An article in the Wall Street Journal (January 20,2017) titled “Kroger tests sensors, analytics in interactive grocery shelves” describes Kroger, the US grocery chain, deploying sensors that detect mobile devices and, through LCD screens on aisles, interact with customers’ shopping lists. The devices also permit additional information being displayed to customers regarding ingredients through the Kroger mobile app. Will such additional sensors in brick and mortar stores increase their competitiveness relative to pure ecommerce grocery options? How might such devices increase the possibility of impulse buys? Will education regarding novel menu options or substitutes that are healthier or customized pricing increase profitability for grocery chains ?
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Global Supply Chain Musings 
For consumers that are shopping e-commerce for groceries, they may not be doing this because they are trying to find the healthiest products or research information. They may be shopping online because it is convenient and it uses less time than buying everything in the store and standing in a line. As a result, by the company adding devices that provide additional information to customers, it may only affect the current customer base who is trying to focus on being healthy and looking for items based on a recipe. By having this additional information, I don’t believe this will affect impulse buys positively because impulse buys are made with little information and having additional information that shows that a certain food is not healthy may lead consumers to not buy a product.
I agree, customers do buy online for convenience and having an app to provide more information may not necessarily increase the foot traffic for brick and mortar stores.
An article from RetailWire mentioned that only 5.6% of respondents of the survey by Symphony EYC use their mobile phone to actually buy groceries during the past months. Yet the mobile apps for supermarkets are continuously being launched. A good approach to study the benefits would be to know the specific reasons why consumers go to brick and mortar stores in the first place. Is there a perception that delivery at the store keeps food more fresh because they can physically inspect the good?
The competence of offline grocery stores is that customers could have a visual and eyeable chance to choose the right products, while e-commerce grocery options have more convenient shopping experience and a wider variety. As the Wall Street Journal reported, among traditional food and beverage stores, e-commerce only accounted for 0.16% of the $670 billion market. For fresh food, brick and mortar stores have more advantages. This is also the reason why Amazon is also testing concepts of physical stores.
The additional sensors can work only if the customers have Kroger mobile app. For those app users, customized pushes may guide them to walk into the store. Then personalized recommendation of healthier product through those interactive devices may lead the customer to buy the product which is not on its shopping list, which increases the possibility of impulse buys. Hence, this interactive system may increase in-store customer service and correspondingly improve the profitability. However, more convenient and automotive services need to be developed to provide better customer experience and defect the sharp rise of e-commerce.
The commonly agreed competitive advantage for traditional brick and mortar shops remains to be customers’ ability to touch and feel, which may facilitate immediate gratification and trigger impulse buy. Kroger’s technology to display ingredients essentially provides more information and reduces information asymmetry, which actually inhibits impulse buy. Imagine when you see some delicious cheesecakes on the shelf, and the screen suddenly reminds you that each one of them contains 500 calories per piece right before you put your hands on them. A modification will be presenting information about recommendations that promote bundling and coupons.
Most of the shoppers for brick and mortar stores are not used to mobile solutions to improve their shopping experience. The regular customer will usually pick a physical advertisement while entering the store and check the current sales, while going for the same isles they are used to and picking products on their regular shelf locations, holding their paper shopping list.
Thinking this way, holding a phone, with a specific mobile app, being connected, while walking around the store is quite uncomfortable, and could overall delay a regular customer shopping experience.
Although useful for some shoppers, I don’t see a reliable payback for the system just by increasing some small impulse buys.
Shoppers looking purely for convenience would go online for the sake of being able to shop from home. A simple system like this wouldn’t be motivational enough to take somebody to the store.
Although this system provides convenience to the customers by helping customers locate the products on their shopping lists, I suppose this is not a good idea to the business somehow. If the customers know exactly where those products are, time spent in the stores will get shortened. This means the customers are spending less time browsing through the aisles and will have lower chance on impulse buying. I’m not saying we should make the customers get lost in the store but we can provide some information based on their shopping list and attract them to look for some related products that are not on their lists.
I don’t think the sensors will increase competitiveness relative to pure ecommerce grocery options because online shoppers are strictly looking for convenience and you can’t get more convenient than not going to the store at all. Online shoppers can see the ingredients on the website when they shop, so having an app that tells them the ingredients in the store is not more helpful to them than what they already do. I do however think the in-store app could increase the possibility of impulse buys. When a shopper enters an aisle of the grocery store and the app tells them what is on sale in that aisle and suggests bundling goods and meal ideas based on items on sale, it could influence the shopper to buy more than they planned. If these features on the app were combined with other uses like self checkout by scanning items on the app and locating items on a map through the app, brick and mortar grocery stores will continue to compete with ecommerce grocery options.
One step deeper question would be “Who is the target audience for the interactive grocery shelves?”
If we are talking about the customers who still buy their grocery and other items from brick and mortar stores then yes it could be value add to those customers although that would require them to use technology and app on their phones and you then question why are they still shopping in a store and not online.
If we are talking about customers who are buying online which is 25% currently but will increase to 55% in the near future according to the below report by NIELSON.
Click to access Nielsen%20Global%20E-Commerce%20and%20The%20New%20Retail%20Report%20APRIL%202015%20(Digital).pdf
In that case retailers such as Kroger will not have any competitive advantage over e-commerce. There is no value add for consumers already shopping online and receiving same or similar features or suggestions or information about the products that they buy.
Talking about impulse purchases, we are back to consumers shopping in the stores and not online. There are possibilities of impulse buys as day by day consumers are getting themselves informed and show more interest in knowing details about each ingredient of food item they might purchase.
They might prefer knowing details and suggestions rather than searching themselves on their phones while shopping or waiting for a store person to answer their questions.
But again from the perspective of a Retailer there are some important questions that need to answered.
1. Does this really add value compared to the amount of investment such an idea would require?
2. Would it enable them to retain more customers or gain consumers from the e-commerce side?
Probably not and it is yet to be seen what ping-pong game do retailers play, now that almost all major players have their hands in physical stores and have a presence online.
I do not think this feature will increase competitiveness for brick and mortar locations compared to ecommerce locations. The new features described offer marginal increase in convenience compared to home delivery and e-grocery shopping. The item could increase impulse purchases through instant coupons loaded to a user’s smartphone app. It could also provide suggestions for associated food items connected to other recipes. However, the cost of infrastructure and upkeep needed to incorporate such a system seems much larger than the potential benefits. Customized pricing could increase profitability. This could balance an individual’s price sensitivity with overall product demand therefore increasing purchases for time-sensitive food products. This would lead to less waste and more revenue for the store.
I believe that the use of these sensors and other technology can become sources of competitive advantage for brick and mortar retailers because it allows them to combine the analytics and technology that the eCommerce grocers offer with the tangible experience of being in a traditional grocery store. Because the extension of technology into the brick and mortar setting is much closer to the experience that consumers are accustomed to, it will likely be adopted by consumers more quickly than the use of eCommerce grocers as the primary source of grocery shopping. Providing suggestions of what other customers purchased along with a given item would help to spur impulse purchases (like Amazon’s suggestions for products). Finally, novelty items and health conscious options often command a higher price for a similar product, and customized pricing encourage consumers to purchase in higher volumes. Therefore, each of these have the potential to increase the profitability of grocers.
Looking at the integration of sensors into brick and mortar grocery stores, I think these stores immediately become more competitive as compared to ecommerce grocery options because they will increase total amount spent per trip and possibly upsell certain items. The number of impulse buys will certainly go up, especially in larger stores, as part of the reason more products are not bought is because a customer possibly couldn’t find them or didn’t know they existed. With the customer being better informed, the customer could also see the benefit of spending less time as the grocery store which most customers would see a positive advancement. Furthermore, with the customer being better informed about novel (and most likely more expensive items), they will at least consider buying them, which makes the grocery store better off than when the customer was uniformed. This point also applies to the healthier options as well. The idea of customized pricing could also increase profitability as these sensors could inform customers of items that would normally go well together or even entire meal ideas thus the chance of upselling or selling more items becomes possible. Though pure ecommerce grocery stores may be the only grocery stores in the future, the advent and implementation of analytics devices will stave off the ecommerce take over for a while longer as individuals that prefer to have options at their fingertips continue to stop at brick and mortar stores.
I agree with Nathan that additional sensors in brick and mortar stores can increase Kroger’s competitiveness comparing to pure e-commerce grocery options. By these sensors Kroger offers its customers more information about the product and Kroger can attract picky customers who really care for the ingredients. Some customers can give up to buy a new product because they don’t know the product quality and ingredients. If Kroger puts these sensors, new products can be bought more quickly with the help of immediate information which can increase impulse buying. Also, customers can see this as a better service and be more satisfied with their shopping experience. Suppliers who want to introduce new products to customers can offer better prices to Kroger to increase their products impulse buying.
Additionally, with this technology Kroger will have more exact data for each individual customer habits, who use the mobile app, like how much time spent by the customer in the grocery store, in which order the customer buys the products, how many times in a month the customer visit the store, which ingredients the customer doesn’t like. Therefore, these sensors can increase competitiveness of Kroger by increasing the data for customer habits and providing better customer service.
I agree with Kyle in that I don’t think sensors in brick and mortar stores will help with competitiveness because of the IT infrastructure costs. It would be very difficult to endure those costs and compete on prices with grocery stores like Walmart and Kroger. Those infrastructure costs cannot be passed onto the customers. However, I think the idea of having technology to manage inventory at grocery stores is something that will be taken on by the big grocery chains soon. Target has already been working with MIT on developing spectrometers that can be used to reduce costs related to wasted, expired food products such as fruits and vegetables.
Source: https://corporate.target.com/article/2016/03/mit-food-future-colab-progress
The internet of things is revolutionizing the way we do things and the grocery industry is one of the first to catch the wave. The use of AI in determining what products the customer is buying (https://www.technologyreview.com/s/608765/i-tried-shoplifting-in-a-store-without-cashiers-and-heres-what-happened/) without actually having the customer to physically check out and pay, is another advancement (similar to AmazonGo) in which the grocery market is trying to increase customer satisfaction and reduce the time spent by the customer in the shop. By integrating this data with the app and pinging the customer when he is near the product would definitely increase the sales of such products as well. This ping can also include health benefits and long term effects on health if consumed which in turn would prompt the impulse buying nature of the customer.
Different characteristics or shopping behaviors already make customers choose whether they would shop grocery online or at store. This sensor would affect few customers limited with specific type of shopper, like housewife. For example, usually for men who have a shopping list on their mind or notes, they will just directly go to those products, grab, and go. He would even not look at his phone and give Kroger a chance to promote. I guess only those customers who would like to spend one or two hours hanging in the store would be interested in this service.
The sensor which display ingredients of the product on the shelve will somehow convenient those customers who still habitat shopping at stores to see and feel the actual products. However, this will only works for those people who has the APP on the phone plus they would like to spend their time waiting in line or either go around between shelves to see different products. Now more and more people would like to do shopping online, as long as they know what they want , they can just add those products to shopping cart, checkout and wait product deliver to them. The additional information has all displayed on webpage, they can choose to check it or not. Thus the app will be useless for those people who prefer to shopping online instead of step out home spend extra 1 or 2 hours to buy grocery at stores. So, I don’t think such additional sensors in brick and mortar stores will increase their competitiveness relative to pure eCommerce grocery options.
These sensors will definitely increase the competitiveness of grocery chains because in the future marketing focused towards individuals will be the norm and grocery chains would dish out options catering to the individual preferences. Secondly sensors can also help to identify the products that does not reflect in the bill which basically means sensors can give an idea about the products that the customers took off the shelf to check but did not buy.This information can better prepare the grocery chains to devise prices and allocate shelf life to products that a customer will buy impulsively or products that the customer would otherwise have not bought.
Healthier alternatives and customized pricing will increase sales and thereby profitability if the product is of good quality and tastes good.
The challenge facing shoppers who still prefer the physical experience is finding their items once they are in the store. With the exception of those expert more frequent shoppers, almost all of us struggle to find what we’re looking for. If Kroger can find away to make the experience at their store easier by leveraging these sensors in combination with interactive screens. That might create a new improved experience for the customer once they visit the physical store.
On the other hand, this will not solve the challenge presented by on-line grocers when it comes to the most traditional items that almost every household buy on regular basis, and it might be still more convenient to get them from online grocer at anytime.
Using sensors in a brick and mortar stores does have the benefit of providing additional information about the products to the customers which improves customer service, but it doesn’t necessarily lead to more footfalls in the store. People who prefer such stores over eCommerce stores prefer those for various reasons such as accessibility, delivery time, control over the quality of the product(self -inspection) etc. While on the other hand, eCommerce stores are convenient and had the advantage of additional information before the stores decided to use sensors to provide the same service.
So, it depends on the overall dynamic of these factors and not just the improvement of one particular factor, like in this case, additional information.
Also such devices might lead to impulse buys for some products which are not on the list, but discourage impulse buys which are not healthy for the customer. Like the example stated above by Eric about cheesecakes, it might be discouraging to some customers. So, in my personal opinion, such applications will result in decline of impulse buys, but again how the Store plays this, for example suggest substitutes that are healthier or offer customized pricing, might change the endgame.
