Grocers lay the groundwork for the future of food retail
The explosion of online shopping is set to be one of the enduring impacts of Covid-19. But not all shoppers are moving online, and individual shoppers will not always make purchases in the same way. So food retailers need to make sure they offer an integrated shopping experience that allows customers to shop however they want, wherever they want.
Forty-four percent of people are now more likely to buy their groceries online than they were before Covid-19, according to an ING survey of more than 4,000 consumers in Asia-Pacific, Europe and North America.
“Retailers will need to respond,” says Ruurd Streng, ING’s Director of Transaction Services Sales. “There were many consumers who were reluctant to buy their groceries online before Covid-19, but they are now comfortable with it and will continue to shop this way. The retailers that are going to do well will therefore be the ones that have a robust digital strategy.”
It is not easy to create infrastructure that can serve the full breadth of customer experiences, including accommodating the preferences of shoppers in different markets. Without a one-size-fits-all solution, retailers have to excel across the entire omnichannel offer.
That means they have to keep innovating. For example, the Amazon Go service is setting a new standard for autonomous stores. Thanks to computer vision and machine learning, shoppers’ purchases are scanned automatically as they are taken off the shelf, so customers can just walk out of the store when they finish; their Amazon accounts are then charged accordingly.
In a similar digital store concept, that was trialled in the Netherlands by supermarket chain Albert Heijn, a subsidiary of Ahold Delhaize, in partnership with ING, customers were able to check into the unmanned store by scanning their bank card instead of using an app.
For online stores, however, a user-friendly website is not going to be enough, warns Farhan Siddiqi, Chief Digital Officer at Ahold Delhaize.
“It has to be more than just launching basic e-commerce,” he says. “We have to make shopping more convenient and personalised at all emerging customer engagement points, and also unlock new value for our customers by using these new channels and data insights.”
Siddiqi believes that as retailers make better use of customer data, other services will emerge. “We could take hyper-personal and hyper-local shopping to a different level for millions of customers,” he says. “For example, based on your family profile, we could create a subscription model that automatically delivers fresh ingredients or meals that suit the dietary needs of various family members. This could enable personalised nutrition.”
“There were many consumers who were reluctant to buy their groceries online before Covid-19, but they have now become comfortable with it and will continue to shop this way.”
Smooth payments operator
For innovation to succeed, retailers should focus on service at every stage of the customer journey – removing friction however shoppers choose to purchase.
Payments will be an important battleground. ING’s research shows that 74% of shoppers have increased their use of cashless payment methods as a result of Covid-19. Many will be reluctant to go back to their old ways of paying, particularly as they embrace new types of shopping.
And innovations bring challenges of their own. For instance, 43% of shoppers say they have become more concerned about data privacy since increasing their use of cashless transactions.
Albert Heijn and ING have launched a smartphone-based payment service for home deliveries, which allows customers to pay with their bank app by scanning a QR code. They have also announced a tokenised payments pilot that gives consumers the option to replace sensitive data such as bank details with random numbers – tokens – to improve security.
Covid-19 has accelerated trends that retailers were already grappling with. But they need to put in the groundwork behind the scenes before going fully omnichannel: can they confidently cater to new experiences and improve on basic pain points such as payments and data privacy? If they can, the future looks bright.