — a smart one. And the grocers that win big will be the ones that embrace smart technology. That was the major takeaway from a session at the 2019 NRF Big Show in New York City by David Marcotte, SVP of strategic advisory services at Kantar Consulting, and Carl Boutet, retail strategist at CloudRaker.
Working in conjunction with the Coca-Cola Retailing Research Council, Kantar put together a speculative snapshot of what the grocery world would look like 11 years from now. The future grocery shopper will be what the presenters called an “epicurean” customer — in search of a rich, but simple experience.
Some of the big trends that the report foresees springing up alongside this new customer are:
- Smart homes assisting aging consumers: With an aging population that wants to continue living in their own homes, smart homes will increasingly take care of the person inside, with the house doing the ordering and subscribing rather than the individual.
- Smart buildings with fully-wired insides and artifices: There will be a proliferation of retail buildings created entirely of smart-surfaces, which will communicate with the smartphones of customers as they travel from their smart home to the store and assess their needs as they move through their journey. Floors, walls, ceilings and store fixtures, all made of smart, wired materials, will change in response to the customer. And stores will notify employees to address customers’ needs.
- Robots help, but don’t take over: Robots will reach the point where they will act as an extension of the shopper in the store or in the home — a type of mobile artificial intelligence.
- Smart, tech-savvy employees: Employees will be surrounded by their own bubble of smart-technology, will need to have a higher level of expertise. This will raise concerns for retailers about how to appropriately train and work with employees.
The increase in retail automation and predictive order fulfilment will also, according to the presenters, impact how businesses will be evaluated by Wall Street.
Discussion Questions
DISCUSSION QUESTIONS: Why do you or don’t you think that the 2030 grocery landscape will resemble the one imagined by Kantar Consulting? What are your predictions for how smart technology will influence that state of retailing in 2030?
Poll
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
Tony Orlando
Owner, Tony O's Supermarket and Catering
It stands to reason that grocery will make as much use of technology as possible to satisfy the demographics of the day. There are two factors contributing to this result: groceries are a necessity and grocery shopping – for the most part – is boring. Grocers will be responding to a condition in which “I have to have but I don’t want to or am not able to do it.”
Technology is inseparable from retail in the future and I think the future Kantar created here is spot on. But it’s the less relevant question to begin with. The bigger question is in the title, will grocers be ready? And some will be, not because of their technology, but because of their people. It’s those that can create cultures of innovation — that can pivot, adjust and change through the countless technology trends and emerging tools that will be part of commerce in the future.
The people question is the greatest challenge. Retail culture has largely been “let’s get the least for the least.” In the future, the information ecosystem will be critical, everyone from the top to the sales person on the floor to those responsible to merchandising shelves will have to be comfortable with what technology can offer.
The transition in retail will be slow, as it has been with almost everything. But we will not recognize retail 12 years from now.
If there was is one industry segment that is ripe for disruption, it’s the grocery industry, whose operating model has relatively stayed the same since scanners were introduced in the late 1980s. David Marcotte and Carl Boutet were spot on with their NRF presentation.
It was very encouraging to see that grocery and convenience retail were featured at the NRF with the cashier-less checkout, smart shelves/fixtures/kiosks as well as a reimagined grocery format model. Kroger highlighted this in the Microsoft booth with their Retail-as-a-Service model. However, as we all know implementing technology for technology’s sake is a losing proposition. It will require grocery organizations to drive the culture of change across their stores and empower, train and elevate the role of the grocery associate, especially as the cashier model is eliminated.
While it’s very certain that smart technologies will emerge over the next few years Its very much a corporate cultural change play as compared to a technology upgrade.
Agreed Brandon. Technology in isolation is a non-starter. I’ve gotten in the habit of trying to change my language to reflect that. On the other hand the definition of human I use is a tool builder that shares and rapidly innovates. In other words, technology flows outward to unexpected needs.
I wish I knew how many supermarkets David believes will still be operating in 2030. I also wish I understood how “smart homes” are being defined. For example, was he positing an active IoT integrated into other “smart” functions? If so, that could eliminate a significant part of the reason people go to supermarkets in the first place. Epicureans? My guess is by 2030 society may be more economically polarized and “epicureans” may represent the smallest — although most profitable — part of the market. Can’t argue with the smart homes idea, but I believe its benefits won’t be confined to the elderly. And, if the projected increases in dementia are accurate, the elderly may not be able to stay in their homes — smart or otherwise. The whole smart buildings piece feels more like now than then, just look at trends in modern construction. Finally, about those tech-savvy associates. What makes anyone think that there will be a pool of these workers available to retailers? First, they would have to be well paid. And, second, assuming you could pay them they would have to see retailing as a sustainable and desirable career path. The problem with most folks who think about the future is that they assume it will be some form of linear extension of the past and present. I think retailing will look significantly different in 2030, just not sure it will match the vision presented at NRF, at least as reported.