I think this function won’t increase the competitiveness of Kroger but it would allow the company get some useful information to their database and analyze their customer behaviors. There are two prerequisite for this function, one is having Kroger app and the other one is changeable shopping list. And it would only help customers who still hesitating for specific brands or packages, these customers would affect by this function but won’t buy more.
When it comes to impulse buys, it always related to price or limited products. By this function, it could only help customers to decide which to buy but not buy more. And If Kroger expending use this sensor to every store, should Kroger pass this cost to their customers? or they could absorb by themselves? Passed costs to their customers would probably loss part of their customers to their competitors. So, i do not see any critical benefits to apply this sensor.
I think these additional sensors will increase the competitiveness and also the sales revenue. For example, when a customer goes to the grocery store with a shopping list, and the Kroger mobile app provides her some other ingredients related to her shopping list. This could attract her to buy other things which are not in the list. But, if people who used to online-shopping, I guess, they will still do the online shopping.
Kroger’s new technology seems to promise a more efficient shopping trip — one that saves time searching the store and highlights products shoppers might be interested in but don’t have on their lists — while at the same time offering interactive elements similar to online shopping. In short, Kroger is creating a better experience for its shoppers.
Moreover, the sensor offers a new way to collect data. In Kroger’s case, the company already knows a lot about its customers through loyalty card data, and digitizing the store could provide insights about how customers move through the aisles, what items respond well to promotion, and so on. This is a delicate balance, though. Product recommendations should nudge rather than bombard customers, who likely won’t want the equivalent of pop-up ads invading their shopping experience. The same goes for the amount of product data provided to shoppers, which could easily overwhelm.
Using sensors to detect individual customers and customer traffic at stores is a smart move by Kroger. Ecommerce shopping attracts the customer and improve the likelihood of purchase by providing various suggestions using their products browsing history. The idea that Kroger is testing in its stores, replicates the ecommerce shopping model. By providing the similar items or items that are healthier or better and cheaper, customers will like the shopping experience at stores. By suggesting personalized list of products to the customers and their response to the suggestions, helps Kroger to improve their learning about customers preference. This learning helps to improve the demand forecasting and attracts customer to visit store and increases impulse buying practice.
The practice of providing customized options and pricing increase the profit of grocery stores in different ways. First, it improved prediction of demand and reduces supply chain cost. Second, customer purchases all grocery items in the store if they get all their shopping list items in a customized low cost. Stores can predict the customer behavior and suggest an entirely new product in the shopping list. If the customer has affinity to the product, they will end up buy it impetuously.
Personalization seems to be a growing and winning trend in many industries. If Amazon can do it with books, it seems like a wise idea for grocery stores to do the same. With a seemingly infinite variety of brands for the same product, some of these recommendations could help to offset the “analysis paralysis” that customers face. I could see the issue of customers’ desired privacy coming up, however. Also, the natural direction this will lead in, however, is stores without cashiers, which is likely to have a substantial impact on unemployment.
Looks like brick and mortar stores are fighting tooth and nail to become relevant in the age of online retail. The idea of providing more curated information to customers is interesting and if done right has a potential to revolutionize shopping experience. The article suggest that app uses the shopping list of the customer to help them find the products they want. If that is the case then customers will quickly find what they want and all the traditional strategies of making the customers loop in the store to make impulse buys will be gone. But the upside is if customers are hooked to the app and are not checking out products by themselves, it’s possible to create a bias and make customers buy highly prices items or items what the stores want to sell. Given the ability of stores to control what customers buy, there will be significant incentives or complaints from the companies of different brands. The sensors will create more insightful data and brick and mortar stores can use this data to stock up products what customers are inclined to buy and reduce inventory or even sell this information to product companies for better rates, increasing the stores’ profitability.
Yes, by implementing the sensor, this has increased the competitiveness of brick and mortar stores. By providing other products that are similar to the ones the buyers are purchasing, this will increase the volume that are sold, especially with impulse buyers. I think education regarding novel menu options or substitutes that are healthier will increase profitability because people are would be more inclined to make the purchases.
Kroger’s Chief Information Officer Chris Hjelm has described this move of Kroger as a way of “Bringing technology to life in the store”. In my opinion, there are two sides to any coin. In this scenario, on one side are the prohibitive costs involved in developing such Artificial Intelligence (AI) algorithms and finding the right resources to deploy them real-time. On the other side, such an initiative would definitely help Kroger in gaining significant first movers’ advantage in the grocery retail space. Imagine walking into a huge grocery store and knowing where exactly your shopping-list items are, without having to spend 2 hours squandering around for items! This saves a significant amount of time and enhances the shopping experience of customers-especially in the age-bracket who are still not accustomed to online grocery purchase. An interesting analogy I can think of in the financial services space is that of PayPal, who gained a significant competitive advantage against several of its competitors such as Apple, Yahoo, Google Checkout etc. Paypal pioneered many of the frictionless mobile “in-app” payments and spearheaded innovative initiatives such as using smartphones as a payment gateway instead of the traditional brick-and-mortar cash registers. Paypal also pioneered the “Digital Wallet” movement, along with Mobile payments where customers could scan the barcodes of products for a hassle-free checkout. Although customers seemed sceptical about this initially, these tech-initiatives by Paypal finally gained widespread traction by both customers and merchants, thereby making them the market leader. I think such an innovative move by Kroger would definitely help prove beneficial to both the customer and the grocery store in the long run as it is a win-win situation for both-Kroger gets to track consumer spending choices and behaviour thus reducing chances of stockout, whereas the customer has an enhanced shopping experience in terms of saving time and readily available items.
Sruthy,thanks for sharing information on how PayPal gained a competitive advantage with its technology. But don’t you think that given how customer base for online shopping is increasing, this technology from Kroger still has a lot of potential risks? Imagine having senior citizens who are not so aware of using apps, now made to use an app while shopping..so I am not sure how much value it can really add to Kroger. If stores like AmazonGo use this technology along with having no checkout counters, they will be able to gain a bigger advantage than Kroger.
This is indeed an innovative idea, however, given that ecommerce customer base such as for Amazon is growing day by day, the question is how much value it can really add for both the customers and brick and mortar stores. I feel that such benefits are already available for customers buying online as they can sit at home, click a few buttons, get all the suggestions and healthy substitutes options right there on their screens rather than going to the stores. However, having said that, for Kroger, this would be a really good idea in terms of gaining a competitive advantage over other brick and mortar stores only for those customers who still prefer to buy their groceries at physical stores. Still, there is always a risk of stores like AmazonGo who can incorporate this innovation along with having their customers not having to waste time at the checkout counter. As far as the mobile app goes, I am not sure how much it can really benefit as a major part of those customers who prefer brick and mortar stores are senior citizens who may not be so used to using apps and that too using the app while shopping. By having this additional information, I don’t think it will increase the possibility of impulse buys as usually, impulse buys are made with less information and showing the ingredients may make the customer not want to buy the product. Certainly, through effective marketing and promotional activities, educating customers about healthier options can have improve revenues of grocery chains but as far as profitability goes, we will need more information regarding the investment and running costs of this technology.
I do not believe that additional sensors in brick and mortar stores increases their competitiveness with pure ecommerce grocery options. These two options are appealing to different customer bases. Ecommerce grocery options appeal to those who are looking for convenience while brick and mortar stores appeal to those who like using their physical senses to shop for groceries. Also, these devices increase the possibility of impulse buys since these devices would be telling customers what is on sale. A customer would not necessarily know this kind of information if they were going through a store without this device, so having this knowledge from the devices could push them to buy whatever it is that is on sale. In addition, education regarding healthier substitutes amongst other things would absolutely increase profitability for grocery chains, as long as the technology for these devices is not overly expensive. Healthier substitutes also tend to be more expensive than their original counterparts, so customized pricing in this sense could be beneficial for both store and customer.
Derek,
Do you think that this could reduce the need for physical coupons, flyers, and even some signage? If customers are willing to view everything via their smart device, could the retailers save costs. I would speculate the cost of changing prices and signs as well as the cost of “miss priced/labeled” (because a customer will tell you when the labeled price was lower but not higher) are significant. Would retailers then have to provide devices for non-smart phone customers to use or will these customers eventually be forced to adapt? I guess non-device users may just have to shop without knowing the price until they check-out, would customers be willing to shop like that?
I don’t think use of sensors and interactive grocery shelves in a brick and mortar shop will be able to give competitive edge over eCommerce grocery options. The intention is to suggest healthier alternatives which I believe will hurt the position of other general products on the shelf. E-commerce grocery chain works in a completely different fashion, they provide a platform to sellers to list their offering and is available to a huge population with different tastes and preferences, so the impact on sales of one product is not that big. However, brick and mortar shops cater to a limited and repeating population and a shift in product preference can cause irreversible loss of sale.
Also, another reason which can arise is the amount of data and the interference in the shopping list of the consumer. Usually the buyers going to an offline store are those who want to see and perceive things and then make the decision to buy. Unwanted suggestions may make the shopping experience unpleasant. However, impulse buying will increase because of the suggestions as there are several items which can be suggested based on the items a person has picked up.
However, use of analytics, price comparison with online stores can be made and displayed on LCD which will increase the sales and thus profitability of store.
These sensors could play the same role that Amazon’s suggestions do. We have all experienced Amazon’s suggestions, and a lot of the time it brings me chills to see how on-point the suggestions can be. These sensor’s could then analyze customers’ shopping patterns in order to recommend similar items to them, or even complementary items to ones they have already selected, in order to maximize sales. These sales, also known as impulse buys, were not on the consumer’s mind before entering the shop and would not have been purchased otherwise.
Karim,
Do you think that the use of sensors with smart phones may be able to direct customers to the products location? If so would this reduce the planogram agreements?
It seems that the ability to direct the customer to an alternative or complimentary product that is in a less convenient(not eye level) would reduce barriers for these products and make “premium shelf” space less sought after.
Also, do you think some retailers would abuse this and offer a “special coupon” or “deal” if you watch ads or participate in surveys? Is this good or bad? Could it generate more capital for the retailer?
I don’t know that these sensors and technology will make Kroger more competitive against eCommerce grocery stores. But, I do think that it may help to keep its current customer base from going to eCommerce retailers when they are sold out of a specific product. The ability to offer substitutes and provide information about them could help to sway customers to purchase a slightly more expensive product. With the ability to change prices dynamically, Kroger may even be able to change the price of a substitute product when stock-outs occur. This could also make customers try new products and even switch to those products in the future. I think sensor technology has a lot of potential to help with inventory management and help to ensure that stock-outs don’t occur when more product is on-hand in the back of the store. It would seem possible that if stocks exist in the backroom, if you request that item, it could be hand delivered to you by an employee while your completing you shopping.
In my personal opinion this apps and extras to grocery shopping won’t do much competition to ecommerce grocery stores. This “extras” will just make the trip to Kroger faster and will help the store to incentivize the person to buy a little more of this or a little more of that. Ecommerce for grocery shopping is always a step ahead of brick and mortar stores. You have the capability of ordering whatever you need and the amount that you need without setting a foot outside your place or wherever you are.
This compliments Kroger wants to introduce might help them in the sense of marketing their products and incentivizing customers to buy other king of ingredientes or extras to enhance their experience when cooking. Another point that ecommerce will always be ahead of brick and mortar grocery store is the stock. Keeping stock for perishable items is always difficult. While this app and sensors might reduce the risk in the physical store, ecommerce will always have the advantage. Shelf space might be another issue that this idea of sensor will make efficient.
Carlos,
Do you think that these sensors along with the app could also assist with identifying products that are being recalled? Meaning that a retailer could better track recalled products that are on shelves and possibly send alerts to app users to stop using the product? Possibly could this reduce/eliminate the reverse supply chain and customer service side of recalls? Meaning that a customer confirms they have the product, provides a picture then throws it away(assuming it can be thrown away), and receives compensation to be used in store(because that is better than handing out cash to be use anywhere). What are your thoughts?
Recommending customers and capturing there response is the new key to decoding perceived-demand supply relationship. Thus, implementing this technology will benefit Kroger in several ways.
Displaying ingredients through the app is a unique feature and will be useful to customers as new buyers of a product don’t have to travel across the aisle to compare ingredients in this growing diet-conscious population. Suggesting other items based on the shopping list can boost sales as that will lead to more impulsive buys. All of these, however, doesn’t deviate customers from e-commerce grocery shopping as the main reason for online grocery shopping is the convenience of not traveling to the store over everything else. Again, education regarding healthier options can be very easily adapted by the e-commerce companies as they already have the interface and the tools.
I think additional sensors in brick and mortar stores will not increase their competitiveness compared with eCommerce grocery options. One reason is that I don’t think customers are willing to spend time in checking information like ingredients of products in store. In general, they check information before they go to store and then stop by and check out. Another reason is that physical grocery store and eCommerce focus on different aspects, which are not comparable in some way. People choose shopping online is as result of convenience and for people that prefer going to physical store is because they like the physical shopping experience and short lead time. In order to impulse sales,these sensors can be used to provide suggestions for similar products or inventory information when stock out happen. Customers will know when items will be replenished or where are some other locations having goods in stock.
I think that haveing this as an option will work as a way to increase profits for the grocery stores. With more access to there customers information about preferences this will help them better predict demand as well as suggest more expensive options to the customers. I feel this will also work in a similar way to pintrist which shows great versions of what someone could make and how to make it. This combination will allow grocery chains to make suggestions to the customers that will both appeal to them and make it a more personalized shopping experience.
