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Why disruption in food retail doesn’t start with technology

FMI Connect speakers discussed why disruption in food retail is more about the shopper and less about technology.

5 min read

Food Retail

Why disruption in food retail doesn't start with technology

AOL co-founder Steve Case speaks to attendees at FMI Connect ( Food Marketing Institute/Flickr)

Innovation in food retail is about the shopper more than technology — or at least that’s what speakers were saying last week at the Food Marketing Institute‘s FMI Connect show in Chicago. Unlike in years past, a major theme in the technology category of this year’s show was the secondary nature of technology itself in relation to the customer.

“People believe technology is the disruptor in retail. It’s not — the shopper is the disruptor,” Enda McShane, CEO of Velocity Worldwide and Darius Technologies, told FMI Connect attendees.

Up until now, technology has been used to serve retailers, but it needs to shift to serve shoppers, he said, pointing out that a century ago, grocery was all about personalization and connecting with individual customers, long before technology came along. And today, retailers have to really get inside grocery shoppers’ paths to purchase to draw shoppers into stores. But the industry has been inundated with technology as shoppers have integrated technology into their lives and retailers are behind the shopper when it comes to technology, he said.

But that is likely shifting.

According to Steve Case, co-founder of AOL, things like e-commerce, grocery delivery and subscription services that are currently on the peripheral of the food retail industry are moving into the mainstream due to factors like consumer trends and technology.

“Something is happening, something is brewing,” he told FMI Connect attendees.

Case said that there are accelerating trends around how food is created, distributed and consumed, and the challenge for food retailers is to figure out how to navigate those trends and prepare for the future. A key to that is recognizing disruption, he said. Retailers have to be aware of the industry and patterns and they have to be able to spot them, in addition to identifying potential partners who can help them navigate disruption and aid them in their innovation efforts.

“That requires getting out of the mindset of managing and into the mindset of imagining,” Case said.

When it comes to disrupting the industry and really finding the sweet spot with technology, retailers have to look beyond e-commerce, McShane said. The focus needs to also be on using technology to increase the basket sizes of in-store shoppers, who still make up the majority of grocery shoppers.

“You’ve got to get personal about what the customer wants,” McShane said.

The key to e-commerce efforts and creating an omnichannel shopping experience is collecting valuable customer data, according to McShane. Currently, many retailers don’t follow shoppers all the way to the end of their journey, but the key to true disruption in food retail is using e-commerce and omnichannel efforts to gather data and turn it into “quick, actionable insights,” he said.

The best way to find out what customers want is to ask them, McShane said. Retailers have to engage with their customers and focus on creating two-way relationships with them.

Technology presents retailers with an opportunity to create a good customer experience for their shoppers, Dean Lanzman, consulting director of digital proposition at Symphony EYC, said at FMI Connect. Retailers should take technology and use it to examine their efforts toward relevancy and personalization and really think about how they can make the trip to the store easier.

One example Lanzman gave was a real-time recipe creator that uses visual recognition technology and loyalty data to generate instant recipe ideas. He also pointed to an ideal mobile shopping experience that includes a combination of apps that deliver helpful solutions for consumers and make shopping easier and more pleasureable.

The idea is to allow shoppers define their own rules when it comes to technology and disruption and ask them what is important to them when it comes to promotions and content, Lanzman said. Technology won’t be useful to retailers unless they create a retail value proposition that adds to the customer experience, and one way to do that is to provide instant rewards with impact, he said.

For Case, he said the accelerating trends in food retail and CPG include the drive for convenience, healthy foods with “real” ingredients and experience.

“Those are some of the trends that are going to drive us,” he said.

It is vital for food retailers to think outside the box and identify how they can play to these trends and become disruptors in their own industry, according to Case. One of the keys, he said, is a “mix of curiosity and paranoia.”

Another key to industry disruption is to remember that the shopper must be the driver of technology, according to McShane.

“Technology for innovation is failure,” he said. Technology must be for the customer.


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