Grocers Meet the Online Threat

By Kellie Peterson, Director of Marketing at iinside

The supermarket business has never been more competitive than it is today. In any given geographic location, supermarkets compete with traditional rivals including local, regional, national and international stores, as well as farm shares, farmer’s markets, and specialty retailers. Big-box retailers are, of course, also getting into grocery, and then there’s the increasing threat of online retailers.

Amazon’s brand new Prime Pantry enables customers to fill a box full 45 pounds of Honey Nut Cheerios, Wheat Thins, Nutella, Newman’s Own Balsamic Vinegar, Starbucks’ ground coffee and other “every day essentials in everyday sizes.” The company is betting that its user-friendly website and $5.99 flat-rate shipping charge will appeal to customers who would rather shop online than push a cart through a store.

One thing that can be guaranteed is that Amazon will be relying on highly advanced analytics to optimize their customers’ shopping experience, and to suggest products they might not have otherwise purchased. These consumer data points will likely include things like past purchases and product searches, cursor tracking, abandoned shopping carts, online paths, and more.

While this threat is serious, the good news is that with location analytics, brick-and-mortar supermarkets can now employ the same type of data analytics needed to compete for customers in today’s fast-paced world. Location analytics give supermarkets the ability to analyze real-world customer behaviors, down to the meter, and use that information to create dynamic and efficient stores, and to optimize everything from merchandising to workforce hours and in-store promotions.  

These available technologies use low-cost sensors to passively capture location data. Regardless of the specific technology, customers’ information remains completely anonymized unless they opt-in for special promotions, apps or loyalty programs. The industry has also adopted rigid guidelines and security measures to ensure customer privacy.

Utilizing Location Analytics

Location analytics give supermarkets the ability to make large and small improvements across their entire operation, and it’s often the little things that add up to a big difference. On the operations side, location analytics gives supermarket operators the ability to compare departmental performance within a store, or across an entire chain. It enables managers to get an accurate picture of how shoppers navigate their stores, and then test and measure the performance of new store formats. Down-to-minute analysis of shopper patterns throughout the week allows managers to properly staff checkout lanes, reduce wait times, and speed customers through this critical touch point.

Beyond operations and merchandising, supermarkets are also using location analytics to measure and improve everything from marketing to customer loyalty. On the marketing front, location analytics gives supermarkets the ability to measure whether customers are stopping at in-storm marketing displays, such as end caps, for example, and for how long. It also allows supermarkets to see if other marketing campaigns such as print, TV, or online are driving customers to a specific area of store.

In-store locations analytics also enable supermarket managers to analyze the patterns repeat visitors, including their length of visit, and if these visitors are shopping at other stores within the same supermarket chain. These loyalty measurements enable stores to tailor programs and benefits to these most valued customers.

The news that Amazon is using its technology to challenge supermarkets is clearly a threat. Supermarkets, however, are now ramping up their own technology to ensure that every square foot of real estate is operating at its peak; that customers have the best in-store experience possible, and that staff is deployed effective and efficiently 365 days a year. Without these tools, supermarkets are simply ceding customers to the competition.

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