Even after the emergence of e-commerce players, brick and mortar retail business still holds a considerable market share. This is because people have different tastes and they like to get newer experiences. Usage of LCDs and interactive displays should help in increasing the impulse buy if the consumers get attracted to use them as their shopping facilitators. Therefore, so long as the consumer finds value in these initiatives, there is an upward potential to increase the cart size of the consumers and cause them to shop more.
Deploying sensors is a very innovative move that can be expanded by marketing and the impact of this move can be expanded through some marketing campaigns to make more profit for Kroger.
But the question is whether the usage of sensors will bring more profit or not. Because the cost of using sensors is not a small number: Sensor cost, software cost and training cost etc. Therefore, even if this move could bring more profits, it is not known whether it can offset the additional cost.
But using this sensor might have other invisible benefits, like if the sensor could match the inventory system, it is equivalent to have an additional ERP system in the grocery store. In the same time, the grocery store should consider how to improve the sensor performance. For example, optimize the user experience of the App and achieve a one-stop shopping process.
Yes. I feel adding sensors would increase competitiveness. While e-commerce shopping has its advantages, the sense of touch becomes especially important when shopping for durable and perishable items that are available in brick and mortar stores. The inclusion of sensors can bring down operational costs through the reduction of labor (shop assistants/floor assistants) and also increase efficiency and ease for shoppers. While on the positive side, increasing ease and efficiency by providing additional information about the products purchased will improve the likelihood of frequent or repeat purchases, the negative side is reduction in impulse shopping. However, the tradeoff can be prevented by using the same App to target customers with specific products that fall in the umbrella of impulse buys.
These additional sensors can increase the competitiveness of the store. They can provide customers with more information through the LCD screen, help customers to buy more suitable products, and improve customer satisfaction. At the same time, these devices can instill the propaganda of their products to customers, create subconscious minds over and over again, and increase the impulse consumption of customers. New menu options or alternatives to health or copyright pricing can increase the profitability of grocery chains. Because the new option can attract customers, and alternatives to health or copyright pricing can give customers a good experience. Ordinary customers have already considered what kind of products they need to buy before entering the store, but if alternatives appear, or if there are better propaganda methods to raise consumer interest, the profitability of the chain stores will rise.
Using the lcd screen in the physical grocery store and the kroger mobile app to provide customers with detailed information about the product can give the customer a better user experience, on the one hand, face-to-face contact with the real thing, comprehensive evaluation of the sensory experience such as vision, touch, etc. Commodities, on the other hand, use the app to supplement the limited information that the store provides to the customer, so that the customer knows more about the item and confirms that the item meets its needs. This pure e-commerce grocery can not be compared with it. These devices can improve customer satisfaction with the product during the application process, and their competitiveness can be improved. However, as the amount of information provided by these devices increases, the customer’s knowledge of the product increases, and the customer gradually understands the actual value of the product, and the proportion of impulsive consumption that may be generated gradually decreases. Through similar education, stores can reflect more outstanding human care, from menu options and healthier alternatives, etc., which make the grocery chain popular with customers and improve the profitability of chain stores to a certain extent.
In my opinion, with such additional sensors, brick and mortar stores can increase their competiveness compared with pure ecommerce grocery options. First of all, with the population of online shopping, brick and mortar business becomes more and more uncompetitive because of the low prices and multiple choices of ecommerce grocery. Using Kroger mobile app, customers can have more interaction with goods on the shelves. To be more concise, customers can have more convenient and novel shopping experience in the grocery, which may attract more customers who pursue novel things. Moreover, such devices increase the possibility of impulse buys to a large extent, since the devices also permit additional information regarding ingredients, then customers may be attracted to buy those products and forget what they really want to buy.
Most brick and mortar retailers today are incorporating technology to compete with e-commerce competitors. That said, what makes shopping in a physical store unique is the human touch that a sales person adds to the experience. The sensors give quick information and suggestions to customers like Amazon’s suggestions do, eliminating this one parity of automated suggestions. It is not a differentiator, however. Such devices do increase the possibility of impulse buys because the customer is being prompted to purchase things that he/she did not intend to buy in the beginning. Any development from the seller side that provides education and customization for the customer will always be well received by the consumer. It might imply that there will some initial cost associated with getting the right information and developing the right platform, but it will definitely be worth the investment as customers are more likely to shop more often once they believe that the store has their best interest in mind.
The segment of people who prefer online grocery shopping to those who prefer going to brick and mortar stores is quite different, with only a little overlap. The two business models offer different value for the customer. Online shopping offers convenience, time saving and suits best those people who know exactly what they want. I feel brick and mortar shops like “Payless” or even “Walmart” offer the traditional shopping experience. Many grocery items need to be felt and touched in order to gauge their quality, and that is something online portals can never deliver.
Smart brick and mortar stores are a positive step in improving the customer experience, but I feel that these will not necessarily increase the stores competitiveness with respect to online portals. Everyday low pricing, clearance sales etc already create the “impulse” buy sentiment in customers.
Regarding healthier substitutes, I strongly feel that this option will help people decide better on what ingredients they can use to make positive changes to their diets. People do not bother to read the product info printed on it, thus misinterpret a lot of nutritional information advertised by manufacturers.
Implementation of technology in traditional brick and mortar shops is one of the ways that such shops can challenge e-commerce giants like Amazon. Introduction of same day and next day delivery by companies like Amazon has taken a considerable chunk of the market share of traditional stores. Now, it is all about customer delight and adding value. Using technology in a brick and mortar store to educate the consumer about better prices, products and discounts would give the customer a valuable experience, something that Amazon would not be able to provide – a touch and feel of the product, along with predictive analytics.
Devices like these tell the consumer about similar products in the aisle, leading to higher chances of impulse buys. Ready to know information related to the customer’s exact needs such as suggestions tailored to the customer like healthier substitutes and customised pricing would make them at least stop and think about possible options, leading to spending more time at the store, leading to higher sales.
One thing that sets apart the Brick and Mortar stores from e-commerce industry is the visibility of the product, since the products are right in front of the customer the experience is swift and easy as compared to the e-commerce websites. Any new technology implemented in such stores will serve as a value proposition to the customer, as he is not accustomed to such experiments.
These interactive shelves which suggest the details of the product can be analogous to the ‘Product features’ and ‘Reviews’ option of the e-commerce websites, thereby altering the tendency of the customer. As a marketing tool, these screens can advertise extravagant products which will increase the tendencies of impulse buying. Suggestions of a healthier option or an alternative to a customer can be a formidable instrument in stressing a more profitable product for the retailer.
Thus, any technology which provides transparency and genuinely increases the consumer shopping pattern will prove profitable and competitive for any industry.
I think adding sensors in brick and mortar store will definitely add value as compared to the buying a product from e-commerce site. The customer will have a chance of comparing the ingredients of two different products and will have a chance of choosing the one which suits them better. This makes a particular product personalized to the customers. This will also help the customers understand the product better if they do not have knowledge about it. For the suppliers, this information would be useful to understand the demand not only for products but also for the ingredients specifically using which more variety can be created. Since many people are focusing on fitness, this will help them to choose better products. This will make planning easier for the suppliers and will help them to plan inventory accordingly.
Kroger in 2018 has implemented the Digital Shelf edge in 2798 stores in 38 states involving 7.5 million SKUs. This is the first step towards customer-focused brick and mortar stores. This shall open the ways for mass-customizing the shopping experience in a brick and mortar. This will enable stores to reap the benefits of customers analytics which was limited to an extent to only e-commerce grocery options. This will allow for a more personalized shopping experience in stores in comparison to most e-commerce grocery options. Furthermore, unlike e-commerce options, this allows customers to physically examine the products as well as satisfy the demand immediately. Thus stores will be better equipped in satisfying consumers need with enough sensors in place to collect the consumer’s data. with the power to directly see into the consumer’s shopping before the purchase is made, the store interface can suggest cheaper alternatives and can become a part of a consumer’s decision-making process. This will also enable the stores to better gauge the demand of consumers and can help optimize their inventory and thereby reducing over-all supply chain cost. These savings can result in cheaper prices for the consumers and thus consumers can get better service rate at cheaper price.
The reason for me to purchase grocery stuffs online is mainly because I don’t have time to physically visit stores and look for items, and because it also takes additional effort to bring the shopping items back to my apartment. In this sense, the major factors that I usually consider are the price of the products and their delivery lead time. The additional, interactive information provided across grocery shelves is definitely useful, and even fun if I’m informed without any personal effort to look for it, but it cannot be a strong motivation to make me visit so-called ‘brick and mortar’ stores instead of ordering what I need today using a mobile app and having them at home within one or two days later. So I think the main strategic points for the new service should be focused on offering better experience to “walk-in” customers, not e-commerce consumers.
It should increase competitiveness for brick and mortar stores. Interaction between stores and customers would generate important data about customer preferences. Such information will help stores to generate precise decision about product mix, order quantity and order frequency. These improvements in operation would reduce cost substantially and improve profits margin. It also helps to encourage customers buying. E-commerce has a big advantage regarding convenience but there is one thing ecommerce can’t compete with brick and mortar stores. That’s consumption experience. Frome consumer psychology aspect, seeing physical products would encourage impulse of consumption. Application of this technology will exemplify advantage of brick and mortar stores.
E-commerce options in grocery have not eliminated physical stores in fact, a synergistic approach balancing all channels is the way ahead as can be seen with Amazon’s GO. A highly data-driven sales mode ensures pointed advertisement, product rating and review options etc in e-commerce. Addition of such customizable features to the physical stores will enhance the buying experience, help customers make informed purchase decisions and create a virtual shelf space offering more visibility to products. It may redistribute the current online-offline grocery buying behavior, for customers who can now have more information available in offline mode can switch between modes also creating more capacity for the company in the online channels.
This will be an avenue for boosting sales and unconstraining physical stores.
I believe that every bit helps the supermarket chain help it retain its competitive edge in the next generation. Having the app may be a hinderance to it because it is one more added step that the user must do in order to gain the functionality within the stores. but maybe having it run in the background would make it easier. It would be really neat if it can remind me of the groceries I forgot off my grocery list and cross off all the items I was getting one by one like an achievement in a video game. It could fuel impulse buys, if the app was able to gather items I normally buy and offer deals based upon them or show them to me if they were on sale. I think novel items or healthier substitutes could definitely help consumers make better choices. The caveat is that the app has to have enough historical data in order for predictive analytics to work for the healthier substitutes.
While brick and mortar stores provide touch and feel experience to the customers, e-commerce grocery stores attract its customers by educating them about the product through product descriptions and customer reviews. Sometimes customers are reluctant to read the product information on product labels and they do not opt for impulse purchases in a brick and mortar store. Whereas, customers purchase a lot of stuff online based on the customer reviews and recommendations, even if they do not explicitly require those products. Similarly Kroger’s interactive mobile app can help boost the impulse buys through educating the customers about a new product or brand in the store. Also, brick and mortar stores can increase customer satisfaction and thus increase revenues through these kind of interactive apps.
In my opinion, this move wouldn’t help the brick and mortar establishments to become more competitive. Engaging with the customer via his phone and providing certain data such as ingredients may not be a strong factor in the customer’s preference. If the products being purchased are repetitive in nature, then this effort will have no impact at all. In large outlets such as Walmart, however, this sensor could help locate products. E-Commerce provides an easy way to get many products, therefore such a move in the physical stores may not add much value to consumers.
In my opinion, such additional sensors in brick and mortar stores can help them to reduce operation cost by provide a more effecient way to analysis customer’s preference and get an more accurate way to forecast customer’s demand. However, I really doubt this technology can increase their competitiveness relative to pure ecommerce grocery.
As far as I am concerned, the reason why I chose the brick and mortar stores to buy groceries is because, to compared with pure ecommerce grocery, brick and mortar stores can provide their customers with the most intuitive expression of the goods. Every items are placed on the shelf, I can directly judge them, rather than use eatra time to read ‘the addition information’.
Brick and mortar stores do not need to worry about their attractiont is because customers, like me, may have an concenred about freshness of those products at ecommerce stores.
Smart shelves with digital displays are coming to more supermarkets as retailers replace paper labels with advanced technology. Kroger has already started to use EDGE, which is a cloud-based display solution for shelves. Kroger EDGE displays prices, advertisements, nutritional data, coupons and videos.
Smart shelves will change how customer shop in the future. From digital displays that show instant price changes to advertisements linked to customers’ shopping list, we can expect the technology to become more personalized. At the same time, customers will also be attracted by the supermarkets with interactive shelves because of its convenient, efficient and innovative. The additional services provided by the supermarket with interactive shelves, such as novel menu based on price customize or substitutes, will bring a pleasant experience to the customer and increase the sales of the grocery products. The grocery or supermarkets had smart shelves will, therefore, benefit from it.
Sensors in grocery markets can be effective and may retain the customers from shifting to e-commerce grocery if they do not complicate the overall customer experience. E-commerce has made it lot easier for the customers to order by the action of a click. So to compete with the same, sensors and other technologies in brick and mortar stores would add value to customer experience and help retain the customer base. Also, this would personalize user experience and add value. But the major concern is the cost of implementing this automation practices. Because with comparatively lower margins in the Grocery space, implementing costly projects is difficult as the consumer prices cannot be affected or else you lose customers. So the analysis about the automation project being successful and the return on investment would be the key factor in deciding the implementation of the same.
