The Digital Age of Grocers

Digitization is a key theme in the grocer value chain, unlocking a series of opportunities to enhance the shopper customer journey, both in and out of store, drive efficiency / improvement across the value chain, and unlock new revenue streams.

As consumer demographics / preferences evolve and grocers face increasing pressure from new entrants (e.g., Amazon), grocers have explored digital technologies to drive more efficiency / quality in their value chain and bolster their customer experiences. IoT and blockchain are key technologies in increasing efficiency of value chain and improving food safety / quality.

Additionally, mobile, digital, and IoT technologies are enhancing the in-store experience. Further, grocers have expanded their consumer touchpoints out-of-store through exploration of smart home integrations / partnerships, last-mile delivery services, and end-to-end online shopping platforms.

Below we describe the trends and initiatives across the grocer value chain and shopping journey that enhance shopper customer experiences and drive operational efficiency.

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Digitization has unlocked a series of transformative opportunities affecting the grocer value chain and shopper customer journey, creating opportunities including an enhanced customer experience, real-time operational improvements, and new revenue streams.

Improving supply chain visibility has emerged as a key theme for grocers as new enabling technologies (e.g., IoT, Blockchain) unlock the potential for a higher degree of traceability –  grocers have led partnerships across the value chain to enhance data sharing / collaboration resulting in improved food safety, quality, and other efficiency metrics.

A number of smart home partnerships / initiatives targeting grocery shopping have emerged – these partnerships are focused on improving the digital buying experience, increasing customer reach, improving customer loyalty, and may represent a key channel in the future.

Smartphones are expected to become the centerpiece of the grocery shopping experience as they provide enhanced digital experiences both in-store and online – currently over 70% of US grocery stores are supported by mobile-centric, digital retailer apps.

In-store technologies are proliferating across the grocery store – these technologies can be used to enhance the customer experience, provide grocers alternative marketing / promotion methods, and improve backend store and supply chain operations.

Online grocery shopping is expected to take substantial share in the overall grocery ecosystem through 2025 – there is a fragmented set of online grocery players emerging, targeting disparate consumer segments / value propositions, and leveraging various digital applications / strategies to enhance competitiveness.

Last mile delivery methods have proliferated, providing consumers with delivery flexibility and grocers with a point of differentiation.

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