Ah, good to see you’re still out and about. The condition set (artificially) was that all technology be in current existence with the exceptions of an equivalent of 5G speed of connectivity. You do raise a legit challenge that Smart Homes are for the aging, but that was to push people out of the normal comfort zone that they are in today of essentially point-and-click “smart” as opposed to a whole integrated … note they are now offered via security companies leveraging the investment of existing installs … though not to the level assumed in a decade. Employees, I would refer you to manufacturing for a model of where that is going.
The push for technology is understandable, and if you ask 100 techies about what is the right mix for new your business, you will get 100 different answers, as they all have their own agenda to push, which is fine. I’m actually glad to be in the homestretch of my career, as an owner, because the costs to implement these new technologies, is out of reach for small store owners and delivery is only going to get more expensive, which only the large deep pocket chains can handle. Time marches on, and changes have been happening at warp speed. So if you want to stay in this industry, adding significant tech to your store will be necessary to compete, and the store today will look a bit different than it does now. New cases that have sensors, high-tech lighting, and talking shelf stickers will be commonplace, and I look forward to seeing all of this, as I’m a junkie for anything cool in grocery stores.
Regardless of the perspective, (no offense, David Marcotte, a friend of mine!) I hesitate to take too much stock in any prediction even five years out in this rapidly-accelerating, technology-driven world. If you think back ten years ago, no one imagined the world we have today.
Bottom line, listen to the researchers, see what’s happening around the world and be as agile as you can when an unforeseen trend eventually happens.
Agree, but 2030 is so much cooler than 2023 (Mayan Year of Drought?). To your point there was a limitation made that an invention (flux capacitor?) would not magically appear. Projecting with that type of unknown is entertaining, but not of use.
LOL. Well said, Dave! Hope you’re better than ever!
There is no doubt that grocery, and retail in general, is changing at warp speed – driven by rapid increases in customer expectations and extremely creative technology innovations. In addition, aggressive retailers, like Amazon, are pushing the envelope on technology and what customer expect from the shopping journey.
While some of the technology identified from Kantar will become widely adopted, some of it may not be pervasive 11 years from now. It is expensive and it takes a long time for technologies to become ubiquitous. For example, the Shopping Buddy consumer self-scanning technology was piloted by Stop & Shop Supermarkets 14 years ago and it still hasn’t been adopted across the grocery industry. Thin margins make it difficult for grocers to adopt bleeding-edge technology. A more subtle innovation transformation is a more likely scenario.
I was in IBM on the back-end working on the Shopping Buddy. The intended location system was based on a patent application made by me and Fred Busch. There were a range of reasons it didn’t work but the worst was that it was successful at steering the shopper to promotions and dropping margins. The topic of expense is one that gets tied up with variations of Moore’s and Amdahl’s Law … is there a presumption that all computers will always cost $3,000 regardless of capability due to use spend or will a point be reached that the price collapses?
A smart grocery story will depend on shoppers using a smartphone while shopping. I have read many surveys saying that a growing number of consumers use their smartphones in the store — checking a shopping list, scanning SmartLabels in packages, getting pinged by beacons, looking up nutritional info, etc. In my experience, that is fake news. I am in stores all the time around the country. I never see anybody using a smartphone while shopping. Never. I have even asked several food execs if they see anyone using a smartphone. They sheepishly say, no, and ask me not to report their names.
Not to say it will never happen. I believe it is generational. Maybe by 2030 the smartphone will used routinely in grocery stores. Then again, maybe not.
I agree completely and smart phones are not part of the presumptions, though smart IoT is. Is it a tattoo, ear-bud, or a vibration chip to the cranium? I don’t know, but I do believe as you do that a smart phone not unlike AR is intrusive and does not fit the scenarios.
Great overview of our presentation! Thanks for sharing it.
Two points I would add/clarify:
1) Owning the conduit of grocery to the home is increasingly important as it has the most velocity and will lead to more opportunities. Hence why the largest (AMZN, WM, BABA) are massively investing in this category.
2) The data from the all those “smart connections” are the backbone to the necessary data on which predictive capabilities will be built. That were the recurring revenue streams will be created that bring those retailers to an entirely new level of market valuation (one based on revenue rather than profit).
Smart technology will influence all areas of retail, not just grocery. And, I predict Amazon will be a leader. As a result, a high bar will be set and other grocery retailers will take action to not be left behind. Can’t wait to see what the future brings … cashless stores, robots, pick-up and go, accurate suggestions on what to buy, drone delivery, etc., etc., etc.
The employees one is interesting and as GenZ move into the workplace in the coming years, their expectations around the systems they use to do their job will come into focus.