Yes, these additional sensors and LCD screen can increase their competitiveness in the current industry conditions. How? They are bringing about a new experience for the user, which e-commerce shopping creates as well. One important advantage that brick and mortar shops still hold over e-commerce is being physically present before the product. They need to capitalize on this advantage and help turn their ship around. Impulse buying and profitability can come after they capture the attention of their customers, but the first step is to catch their eye to show brick and mortar shops are innovating. Once that’s done, the entire experience of shopping with the help of technology should be very user-friendly. If that’s executed well, and the results are positive then they can focus on subsequent goals.
I don’t believe Kroger’s attempt will help their competitiveness relative to pure e-commerce grocery platforms. Consumers use e-commerce grocery platforms for the ease of use and convenience. To me, this seems to be a mutually exclusive demographic than the archetypal brick and mortar grocery shopper. With that assumption, I don’t believe this innovation will increase impulse buys within these consumers. I believe customer tendencies with their grocery preferences are extremely “sticky” and hard to change. The e-commerce grocery platforms capitalized on the existing fast and convenient demographic; there is little the brick and mortar stores can do to retain those convenient shoppers outside of delivering their groceries or having them ready for car side pickup (ex: Walmart).
Touch and feel of the product along with customized user experience will add value. The sensors will help customers review the product, educate them about ingredients, and suggest alternatives, thus enhancing decision making . This step will be beneficial for the brick and mortar store as it can create a personalized user experience like Amazon and boost sales through impulse buying. The data will help to analyse the customer behavior and predict demand. Analyses of the data can help to plan and manage the inventory. Kroger will gain competitive advantage for the improved and customized shopping experience and increased revenue.
One significant disadvantage of grocery chains to e-commerce grocery websites is that those grocery chains have the difficulty of collecting in-store customer behavior data. Now the interactive grocery shelves now introduced a new way to grocery chains for them to collect individual customer and understand their customers better.
However, in my opinion, it would need to take significant marketing effort to let them just try the mobile app for this feature, especially for the customer base who might not know how to use or willing to use mobile app when completing their shopping list in the store. Shoppers are so used to the way of shopping that they used to be, and they have experience in what brand to buy for yogurt and for other stuffs they need etc. They don’t need to know too much about the details. Even if the LCD screens are widely appreciated by shoppers, a more crowded and less comfortable shopping environment may occur as shoppers would be staying in front of the shelves and reading information that they may not care about. From this perspective, when speaking the possibility of impulse buying, the interactive grocery shelves’ effect may be limited. The rationale behind is that for the majority of the group who go grocery stores regularly, their focus is getting what they need as soon as possible.
I believe that additional sensors in brick and mortar stores can enhance their competitiveness in other grocery stores. Depending on the customer’s shopping habits, it will display relevant items that you may like, which will increase the likelihood of impulse purchases. However, I can’t deduce whether such devices in retail stores are better than pure e-commerce grocery options. As digital technology continues to evolve, predictive analysis of customer databases will not be a problem. Amazon’s display of “What you might like” on the site also allows people to buy unplanned products. To go beyond them, I think it would be great if they could develop a system that would display a shopping list and remind me that the products I bought before have discounts now. In addition, menu options or healthier substitutes will increase the profitability of grocery chains, as more and more people care about their health and they will still buy organic foods although they are expensive.
Personally, I don’t think there is strong correlation between customers who prefer physical stores and customers who prefer online shopping. The main reason for those customers choosing online grocery shopping is perhaps they so busy that they don’t have time to physically be in the store or they may try to avoid long-waiting line. Therefore, with the smart senor in place, Kroger can’t change those obstacles that hinder those online shoppers from going to physical stores. Therefore, I don’t think the smart senor will increase Kroger competitiveness, compared to E-shopping. However, as far as impulsive buying goes, I agree that the smart senor would increase in-store customers impulsive buying. Smart senor would show many information, some of which would remind in-store customers of buying something originally not on their shopping lists. In addition, I agree that the smart senor will increase profitability of grocery chains. The smart senor can elevate in-store shoppers’ shopping experience by increasing in-store shoppers’ satisfaction. (providing alternative to some products that customers want but can’t get for some reasons or improve their health awareness). However, there is a main draw back for this implementation. Now, the smart senor doesn’t have functions that will send alert if customers change their mind and put products back on the wrong shelf. The wrong placement will confuse the smart senor. Therefore, traditional shelf-checking is inevitable.
Actually, nowadays Alibaba Group Holdings Ltd, is advocating New Retail, which is a term that roughly indicates a combination of the best in physical and online retail. What Alibaba is doing is trying to make the distinction between physical and virtual commerce obsolete.
New Retail uses the integration between online and offline, leverages consumer data in order to integrate offline stores, merchandise, logistics and payment tools to deliver a better overall shopping experience. It restructure the whole business, including production process, shopping experience and the relationship between business and consumers.
If the technology of geolocation, facial recognition and big data–driven customer management systems have been improved, this New Retail might be a powerful business model.
Just take clothes sale as an example, traditionally customers have to go to the physical store to try if the clothes fit or not. However, online shopping can not guarantee the customers won’t ask to get a refund. With the combination of online and offline, this solve the existing problem.
However, this business model still need to improve and develop, I believe with enough time, New Retail will be highly recognized and widely used.
The strategy of personalizing the customer experience through the sensors and app store is good but just for giving additional service to regular shoppers. I don’t think the strategy will attract online shoppers since it doesn’t tackle the strength of online shopping which is convenience. The interactive grocery store concept is innovative and helps Kroger to be proactive against Amazon and its ambitions over the physical grocery market, as there is always a demand for physical stores.
Kroger interactive strategy has other goals like capture customer data. Here I think there is a big gain for the supermarket chain, as it could use the information provided by shoppers to make better supply chain decisions.
Most of the consumers when buying vegetables and fruits prefer to buy them from the local stores due to food quality and freshness. Therefore, adding sensors to grocery stores will definitely increase their competitiveness to pure eCommerce grocery option. In addition, as additional information will be displayed regarding the ingredients, consumers will much more tend to buy the fruits and vegetables from the local stores. Also, as consumers visit the stores for buying grocery they are likely to explore other vegetables and fruits that are present in the stores, and this in turn will increase the profitability of the firm, and increase the impulse buying. Also, the buying pattern of the consumers will help the retailers for better demand planning, category planning for all the products.
The additional sensors can provide more information to customers, but we don’t know how does the extra information influence customer’s choice. Does extra information give customers more confidence to buy more product or confuses them to make choice. For me, even if I know the ingredients of product, I still can’t make a choice easily because I don’t know the flavor and taste.
I don’t think those device will increase possibility of impulse buys because if people know more about the product, they will make a choice carefully. People will not spend lots of time on shopping at grocery store and they will be confused by those devices and extra information.
Yes, new option or substitutes of customized healthier would increase customer’s satisfaction because when information technology become more and more popular, customized product will be a new trend. Company which can provide a customized service with a lower price will be the winner in the future.
Deploying sensors is an interesting behavior . Merchants can enhance the impact on this move through marketing behavior , which will bring more profits . However , what follows is whether this will really bring more profits . In addition to sensor and installation costs , maintenance costs and training costs also need to be included in the calculation . Conversely , using this sensor also brings some advantages . For example , if the sensor is connected to stock , the MRP system can be used for inventory management and ordering .
When it comes to e-commerce grocery market, I don’t believe that making the brick and mortar stores automated or more attractive with sensors and other things is going to help increase their competitive edge over e-commerce grocery options. The USP of e-commerce grocery options is that they give the convenience of delivering grocery to your door, which otherwise seems like a task when it comes to going out and buying from a retail grocery store. However, with such sensors and interactive stores, Kroger can improve it’s sales with proper marketing strategies. It can increase impulse buys when the interactive LCD displays various other products that the shopper can use with those on it’s list. All it will require is efficient coding of the machines to demonstrate other products which are healthy and on which the grocery store has a higher margin to the customers and they can leverage the advanced technology to make higher profits.
The interaction with screens leading to suggestion of ‘alternate’ or ‘healthier’ suggestion in stores can lead to greater heterogeneity in the cart. This could drive revenues up. However, this should not come in the way of impulse buys. Various other innovations such as RFID sensors to gauge where customers spend the most time within the store are better equipped to organize the store better to encourage sales and impulse buys. Another disadvantage of the sensors at Kroger could be that the additional pieces of information provided by the sensors cause decision paralysis for the customer leading to lost sales. This new technology which could positively affect the shopping experience if implemented properly, however, it will not be the deciding factor in drawing customers away from ecommerce and to brick-mortar stores.
By using LCD screens on aisles that can interact with customers’ shopping lists, the devices permit additional information being displayed to customers regarding ingredients through the Kroger mobile app. I think the devices will increase their competitiveness relative to pure ecommerce grocery options, and to increase the possibility of impulse buys. For example, in Sam’s club, in order to gain the purchasing rate for the fresh food, their marketing department will send some additional information like how to cook with the products depending on what you would buy to the specific group of customers. With the easy learning steps of cooking, it truly attracts the customers and increases the revenue.
Customers come to the grocery store with a shopping list prepared, a new customer will go around the store looking for items whereas a customer who is used to the store and has been coming to the same store will know in which all items are his items kept.
Does that mean, a customer who is used to the store will not buy items on impulse?
Wallmart has an app, in which one can type in all the items and one will get to know where exactly are the items kept. This helps in customer navigating across their store. This also removes the thought of someone wasting their time in a very large store looking for a few items, hence why some customer may even prefer small grocery store (like 7-11) which stocks items as per their needs than going to a big store such as Wallmart or Target.
Kroger’s sensors and LCD information can help the customers form a map to the items they require. This information will help the store owners know what all items do their customers look for (and what are the alternates they can or would buy). Thereby, ensuring that the customers keep coming back because not only the store owns the main ingredients but can suggest alternatives as well.
Then comes the biggest game-changer of all, how to increase impulse buying. The strategy it to curate the store and items on the shelf in such a fashion, that the customers are exposed to a variety of items. If the store can analyze the data, they can perfect their planograms and where all the items are kept, so that majority of their customers have to roam the entire store, thereby getting exposed to all the varieties and impulses to buy them, while at the same time feeling that they are in control.
Helping customers does not negatively impact the business. It ensures repeat business and with accurate data, one can do wonders.
Solutions like these targets the aspirational consumer. With the contemporary times, the consumers have driven towards e-commerce and facilities due the enablement of getting the product sitting at home, hence saving time and effort, whereby also getting better prices owning to saving on margins by e-commerce by being e-commerce. Though it is tough to predict the movement in future the best bet could on the fact that distance of a store or point of access of these stores from the consumer will play an important part. It is also important to note that these features are already available over an online shopping experience.
Though, shopping experiences that requires tangible experience like jewellery shopping or buying clothes will definitely be a better experience, and the potential for these technologies lies there.
Impulse buying is something that is in some way bound to be accelerated as when the product is better defined and explained, it increases the probability of it matching consumers wish list. And as the devices can interact with ones shopping list, it can be done strategically.
For the last part, yes! One of the important trends in the FMCG and food and staples market nowadays are the awareness of what’s inside. Apart from the fact that transparency promotes complaince which inturn triggers bias/preference, a customize pricing can save more for customer and earn for groceries retailer equally by optimizing the whole situation well.
People prefer eCommerce because they get to see a variety of options sitting at home and getting it delivered. The brick and mortar stores allow the customer to buy the item without waiting. The addition of sensors in-store would work both ways, it will make the buying experience fancy, but will also complicate buying and make it more time-consuming. The ingredient display would be helpful for giving knowledge on the allergens. And based on the age of the customer this system could work positively for some and ignore by others. Thus success depends on the features, kind of information and ease of use of the system. Grocery is usually preferred my majority in brick and mortar stores, and this system can improve the competitiveness if the features are actually useful and give the correct information and suggestion. This system can also definitely increase the impulse buying if it’s tracking what the customer is browsing and has on the shopping list and suggest him/her options and price cuts on those items. The system can help the customer suggesting options which are healthy and also track the overall balance of diet/nutrients from things they are buying and make a suggestion to complete missing groceries or food items for a balanced diet, and this can lead to acceptance of the system, especially health-conscious people and people on diet.
It is interesting to bring sensors deployment in grocery stores and pure e-commerce into comparison. Though somewhat similar, they both track customers shopping behavior by utilizing technology, they are completely different two concept. I don’t think that this can improve grocery’s competitiveness score with regards to the convenience level that online shopping can provide. However, it does improve the performance of grocery itself if we compare that vertically in terms of timeframe. As for impulse buys, as long as the retailers can capture the consumers’ shopping behaviors, it is easy for them to create a “WoW” moment for impulse buys. A simple example is foretaste in most of the grocery stores. Education for consumers about new products and healthier options simply seem advertisements to me. Yes, if this kind of education make sense to consumers, it definitely will increase profitability for grocery chains because in this way, demand is improved, thus, affecting the whole chain’s behavior.
