Today's grocery shopper has high demands, driven largely by expectations set by an Amazon-dominated marketplace. Consumers are looking for great service, lower prices, higher quality, personalized rewards and more checkout options. In addition, they want these services in a timely manner—no lines in-store and no lengthy fields to fill out in digital. A simple, speedy checkout.
According to a new white paper from Boston Retail Partners Consulting (BRP), the threats facing the traditional grocery industry are real. Keeping up with the changes is largely hinged upon technology-driven software solutions, and at the center of this upgrade is the need for deploying next-generation POS platforms.
“Grocery retailers are keenly aware that without the IT and operational investments necessary to support these critical, customer-demanded changes, the threats represented by so many direct and indirect competitors, such as Amazon, could be devastating,” said Scott Langdoc, vice president and practice lead at BRP. “No matter how extensive and complex the technical, operational or competitive changes to the grocery customer experience, nothing will ever be as important to the intersection of shopper satisfaction and profitable operation as speed of checkout.”
Despite customer demands, Langdoc says that less than half of U.S. regional and national grocery chains are fully enabled with advanced POS platforms capable of supporting the breadth of changing customer expectations—especially when it comes supporting the levels of personalization, engagement and flexibility that customers demand now.
So why haven't more grocers updated their systems?
For some, it's cost. For others, it can be different priorities like store remodels or category changes, according to Langdoc.
"It is often a difficult exercise to determine the business case or ROI for changing or improving POS systems. Though they wouldn’t say it, a few grocers are probably fearful of moving beyond the POS as anything other than a traditional checkout system," he told FierceRetail.
For retailers that are ready to upgrade their POS systems, the first step is to make sure that all of the stakeholders, especially store operations, IT and Marketing/CRM, are on the same page regarding the end goal, says Langdoc. Also, retailers need to determine what customer strategies they want to support, today and in the future.
"All the capabilities of the most advanced grocery POS systems won’t help a company who has not fully defined how they intend to implement and operate with those features," he said.
Obviously, Amazon stands out in creating a unique and personalized customer experience. But BRP is also impressed with those grocers who have blended checkout choice (traditional and self-service) with online ordering, pickup and delivery—especially if they offer location-intelligent curbside delivery of online orders.
Other moves by retailers that have left an impression include upgrades in loyalty programs, making truly personalized offers available to users via their mobile apps instead of continuing with “offers to everybody” promotions. Companies have also increased investments in mobile tools provided to employees for use in customer engagement.
Looking forward, retailers will need to be ready with the right IT solutions.
"Reacting to competitive changes (or new, scary entrants) is not the way to win over current and future grocery shoppers," Langdoc said. "Being fully enabled with the right IT solutions and engaging customer-centric store strategies will give you the agility to adapt to changes in shopper behavior, product trends and the overall market much more quickly and strategically than those that are driven to change by various forms of panic."