Grocery shopping is one of those chores that you want to be at a store for and most times it is one that you want to get done quickly but efficiently. I for one am not a fan of buying groceries online. This technology of providing buyers with the opportunity to look at options and specifically find what they’re looking for is a big part of providing them the ‘omnichannel’ experience. I want to go physically look at the items but also having technology save me time of finding exactly the specifications I am looking for considering the variety out there – definitely a win-win.
I shop by the list, so I am not sure how this would affect impulsive buying but maybe having access to deals and discounts on your mobile would increase the chances of customers buying impulsively. Also, an app makes it easier to compare prices which might increase this behavior.
In my opinion, this sharing of more information can greatly help understand and meet customer demand more efficiently thus increasing the overall efficiency of these supply chains and increase profitability.
In Grocery sectors, any technological advancements that increase the ease of usage/ selection of items for customers will increase the competitiveness of the store. Especially in the brick and mortar store, the introduction of sensors that helps customers find their required products saves a lot of time for the customers and enhances their experience.
These sensors give additional details to the customer, regarding ingredients can help customers become aware of what they are eating and can recommend healthier alternatives or organic products which might have customized prices and can be expensive.
It might increase the possibility of impulse buying, as these sensors might suggest various other products, based on your cart’s nutritional values to give a balanced diet which might not be in the customer’s shopping list.
There are other ways of using these sensors to increase overall long term profits and branding. For example, the “Scan, buy and go” program by Kroger in payless gives total bill as you scan and put the items in the cart rather than at the end during the billing. This helps customers to see the total price then and there and shop decisively and thus retaining customers by decreasing their impulse buying.
Yes, additional sensors can increase their competitiveness as compared to their peer brick and mortar stores, but I don’t think they can compete with the e-commerce market or attract online shoppers. For online shoppers, the top priority is convenience. They want to be able to select the products in the comfort of their homes and want to get stuff delivered at their door. Thus, these sensors will do little to attract this segment. However, this technology will help by increasing impulse buys at the store. People are getting more health conscious in general. These sensors will help buyers choose their products better. They will also be able to compare the products in terms of nutritional value, which will be a better customer experience. Education regarding novel menu options or substitutes that are healthier or customized pricing will thus increase profitability for grocery chains. The chains will also be able to track customer data to see shopping trends and most sought of out products. These apps will also help the stores to suggest products to customers by tracking their shopping history, which in turn will be a form of advertisement for the new products and help with product sales.
Installing sensors in grocery stores may increase the sales since digital screens can prompt bundling goods and meal ideas to achieve economies of scale that will influence the customer. When comparing with online retail stores, the primary area of interest for the customer is ordering from a place of their convenience and having all the details readily available to them. Sensors installed in grocery stores may not increase their competitiveness with reference to e-commerce grocery options, but may certainly increase their sales.
Impulse buys are bought with limited information available to the user and within a quick span of time, having more information displayed may result in the user spending much more time with the screens and could result in uncertainty regarding the purchase.
This is essentially a case of omni-channel experience. These days retailers are stressing upon the importance of providing customers with e-commerce like shopping experience in brick and mortar stores. The whole idea of this is to improve the competitiveness of these stores in comparison to websites and shopping apps. This will no doubt that this will increase impulse buying like it happens on shopping sites and apps. The added information provided to customers about substitutes, pricing and ingredients has the potential to drive profitability by retaining more customers through the delightful experience. Additionally, to drive the profitability, the better substitutes must be priced higher.
The sensors are definitely an advantage for Kroger in this smartphone generation. By downloading the app on cellphones, customers can readily access information regarding the grocery in Kroger. Indeed, this is a good way to attract customers for grocery shopping in Kroger. However, when comparing to pure eCommerce stores, it is still not enough. The pure eCommerce stores allow customers to shop online, and even order online. They don’t even have to go out! Furthermore, all the nutritional facts and ingredient information are available on the website.
For increasing the possibility of impulse buys, most customers shopping in the brick and mortar stores are sure about what they want when they are in the stores, they already have their own lists, therefore, it is not really helpful compares to other promotions like discounts, buy one get on free…..
However, as for the success of a grocery store, the business should think about developing both eCommerce and equipping sensors in the stores, taking care of both sides customers. This helps the business to increase profitability.
In my opinion, using these sensors with LCD screen won’t help Kroger at all, at it will hurt Kroger’s merchandising.
First, for grocery industry, e-commerce can never replace brick and mortar stores. Customers who wants to see whether the vegetables are fresh will go to brick and mortar markets as usual, customers who want to enjoy convenience will not stop choosing e-commerce because of those sensors and screens.
Second, the sensors will interact with shopper’s shopping list is a good idea. Kroger can study their customers’ behaviors. However, displaying information on LCD is not a good idea. Supermarkets don’t want to see that all customers are able to finish their shopping list quickly. They want to see customers walk slowly and searching for what they want, meanwhile, grabbing stuff that they don’t plan to buy. If screens tell customers the exact locations of their shopping list, customers won’t buy anything else.
Customers shopping in brick and mortar stores may not place the items they plan to buy in-store into their shopping cart in Kroger app when they shop in store result in difficulty of the sensor sensoring what’s in the customer’s shopping list to customize the display content onto a nearby LCD screen, however if a Kroger online shopper happen to visit the store could then have the shopping list in app be detected by in-store sensors may be impulse to buy what they have originally planned to buy online. Hence Kroger brick and mortar store may just be completing with its own online store. Education regarding novel menu options or substitutes or customized pricing may both increase profitability of grocery chain depending on what product item it is utilized in. I.e. Fresh produces that needs more complex processing after purchase would give shopper a headache of what to do with it after purchase, in that sense novel menu option may be an ideal impulsive strategy. As for generic products, it would be more ideal to attract customers with customized price discounts.
I think there is a lot of hype in this arena because they want a lot of hype. It is hard to compete with with a. Completely e-commerce world. They need to techify their stores and build up hype. I think it may increase sales a little, but not enough to justify the cost. I feel like it will be a bust. Local Kroger stores offer scanners that you can take around the store so that you can scan as you go. Sounds like a great idea and time saver, but does anyone use them? The answer is no, they still shop the way they always have. I think breaking the status quo will be difficult without a need.
The e-commerce integrated with the brick store never be brand new news in the industrial. Not only the Kroger, but other groups who were sunning the grocery store are trying to use the downloaded app and promotions to get to know their customers better.
The intention is very clear, those detailed data could be an important reference when the retailer trying to group their target people and do some high-effective promotions. As we all know, the character of grocery refill is highly regular and repeated, which means that the retailer can gain a steady demand comparing with other industrials meanwhile the habits of customers are difficult to change.
In my perspective, the application of the sensor and mobile app could be a good attempt to make the connection of customers and store more firmly, but I don’t really think that will be a good method to increase the revenue through the related recommendation.
Customers prefer e-commerce options primarily to save the effort of visiting a store personally and to return an item with ease. With the brick and mortar stores deploying sensors that interact with the customers’ shopping lists through LCD screens, the customer is able to make more informed decisions about the items that he/she buys and therefore the shopping experience for the customer definitely improves. However, the technology does not reduce the effort the customer has to make for buying grocery from the stores. Thus, the stores don’t necessarily become a better option and increase their competitiveness relative to pure e-commerce grocery chains.
I don’t think Kroger will become more competitive by simply implement sensors, tables in practical stores considering the differences of ecommerce and customers experience. Currently ecommerce shopping still shows its greatest advantage, lower operating cost and better data analysis. By processing the transaction data, ecommerce manager can guaranteed the up-to-date analysis result with lower cost of data accumulation. On the other hand, how those assistant devices fit in the current purchasing process still remains unknown, thus customers experience won’t expected to increase until a better process of shopping is discovered.
I believe deploying sensors in brick and mortar stores would not increase the competitiveness relative to pure ecommerce grocery options because these two shopping channels target different customers. For ecommerce grocery, its main target customers are the people who are looking for convenience and time saving. These customers can easily get the products they want by clicking the mouse. However, setting up sensors in a brick and mortar store would not provide customers the similar convenience. In addition, the sensors would decrease the possibility of impulse buys. If customers know where the products located, the time they spend in store would be lower. In other words, the possibility that customers purchase additional products would be decrease. Therefore, I do not recommend Kroger to use the sensors.
This tool would help customers in making their decisions about buying the product, it is in a way a marketing technique. But at the same time this tool would be ineffective on the loyal customers. Its very subjective to claim that it would be directly competing with the Amazon, because it will be impacting the sales of manufacturer. Major portion of customers purchase belong to the regular goods and hence once customers see the information on the app they can anytime change the way they buy that product.
These additional sensors will increase the competitiveness against the big e-commerce sites. With more information available, the customer will choose suitable products, resulting in increased customer satisfaction. Alternatives will increase the impulse consumption of customers. Ordinary customers have already considered what kind of products they need to buy before entering the store, but if alternatives appear they will buy more or even new products, increasing the profitability of the store.
These devices many not increase the possibility of impulse buys. If I am shopping in a market, I would enjoy checking products shelf by shelf, touching products that I want to buy physically. If I want to shop on a screen or even just check information on a screen, I would like to do that at home without spending time and effort to go to the market and take heavy products back to home. Nevertheless, these devices would bring benefit to Kroger, since they could collect data about customers’ information regarding to their preference and shopping habits, etc. This information would help them to do better promotion in the future.
In modern times, an average customer looks for either instant gratification, provided by the brick and mortar stores, or ease of access, which is possible through e-commerce. Utilizing sensors, to make the buying experience more interactive, could help maximize the potential that a customer holds. The interactive display could be programmed to suggest “Things you may like” to customers who have a certain selection of ingredients in their shopping lists, leading to increase in impulse buys. The app can contribute to this process as well by suggesting healthy alternatives to the products on the list. Dynamic pricing based on the customers previous buys can further cause impulse buys leading to higher profitability.
All this comes with a risk though, a risk of decision paralysis, which has been rightly stated by my peer Lakshman in his evaluation above. Too many options has been known to be the cause of many customers just avoiding the purchase altogether. Therefore, a balance needs to be struck, which is what Kroger should focus on to improve it’s competitiveness with the e-commerce grocery chains.
In the wake of competition from eCommerce players such as Amazon, the onus lies with the brick and mortar stores to personalise the customer’s experience in addition to providing the traditional ‘touch and feel’ experience. In such a pursuit, sensors can play a key role in providing additional information that the customer might be wanting regarding a certain product thereby enhancing his or her shopping experience.
Sensors combined with the power of analytics can be used to collect data regarding the shopping patterns and behaviours of a certain customer. Such historical information can be utilised to offer custom deals, thereby increasing profitability of the grocery store and also improving the impulse buys. However, it is easier and cost effective to install and maintain sensors in a relatively smaller store when compared to a larger grocery store (such as Walmart), where disruptions can be caused due to interference or mismanagement, resulting in loss of data.
The advanced interaction between grocery stores applications and consumer mobile can be a plus point for increasing sales by flashing customer customer with promotions on the spot, better alternatives and by trying to emulate a one stop shop solution but the real value of e-commerce shopping is the facility of ordering online at the comfort of your home, at the time and location of one’s chosing. Unless that is replicated in brick and mortar store, they will not be competing as equals.
Ecommerce is the option for most consumers when convenience is involved, consumers who do not wish to spend time and energy shopping physically utilize it. Even if Kroger provides the new system with added information and interaction, it is unlikely to have a significant impact on Its ability to combat e-commerce alternatives. The additional information would also work against the concept of impulse buys, Impulse buys are not premeditated decisions and thus are done when the consumer is physically interacting with the various options available without much research or information. With the new system, the shopping process becomes more streamlined and focused,the consumer is basically being encouraged to be more efficient and thus would spend less time browsing, which would lower the probability of impulse buying.
Attracting a consumer & making them buy the thing for which they are not in a grocery store mainly, impulse buy is one of the backbones for grocery industry. Sensors will eliminate the chance to roam grocery store aisles or stare at snacks in the checkout line if consumer will get limited to shopping list only. This will definitely affect the overall sales.
On the other hand, interactive sensors can be designed to provide similar option to consumer for purchase. This will help impulse buy, as instead of roaming, consumer will get all similar product information handy.But this will just mimic the online shopping made in store.
Also, for the impulse buy, consumer generally overlook the information, But providing additional information to consumer will give additional time for them to think over. This will again affect impulse buying. As most of the impulse buying are instant & consumer spend little time thinking over it.
The new interactive process will get consumer to focus more on app instead of simply roaming around & picking the items.
In the grocery industry the share of e-commerce is very minute, since implementation of this is very arduous (but promising!). Implementing tech as suggested in the article helps retail chain like Kroger and Walmart compete with the likes of Amazon Go that has already been implemented in Seattle. Kroger planning to provide customers suggestions for purchases that may not be on their shopping list is an excellent idea, as it may show other(cheaper or healthier) variants of the same kind of product, offers and discounts on products that may not be on the customers list, which could trigger the customer to make impulse buys. In addition, information regarding the purchases that the customer makes and how a customer traverses through the store could prove useful to understand the customer better to provide suggestions tailored to each customer. All this could influence the customer more to make impulsive purchases thus increasing revenue and hence the profitability of the grocery chains. However, they have a downside as well – just like with pop-up ads, the customer could be bombarded with a lot of suggestions instead of prompting the customer to make purchases. This could have severe negative effects, where the customer decides to not buy the product at all or it may even make the customers consider shopping elsewhere as the control over their shopping experience is taken away.
It is difficult to determine whether or not this will increase competitiveness, but that is also why it makes sense for Kroger to perform a trial run of this technology. This technology alone may not be enough to increase competitiveness vs. ecommerce grocery stores, but in conjunction with online ordering, pickup, and quick delivery, this could send a strong signal to customers that Kroger is dedicated to meeting their evolving needs. This technology has the potential to ease some of the pain points that customers experience at grocery stores. Personally, one of the biggest stressors for me is when I am unable to find a product in the store. If this technology can ease this and other customer pain points then customers may be less inclined to leave for competitors.
Customized recommendations could lead to incremental revenue for Kroger. For example, if someone is purchasing their normal items and is shown a recipe they can make if they only add a few more ingredients, this could lead to impulse purchases. This could direct customers to niche products that have higher margins than staples like milk and eggs. Similarly, if customers are shown healthy alternatives this may direct them to higher margin products. Finally, while not excusive to retail, personalized pricing and coupons could also entice customers to spend more time at Kroger or to make impulse purchases.
At this moment, it is unclear to say that if the integration of sensors in Kroger grocery stores can help them immediately gain extra competitiveness in comparison to others ecommerce grocery. Since the target group and customers are different. Especially for those online customers, they prefer everything come with convenience. Like they like fast selecting, fast checking out and fast shipping. Those customers are hard to be attracted by those sensors. Those sensors indeed can create more conveniences in the physically shopping by giving more direct information and content and better guide the customers to shop. However, the sensor itself is not good enough to bring more competitiveness. What Kroger can do is to further develop own system that includes online ordering, tracking, and guiding features. By using this system, it might can help more people to shop in an easier way and have better controls over the whole process. As for the impulse purchasing, I think by using the customized recommendation can help Kroger increase the sales. For example, tracking the specific needs for each customer can help Kroger to draw a better picture of each of them. In this way, more related items can be recommended and sold. Double win situation can be achieved.
Using sensors in brick and mortar stores could help increase their competitiveness relative to pure ecommerce grocery stores because grocery shopping would become more of an experience where you get product offering tailored to you and special pricing on those items. Currently, grocery shopping is seen as a nuisance to many people, but if their perception changed to seeing it as an experience based off of this technology then it would increase the competitiveness of brick and mortar grocery stores to purely ecommerce ones. Using such devices would certainly increase the possibility of impulse buys. In traditional grocery shopping, you don’t have anything recommending products to you while you are in the store, but with the sensors Kroger could offer suggestions based on dietary restrictions or preferences. For instance, Kroger could show gluten free nutrition bars to somebody with a gluten allergy and convince them to purchase something that they never knew was gluten free because they never took the time to look at the item that closely. It has been proven that eating a healthier diet is more expensive then eating one full of processed foods. Therefore, the education of a healthier diet to customers and offering potential substitutes would help increase profitability of grocery store chains if a lot of consumers buy-in to using the technology while shopping.
This article written in 2017 illustrated that how the grocery store tried to provide the customer another kind of shopping experience by mean of technology. However, in recently, 2020, it seems to be a common phenomenon in the grocery store. Each store develops its app providing the customer not only products info or promotion event but even integrating with the paying system. I think the customers who would like to go to brick and mortar store are looking for shopping experience allowing them to touch and watch the physical products. With the app, the store can provide better service and build up the customers’ loyalty to the store. Therefore, I still think it is a good idea.
Before COVID-19 pandemic, having additional sensors in brick and mortar stores increase the competitiveness relative to pure ecommerce grocery options. Traditionally, customers still like to see the products physically and enjoying the shopping experience in the store. Moreover, in this new normal, customers will go to the physical store more frequently as they all spend more time at home. Thus, additional censors will help due to the volume increase in the supermarkets. Those devices can increase the possibility of impulse buys, the sensors can provide more useful consumer behavior data to the analysis thus generate more accurate results for impulse purchases. Education regarding novel menu options or substitutes that are healthier or customized pricing can potentially increase profitability for grocery chains. If the pricing is customized to customers, it usually generates more profit and customers are willing to purchase more. Healthier products like organic foods generally have more margin than the regular ones.
In my opinion, the introduction of such technologies can help to draw the customer attention, passing through a shopping mall, only to possible substitutions. Therefore, these technologies will not be able to fully increase the competitiveness of conventional stores in comparison with e-commerce.
However, mobile phones could draw the attention of customers to promotional products so that the latter would make impulse purchases. Although, the article lacks the facts that new technologies are more effective than the good old ways of advertising.
With the help of customer interaction technology, of course, you can draw customers’ attention to better analogues. And as a result, the company could make more money on more profitable products.
I believe, influencing customers through their personal mobile devices is an ethical issue. Whether or not the sensors that enable interaction with customers are effective is a big question. How will clients react to this kind of impact? Will they rush to buy more lucrative substitutes for the company, or will they leave the phones in the car? Judging by the fact that after three years we did not see these sensors, the experiment was unsuccessful, or it took additional time to develop the idea.
With e-commerce developing rapidly, traditional brick and mortar stores need to find out new ways to attract more customers- not only the quantity but the time people would like to spend once they walk into the store. It’s interesting that people may browse Amazon App when they have nothing to do. But when people go to the store, they mostly just find products on the shopping list, fill the cart, pay, and go. Since stores such as Walmart and Kroger are so huge, people don’t always want to spend much time walking around. In fact, brick and mortar stores always have the advantage of “real”-you’ll know whether fresh goods are truly fresh and whether the T-shirt fits you well. With the help of sensors, shopping becomes more interactive and people may want to have a look at something they didn’t want to buy before going to the store. However, in order to increase competitiveness, stores need to use a comprehensive and systematic database to analyze what products may different ages customers want to buy without arising their resistance. Also, some functions such as “Scan, Bag, Go” still need time to test before taking into large scale operation. When shopping online on Amazon.com, we can always see the recommendation for those “long tail” products in a bundle with the initial product. Similar but different, customers in the store may be pulled to those products, but people may be more rational since products are “touchable”. Those substitutes with additional value clearly have high margins. With the use of new technology, it’s a way to remind or stimulate more people to consider these healthier or customized products such as organic vegetables, different flavors of fresh sushi, etc. Once reach considerable demand, profitability will increase greatly.
I don’t believe these additional sensors can significantly increase stores’ competitiveness comparing to pure e-commerce options. E-commerce options can provide customers with information with much more detailed information and it is not an essential feature of walk-in stores.
Such sensors can be fixed to detect other information such as the average time customers spend in a section, average number of customer in a group and correlated trending item etc. It can help the store understand drivers for customer purchases.
Such education can help stores in the short run. However, I believe that the choice of daily nutrient intake does not only depend on an individuals education but also with his/her economic status. It is very expensive to eat healthy.
Although this article was written a few years ago, I believe that the implementation of interactive grocery shelves today would still be beneficial to Kroger to increase their competitiveness in today’s ecommerce market. This unique experience within the store would provide a competitive advantage for Kroger because there is no other experience similar across competitors. Store customers will be able to shop instantly without having to checkout at the very end. This will increase the chances of the customers making impulse buys. An impulse buy is when a customer buys a product when they did not plan to before going to the store. With the new technology that Kroger will be providing to its customers ingredients are suggested to them based on what they have purchased already. You can see how these new items being displayed on the screens will increase the likelihood of impulse decisions by the customers. If an organization can coordinate how to promote their healthier options or customized pricing, I believe it will improve the profitability of the supply chain. This is a market that is waiting for a grocery store chain to take advantage of the opportunities available. People want to know that they are making the right decisions on their food consumption and that there is not a better alternative. If this information was made available to the customers and Kroger implements the interactive grocery shelves, this will result in a higher profitability for the organization.
If I remember correctly, this technology has been used in the Payless on Sagamore Parkway for a few years. As far as I know, neither I nor my friends have used this technology in the past years. As I observed in the Payless grocery store, I assume most customers are not quite used to using this device. Compared to pure eCommerce, eCommerce has a significant advantage which is all the ingredients, use suggestions, warning, and benefits are listed under the description of products. It would be more efficient for customers to go through all the descriptions online instead of going to a local store and read them on a small device. Personally, I go to the grocery store to buy something only because I really need it, so my behavior is very rational, and I don’t really want to browse around for an hour. Otherwise, I would go online shopping instead. Therefore, I would say these devices do not increase the possibility of impulse buys, at least there is no impact on me.
Consumers prefer healthy food products because of their concerns regarding health. The increasing number of healthier product consumers would increase the profitability of grocery stores. Healthy novel menu options or substitutes are always associated with good lifestyles, stores like Walmart have already increased the variety of organic food products in the past years. So this decision could both improved their image and generated profits.
I believe that humans in general like to find habits (comfort zone), We usually find a group of things that we frequently buy and as we can be overwhelmed by the 30-40K SKU’s per grocery store, it is difficult to add new things. Having This kind of sensors and technology can help people to picture different ideas on how to compliment the products they already have or are looking for and can be a new way to introduce ideas into the customer minds.
I don’t think that these technologies by their own will drive competitiveness unless after understanding particular user habits, tailored promotions are made for the customers. The combination of both could drive increased revenues for the grocery stores while having better deals for the customers.
Companies like Catalina Marketing have found a business opportunity improving the third “C”, Coordination. They tailor promotion analyzing consumption habits, creating opportunities for both the customer and grocery stores to maximize their profits (Marginal Value for Customer is greater than their marginal cost when they see the promotion).
I believe the idea of sensors in aisles is still relatively new and more creative ways have to be developed to generate competitive advantage. Only then, they will enable increased impulse buying. Even before the pandemic, online grocery shopping was a small part of sales, but it will be interesting to see how a post-pandemic world behaves regarding online shopping to assess whether it is more convenient to invest in online shopping or modifications to brick and mortar stores.
Diego Palacios
By bringing new technology in stores and increase shopper experience, sensors will help to make Kroger more competitive and also more appealing to customers. Indeed, people use e commerce platform to shop because it is very efficient. Indeed, you don’t have to commute to the store which is a time saver.
Because of the apps that complement those sensors, recommendations can be made to buyers. Indeed, Kruger will have access to more personal data and will be able to cuilt a customized profile for its customers which will permit to create personalized recommendations to them and therefore drives impulse buys. Profitability of the company has good chance the grow.
I am pretty sure I have seen these devices at certain grocery stores and I rarely see any in use. This might have been a more relevant investment in years past, but with the start of online grocery shopping it seems to be less advantageous. I suspect that if someone wanted the utmost convenience with will just shop online as opposed to carrying this little device around the store with them. E-grocery shopping would likely influence more impulse buys than the mobile device. In my opinion, the device is an inconvenience while e-shopping is a major convenience.
I think the main advantage of offline physical grocery stores is that they allow customers to see and touch the products with their own eyes, thereby increasing the shopping impulse. But I think based on the characteristics of grocery stores, most consumers actually prepare shopping lists according to their needs before going, and don’t want to spend too much time in the store. In this case, the final purchase of the customer usually does not differ much from what he planned. Reading the detailed information about the product will inevitably take up customers’ time and increase the burden. Factors that attract grocery shoppers to change their spending habits are often due to discounts on alternatives or novel, attractive packaging. Although I believe the introduction of sensors is a very positive attempt, the actual effect may be difficult to achieve expectations.
Implementing sensors and wireless devices to help in-store customers enhance their shopping experience would only attract shoppers who like to buy in brick and mortar stores. Such a technology won’t have any effect on online buyers because they order online to save time and it is more convenient for them.
Such devices might trigger the impulse buys because of the wireless connectivity, the store might already know what customers are looking for and give them additional discount e-coupons, which might lure shoppers to buy more items or quantity than required.
Something is better than nothing. With the knowledge of novel options or healthier substitutes, customers will at least consider buying them, which might increase profitability for grocery chains. Customized pricing would also increase the profitability for stores as the discussed sensors could inform shoppers what items are likely to give more savings if bought in bundled quantity.
I believe the sensors might not increase the competitiveness of the brick and mortar stores relative to the eCommerce options solely because of the very reason consumers choose the eCommerce option in the first place, the convenience and ease of shopping. The eCommerce consumers are predominantly those segments that don’t want to invest time and effort into visiting stores. The sensors won’t ease the experience on those terms and hence won’t be more promising than the eCommerce option.
However, I do believe that the implementation of sensors could enhance the profitability of stores within its existing consumer base. The most critical thing here would be the data collected on consumer purchases. This would help the retail stores to segment their customers based on consumer values. For example, one segment of customers might value healthy options over cost. So for this segment, the stores can leverage showing product recommendations of healthier products that have higher margins, and hence more profits. Likewise, stores can leverage customized strategies for each segment of customers to increase profits. But an important consideration here would be to analyze how much profit this initiative can bring in relative to the cost of the implementation. If the project is able to bring in a positive NPV, then it should be a great investment for retail stores.
The digital shelf system, called EDGE which came out in 2018, has replaced the traditional paper price tags and displays prices through digital shelves. This method of price display not only allows supermarkets to change prices in real time, but can also display promotional discounts and detailed information on food products. In addition to the EDGE shelf, the system also includes a brand-new shopping guide service, customized personalized advertisements for users, and introduced a function called “pick-to-light”. As part of the Kroger supermarket aisle pick-up service, this “light selection” function can also light up the shelves and help employees find the goods they need to find. In theory, this kind of pick-up service can speed up employees’ pick-up speed and ensure that goods can be delivered to the outside faster. From this point of view, the smart shelf launched by Microsoft and Kroger is not only for the sake of customers, but also for supermarket employees to improve work efficiency. Furthermore, this new system would contribute to the generation and collection of a large number of products and customer data. Microsoft’s Azure platform will be responsible for the storage and processing of all back-end data. At the same time, Kroger Supermarket can also use this rich data to advertise specific needs of customers when they visit the supermarket. In addition to creating a more complex and detailed shopping experience, the plan will also create additional data revenue streams.
As we can see from the article, installing these additional sensors in bricks-and-mortar stores will improve their competitiveness over purely e-commerce grocery options. These sensors bring consumers an automated and personalized shopping experience that can help save customers time, thus increasing customer loyalty and increasing the competitiveness of brick-and-mortar stores.
Digital shelves can attract customers’ attention to relevant products. And by recommending products that customers may like, they can satisfy customers’ potential needs and stimulate them to buy products that are not on the shopping list, thus increasing the possibility of impulse buys.
I think these will help increase the profitability of grocery chains. New options, healthier alternatives, and customized prices are a big draw for customers. Although there is still room for improvement in technology(For example, because of the occasional error in the code scanning at the self-checkout, at least one employee must be on call all day. Thus, a brick-and-mortar store without a cashier is currently not possible.). In the long run, they can help boost grocery chains’ profitability.
This kind of additional sensors help customers make decisions. By providing related products from suggested recipes, it will lead customers to buy something they did not intend to buy. I think it is a good way to increase the possibility of impulse buys. While, the devices only available on Kroger App which the platform is too narrow. If customers could reach the information easier, it will be a competitive advantage. Also, the novel menu is a way to educate customers to purchase. Also, from the interactive shelves, the stores also can expect the future demand of the product which reduce inventory cost as well as the logistics cost. In another word, the product margin will increase, and the grocery chains will be profitable.
It is still unclear to decide whether such technology implementation will improve Kroger’s competitiveness, but it is the right step to test out any new idea before rolling it out across all grocery stores. Customized recommendations can attract customers to the right product and the store may develop a stronger relationship with its customers. Targeted advertising may also help customers look for healthier products and help in increasing revenue for the store and specific product categories, especially in ecommerce operations. But this may also reduce impulse buying as customers would spend less time in the grocery store, therefore, I think it is a step in the right direction as grocery stores can now analyze its effectiveness in its testing phase
Adding sensors in the store may increase their competitiveness to some degree, but I’m afraid that the outcome may not be as well as they thought to be. One big reason for this is that people choose Kroger other than Walmart or online shopping not because of those sensors and functions in the app. They go to the store based on the products they need to buy, the discounts they can get or the distance between them and the store. Although those sensors provide good experience for people in the store, they are not the determinative factors for people to choose this store, at least not with the functions they mentioned. However, it may increase profits in another way-impulse buys. Just like the snacks beside the cashier desk, customers may intend to buy more things when they are given choices. With those screens showing other information, like novel menu options or substitutes that are healthier or customized pricing, customers may want to have a try and buy more in result.
The implement of those sensors and screens will increase the customers’ desire to buy more products. When shopping on Amazon, every time we move to the description of the production recommend related item will show up, then people will check out and finally buy some items which they didn’t plan to buy in the beginning. Kroger using those sensors and screens to interact with customers could have the same effect as Amazon do. However such additional sensors in brick and mortar stores couldn’t increase their competitiveness relative to pure ecommerce grocery. Pure ecommerce grocery has more products available and better interact with customers through the app, those will not be changed by the additional sensors.
The sensors can be used in specific products, like health, alcohol, or higher price products. For example, people might want to know the function of ingredients or the comment from other buyers. Sensors can be helpful if they have enough variety of products for customers to choose. Sensors can be not that competitive compared to other grocery stores. People go to grocery store clearly and easily know what to buy. The products are not that high price to make customers think twice or third times. They may be lazy to take and check phone around simply buying 5-dollars chips.
There can be some value in implementing this kind of technology, and I think it is the right move for Kroger to try and see. It can be adjusted to suit specific needs of the company but it will take time to educate the clients to use the technology as well as Kroger’s own education in what can really be done with this. The fact that the article was written a few years ago and it is still not implemented can serve as proof of the above.
It can help clients decide, but it can also help Kroger’s direct customers to buy certain brands or products, railroading the customers for a particular set of products. But it needs time to adjust to both, customers preferences and Kroger’s needs.
The competitive advantage that e-commerce stores have is the personalized shopping experience for consumers as well as the ability to shop without the uncomfortness of human interaction. Adding additional sensors and LCD screens to interact with customers’ shopping lists will allow brick and motor stores to level the playing field. Many customers feel uncomfortable reaching out to staff to ask product information, so having the ability to ask questions and learn more about products details without human interaction will help these consumers increase their shopping experience. In addition, sensors and LCD that were fed with data from the shopper’s mobile app will recommend shoppers with products they did not plan to buy in the first place. For example, in the article, a shopper with a gluten allergy that has an active exercise habit will see a recommendation about gluten-free protein bars when the sensors sense they are walking by the protein bar aisle. This will increase the possibility of impulse buys. Moreover, education regarding novel menu options or substitutes that are healthier or customized pricing also increase profitability for grocery chains. This dues to when customers seeing that their is healthier options they can get for a price with not too much difference, they will be less hesitant to make the purchase, at the same time, if the screen shows them how much they would be able to save with their purchase if they choose to buy more or choose the suggested products. Human brains will tend to go for sales without noticing that they are spending more. This eventually leads to higher profitability for the grocery chains.
This kind of technology could help Kroger with deliberate buyers and reduce the amount of impulse buying. People who have become more health-conscious and be looking for healthier substitutes of items that are on their everyday list. These individuals might appreciate getting help in terms of recipes to prepare these new items. Kroger’s implementation of new technology could serve this need. However, since this technology tied shoppers’ mobile lists, it would dampen any impulses buys on items that the system does not connect to those lists. One thing that new technology relies on is shoppers who actively use their phones while shopping. Unless Kroger implements some program to drive up the usage of their phone application where it is advertising the benefits that this new technology could bring to the shopping experience or something, the impact of the technology would be limited.
The use of technologies like this one is going to help retailers gain competitiveness compared to ecommerce because of a couple reasons I point out next:
• The article states “…digital shelves can draw a shopper’s attention to relevant products.”, this trait is very important and something that has been missing in brick-and-mortar stores. If retailers have the ability to call the customer’s attention to products that are sometimes not easy to see in the shelves, this will increase the overall customer’s shopping basket. Moreover, impulse buy will be more likely to happen since tailored offers would be made to the customer who is most likely just focusing on finding the products in his shopping list.
• Physical stores provide a great competitive advantage to retailers against ecommerce incumbents. Hence, migrating to a combination of digital and physical interaction with the customers can appeal to customers that would otherwise buy online. This new market opportunity can definitely be profitable if approached correctly.
Yes, I believe such additional sensors in brick and mortar stores increase their competitiveness relative to pure e-commerce grocery options. Brick and Mortar stores give the benefit to customers of viewing the product right in front of them with their own hands, feeling the weight and seeing the contents. Quick judgement follows and so customers tend to impulse buy, especially grocery, food items and any small-size items.
With further details immediately available, customers will gravitate towards the products that best fits their needs, which should be available in very close proximity to them anyway. This goes back to increasing the competitiveness of those brick and mortar stores.
Yes, education regarding novel menu options or substitutes that are healthier or customized pricing increase profitability for grocery chains. Customized pricing and offers/discounts/bulk deals via the app done through good marketing can push customers to buy more products through meal ideas/recommendations and introduce them to new products that better suit their needs, all through better visibility. Their baskets in all likeliness would be fuller. However, to analyse profitability, the investment, operations, installations, and maintenance of these screens or the mobile application itself have to be calculated.
With the continuous growth in e-commerce across all industries, drawing customers into physical stores has become more of a challenge; they need to value the experience they will be receiving over the convenience of shopping online. By creating a more interactive and personal experience in grocery stores, like Kroger has mentioned in the article, will create a reason for customers to want to come into the stores to test out the new experience therefore creating competition between brick-and-mortar and e-commerce grocery options. Along with this more personalized shopping experience customers will be more inclined to impulse purchases and spending more money on healthier options or products that may not have felt the need to purchase in the past resulting in an increase of sales.
With many companies offering similar products, companies can get a competitive edge by providing a better customer experience. The use of such a technology can help brick and mortar stores in couple of ways:
1) People that are new to the store can get personalized experience in the store.
2) Such technology would also come in handy for people who have developed allergy for some kind of product. For example- a person who is intolerant to peanuts can clearly see the ingredients a pro duct and can avoid it.
3) It can also help Kroger to get a better customer analytics and hence select products for the
different stores differently
It is uncertain if the new technology would provide Kroger a competitive advantage over others. I feel there is a set consumer segment who prefers stores over ecommerce and vice versa. During pandemic we did see consumers preferring ecommerce websites for grocery shopping. In store purchase has a more psychological feeling attached to it, people do consider it as a stress buster after a hectic week. Healthier products such as organic foods are definitely more pricey with higher margins. Lets say a consumer does follow the display of a healthier recipe and with impulse buying he bought all the ingredients for the recipe. On the other hand he might not purchase any of the junk items such as chips, ice creams or pizza. Will the store enough margins to make up for the opportunity profits of the junk products sales? Kroger needs to test this methodology before going all in for it.
The pandemic has changed a lot both in terms the sales and also in what customers are looking for in terms of products they purchase. Definitely if the customer’s experience is improved, Kroger will have a competitive edge over other companies. Customer’s will be able to see ingredients or other similar products on digital platform which will make it easy to view information because of the increased font size and also makes information readily available for the customers. This information also adds to impulse buying of products as times that were difficult to find will now be easier to find because of displaying them digitally. Also digitally items that take a lot of space in store would not occupy any physical space and will be readily visible to customer. Overall, because of the ease of buying the sales would increase drastically and this would keep Kroger ahead of the game.
This is a classic example of how Industry 4.0 is changing the world we live in. As we move towards more customizations to exclusively suit the buyer’s needs, this article shows how Kroger is using visual devices to tailor product information and display relevant insights for the buyer. Kroger will surely improve its competitiveness among other brick and mortar stores, but when considering its competition with other online stores, a lot more factors need to be considered. Visual representation of product information, suggestions of better alternatives, and customizations/incentives are standardized features of an online store. Customers who visit brick and mortar will definitely have a better experience, but it is not enough an incentive to attract online customers who like the convenience of home delivery with these features. Hence its competitiveness compared to pure ecommerce stores remains suspect. Impulse buys are triggered by visual cues. Having such devices on the aisles may lead to greater visual cues to the impulse buyers, thereby resulting in more of these purchases.
Education regarding better options is a way of adding value to the customer experience. Regarding its impact on profitability, there are multiple considerations involved. Better customer retention and cannibalization of other brick and mortar store customers will lead to higher sales. If the alternatives we are suggesting are indeed higher margin products, it will lead to better product profitability. But if they are not, we are incentivizing purchases of lesser profit margin products. We can indeed leverage customized pricing for higher sales. But only a pilot run will show the promise of this technology.
Innovation and change is extremely important in Brick and mortar not only because of pandemic but also because of growth of e-commerce. Interactive screens will provided the needed information to the customer thus doing both: giving the feel of touch while shopping as well as providing the rich information that e-commerce provide while shopping. Hence, this move from Kroger can be a game changing thing for brick and mortar grocery.
However, there may be possibilities of product cannibalization. For example, in case of healthier option a customer will be likely to pick that option (although expensive) and it might affect the sales of the inhouse Kroger products as they are cheaper but most likely be on lower side in nutritional content. Hence, the product segmentation will be something that will change with advent of this move from Kroger.
Physical and online stores cater to different kinds of customers. For example, someone who likes to invest his time to choose the right product will prefer a physical store whereas a person who is not choosy and is happy with any product will prefer an online store. So, the question here is whether such sensors implemented at physical stores can improve their competitiveness. In my opinion, it is an additional benefit offered to the customers. Rather than going through all the details in the package, the LCD screen can display the necessary information. However, we should analyze whether these stores have the capital to make such an investment at the first place. An established company like Kroger can make necessary investments and wait for years to get the return.
There is no doubt that education regarding novel menu options or substitutes that are healthier or customized pricing can increase profitability for grocery chains. Again, the question that we need to answer is whether these stores can make the initial investment. These costs may be recovered over a period of time, but do these stores have enough funding to stay in business until then. If so, then this additional benefit offered to the customers can improve their competitiveness.
As of the article publish date in 2017, e-commerce grocery shopping accounted for only 0.16% of the grocery market ($1 billion of $670 billion). For that reason, I don’t believe that the digital sensors and smartphone pairing will necessarily bring a justified competitive advantage for the brick-and-mortar grocery store in comparison to the cost to install such devices. However, the idea could definitely increase the possibility of impulse buys as the shoppers smartphone list could recommend similar products on your list, much like you would see when e-browsing. On whether the education of novel menu options and substitutes would increase profitability for the grocery store depends heavily on the store demographic.
I think the sensor system could prove to be profitable with the right store fit, but I don’t think a wide-sweeping adaptation of a sensor-based store is going to knock out the desire for true online grocery shopping.
I would agree partially with the advantages. I feel the benefits will vary from categories to categories.. For some categories like food items, this can be major boost in bringing brick-mortar retails in comparison with ecommerce. However, I’m not sure whether this can bring any advantage for typical grocery items, because not very in-depth knowledge isn’t required for these items. Moreover, certain superstore categories may not benefit at all. So my suggestion would be to use these items effectively in areas that it can serve. I feel these can bring in impulse buys for people who are again looking for specific categories. One thing that can be done is to use the customer data to channel promotions for customers, and this might increase chances of impulse buys.
Kroger’s attempt to create interactive grocery shelves will indubitably impart competitive advantage if the motive behind introducing this concept is to enhance the consumer’s in-store experience by also helping them deal with the problems like not forgetting to pick certain products on their long grocery list or locating the products on shelves that suit their requirements. But considering this approach as a means to gain a competitive advantage over e-commerce options for grocery purchases might be too far-fetched. Consumers who have become prone to the habit of researching and creating grocery list while lying on their couch and getting it delivered on the doorstep without having to visit a physical store will most likely not find this initiative as a strong enough incentive to overcome their inertia of getting out of their couches. And consumers who like handpicking their products will do it regardless of any initiatives Kroger takes to compete with e-commerce platforms. But as mentioned earlier, with this initiative, their experience will improve in terms of ease of locating their products and discovering better options while also saving their time. But that is it, a cut above consumer experience is all, that this initiative can offer. And it not apt to look at it as a strategy to compete with online grocery shopping options.
These technologies can really benefit a brick-mortar setting over ecommerce. Given the timeline of this story, I assume the normal LCDs and detailing on the app weren’t present in 2017. I believe the addition of these features contributed to a few points. Customers who were not sure about the exact ingredient of product or what exact brand they should choose while visiting a grocery store can now easily have those information. Besides, the tendency of impulse buying will also increase for shoppers, since now they have the details of items. This detailing will allow them to reduce the perceived risk they are taking in buying a product or item. Overall, these features will help brick-mortar stores to gain certain advantages.
Being that this article was written over three years ago I am not sure how much this technology has actually been implemented in stores. For me personally, I have never used such technology and I typically shop at brick and mortar stores like Walmart and Target. I am familiar, however, with mobile apps that have been used for making purchases, scanning barcodes, searching for items etc. at Walmart, but I have not used it in terms of interacting with my shopping list.
Such a device, if used correctly by the customer, could improve the chances of impulse purchases, but I think being in the store already makes that possible. I would rather have customers looking at the isles and all of the products than looking at their phone majority of the time. However, for those that do enjoy using their mobile device in the store to track their grocery list may find this new option very beneficial, thus allowing a more competitive business for Kroger.
All in all, I don’t think this specific aspect of interacting with customer lists is that beneficial and it may annoy customers when shopping, however I do think there are some benefits such as repeat purchase items that customers may forget to put on their lists but can be reminded of every time they enter the store.
I feel the technologies will be helpful but the extent of advantage can vary from category to category. For example, for food items, people will choose to have impulse buying because they now have access to certain details. However, for certain other items the extent of impulse buying is debatable. Overall, these features will serve as competitive advantage for brick-mortar setup under certain categories for which customers will need or seek details.
While the idea seems interesting, it does come with a few flaws. The article mentions that the customers need to have the app installed on their phones for the sensors to detect their data and provide customized options, but it does not mention how to make all the shoppers install the app on their phones. There is a good chance that even regular Kroger shoppers may not have the app installed on their phones. There is also the issue of data privacy and customers may not be okay with the sensors trying to snoop around their phones.
The project did not describe how the sensors would work when there are many people in the same section of an aisle?
When shopping from a pure ecommerce store, all the shopper has to do is type in gluten free cereal and the list of products matching the search keywords pop-up. This level of convenience will always beat searching for products among many aisles, in a brick and mortar store.
I do not see the sensors increasing the possibilities of impulse purchases as the products are physically present right before an impulsive shopper. While this is a novel idea, I do not see it increasing Kroger’s profitability significantly.
I rarely use those devices at the grocery stores. and noticed that very few people would use those devices. As a customer, advanced devices would not be the reason that I choose certain grocery stores. However, technical devices would offer customers recommended products, which would somehow increase the possibility of impulse purchases. meanwhile, education regarding novel menu options or substitutes that are healthier or customized pricing might not be able to increase the revenue or profit for the grocery chains. For instance, if a recommended product is more expensive than the customer’s choice, the customer might choose to give up purchasing the products or stick on previous choices.
For e-commerce buyers, they would mostly not affected by these sensors because they don’t choose e-commerce for better product info – they choose e-commerce for the ease of “clicking to purchase”.
However, these devices can potentially increase the possibility of impulse since now the grocery store has another screen to advertise their products and provide more information than a paper “sale” sign – this can further encourage the buyer to make “impulse” decisions.
The profit, however, would be hard to say because this is a complex decision-making process. Even assuming customers were all impacted by the sensor – obviously impossible in the real-world – great doubts still exist in the profit increase since compared to the overall store, gains from healthier food and novel menu options might not be balanced with a decrease of profit form customized price (which in logic should be lower than the price on the display), and even if they do they might just affect a tiny bit in the profit mix of the whole store.
Adopting sensors and analytics to e-commerce will definitely increase the competitiveness between groceries stores, because every retailers will try to increase their competitiveness by introducing new attractive products or giving discounts to the retail price. Moreover, with sensors, customer’s mobile app can recommend products that are more relative to them, thus increasing the probability of impuse of buying these products. Therefore, technology is really changing customers’ behavior of purchasing, compared to the time before. With this trend, it is better to design a novel menu option to customers because that’s the way to induce customer to purchase something that they might need most. There is another thing need to be thought – balance. Even if new technology changes our life, customers’ demand keep changing. What retailers should think of is to observe their demand and adjust accordingly. If they just rely on new device and only be satisfied to it, there might be more uncertainties that they might fail due to misjudement. Keeping balance between adopting new sensors technology and observing trend will help brick and mortar stores increase their competitiveness under highly competitiveness of e-coomerce environment.
In my opinion, this move wouldn’t help the brick and mortar establishments to become more competitive. E-commerce options can provide customers with information with much more detailed information and it is not an essential feature of walk-in stores. In this way, customers can easily get the products they want by clicking the mouse. Supermarkets don’t want to see that all customers are able to finish their shopping list quickly. They want to see customers walk slowly and searching for what they want, meanwhile, grabbing stuff that they don’t plan to buy. So I will say that this is not an appropriate idea.
This king of innovation of incorporating interactive grocery shelves would definitely increase or improve their competitiveness regarding the new pure e-commerce grocery options created by amazon. Customers in nowadays are looking for more than just a good product, its more about the quality and the experience while shopping. Also, information regarding each product is so important for customers, in order to choose the best products, especially when the tendency for healthier and organic options its increasing.
As customer I can easily imagine myself deciding to go to a store where I can use those interactives screens to get information and looking for suggestions for ingredients, making me decide for this kind of stores besides the regular ones. I believe that this interaction of customers and platforms can also provide other benefits to the company, being able to store real-time information about each customer providing Kroger with additional data refereeing customer behavior and preferences.
Certain customers prefer buying grocery looking at several factors like the latest expiry date, availability of a specific product, quality of meat or fresh vegetables which can happen effectively in a brick and mortar stores opposed to online purchasing. My personal example is that I prefer to shop in a physical store for fresh ingredients since I like picking them myself. A lot of people look for substitutes if they cannot find their choice of product and it is easier to compare when you have an array of products in an aisle right in front of you. Digitizing these stores will attract more customers in my opinion since it is very quick. Impulse buys happen any time, irrespective of the technology. However, the chances of impulse buys, when the application motivates you to buy items tailored to your preferences, are higher. Education regarding novel menu options or substitutes that are healthier will definitely increase profitability for chains if they are well priced. Depending on the type of customers, prices and products can be varied.
Use of data to manipulate the customer choices to upsell or cross-sell is definitely easier on an e-commerce platform than in-person shopping in a brick mortar store as the data collection is much easier and can be done while shopping. For Groceries shopping, the majority prefers shopping through a brick and mortar store and the portion of the population, as per the article, that prefers an e-commerce platform for their groceries is still less. I believe that Krogers stands a good chance to improve the customer’s in-person shopping experience and retain and capture the market share of grocery shopping. Data can be used for many things, like market basket analysis, that will help the retailer earn more profits by upselling. This step is will not only help the retailers to earn more but also will improve the shopping experience that will also help retain them.
Additional sensors like the ones described in this article will help make traditional grocers more competitive as it enables the fusion of consumer data with the products on the shelves. This ability is currently widely used be e-commerce operators such as Amazon and others, where user preferences are used to promote certain items. This would without a doubt increase the probability of impulse buys, as the interactive shelves will know the consumer’s preferences, and even when its not on their shopping list, can promote one of their most-purchased items. This promotion may be through a product advertisement, a price discount customized to the specific customer, or the advertising of a recipe which includes some of the products that are already on the consumers list. Grocers can also use this technology to promote healthier, sugar-free, or organic products to customers who prefer those alternatives. However, if a consumer does not prefer these sorts of products, the best way to increase profitability will be to promote the products which consumers are most likely to buy. Since grocery stores run on such low margins, the best strategy will always be to increase the volume of sales.
I think this concept enhances the customer experience by making it easier for the shopper to pick the product, pay and exit the store. Additionally, it gives the customers an option to hand pick items they want to feel and touch rather than purchasing it online. I do not think it reduces costs for the retail chain since they still require the man power to replenish inventory in the store. Hence, impact on profitability will be potentially because of increasing impulsive purchases and the increase in convenience to the shopper. An important point is that this technology is currently viable for a small store due to the limited number of SKUs it brings and the lack of maturity in sensors which might not identify products kept in wrong shelves, and thus needs time to grow to be adaptable and scalable.
Firstly, deploying these technologies will drive in more footfall and consumer traffic, additionally such tech will give consumers the option to physically hand pick items they want to feel and touch rather than purchasing it online but it cannot completely help any brick and mortar store overcome the shortcomings of not being an e-commerce business.
In my opinion, it can drive customer footfall, but not profitability in the near future as the setup and maintenance costs of these technologies is relatively steep.
Lastly, given the level of interaction and friendly user-interface of such technologies, along with seamless purchases (like Amazon go) will definitely increase the possibility of impulse buying as it will be easier to shape, understand and influence consumer behaviour.
In my opinion, the use of sensors in brick and mortar companies can increase their competitiveness when we compare them with the fully e-commerce stores. One might say that people who are coming in the stores and choosing physical in-person grocery shopping rather than the virtual experience would do so because of the better choice and selection they can make after looking at or touching the product which they cannot do in an on-line purchase. However, there are numerous examples where customers seem to find these touch screen or self-help kiosks at the stores even more convenient and perhaps time saving. I can think of airports where self check-in kiosks are being used even when customers have the option of doing the same tasks online at home or use e-tickets or at restaurants/ food chains like Mcdonald’s where people prefer ordering through those touch screens instead of standing in queues. These examples may not be an apple to apple comparisons but they give us some insights into how customers behave in a certain condition
I do believe that adding the technology aspect to the normal grocery shopping will help in creating a competitive advantage mainly because it is adding a new element to a routine way of doing things. Something that attracts customers towards you would definitely seem to be helpful. In this case particularly there is a segment of market as discussed in the journal that would be attracted to such a device to make sure they are buying healthy items. On the other hand I feel this would also increase curiosity among other customers to look for new products and search for ingredients in products they haven’t tried before. This would increase the time spent in the shop as well, while maintaining social distancing. That all being said, it is definitely going to target only the customers that are already buying from the store and not online. So, the percentage of the market that is being impacted might not be a lot. Although, I believe that adding new elements to a traditional shopping experience would add value.
The additional sensors in brick and mortar stores will help in increasing their competitiveness relative to pure ecommerce grocery options.
With the data collected, the stores can gain the information with customer references, their shopping time and buying power etc. Thus, the devices will help in increasing the possibility of impulse buys when do advertising per understanding customer and target customer.
Education regarding novel menu options or substitutes that are healthier or customized pricing will not see profits in short-term because that is not an easy thing to change customer behavior and habits, but can be a long-term gradually profits when continually doing so, especially in this highly developed society with the innovation of technologies.
While these new sensors really help make customers experience more interactive, I am of the opinion that people use e-commerce platforms for ordering groceries because of ease. Walmart for example already displays nutrients and other product related information on the app, hence I feel there is much more possibility of people shopping online rather than buying their groceries in person.
Having said that, I feel these sensors are quite innovative concept and they might generate panic buying initially, but I feel not all store locations need to be upgraded to such infrastructure and only stores which have higher revenues should be targeted.