Stewart Samuel is Program Manager at IGD Canada, a food and consumer goods research organization that provides market intelligence to food retailers. We spoke with him about grocery retail trends, from in-store technology and new designs to the changing roles of cashiers and brands.
Is a contactless store virtually guaranteed for convenience and groceries? Or will a hybrid model continue to dominate for the foreseeable future?
We expect more cashierless stores to open globally, with most of them focusing on the convenience channel and other locations where speed of service is important. This includes airports, sports venues and events. But more and more options will be available to shoppers, so most stores will be hybrid – customers will be able to shop using new technologies, or as they would in a conventional store with a standard checkout or free-standing. -service.
You said suppliers need to prepare for a “front store merchandise-free environment”. What are the implications of deploying traditional shopping programs near high traffic areas?
Suppliers will have to look for impulsive opportunities beyond the traditional payment area. At present, it is an important source of sales and profits. But as store designs are redesigned and more shoppers bypass this part of the store, businesses will need to think about how they can generate in-store momentum.
Some of these will be technology-driven, such as instant app-powered recommendations, or the use of smart shopping carts providing suggestions as related products are placed in the cart. Other retailers have experimented with snack zones in their stores, consolidating all the products usually presented at checkout into one convenient destination at the front of the store.
When will we see more technology integrated into customer marketing and point-of-sale assets?
We are still several years away from that, although there are many test concepts in the world that use digital header cards and bus stops. As retailers build their digital media programs, the use of in-store digital screens may also become part of the revenue mix.
Walmart recently redesigned its stores to be more spacious. Do you think this will also happen to pure grocers, as the trend towards online delivery continues?
Stores will change, and potentially that change will become faster. We’ve identified five themes that will shape stores of the future, including being more exciting and experiential, digitally enabled, highly efficient, omnichannel native, and naturally sustainable. More stores will reflect some or all of these themes, depending on format and catchment area. In reality, supermarkets haven’t changed much in the past 20 years, but the scale and pace of digitalisation, the growth of e-commerce and the pressures on margins faced by operators will lead to faster changes. .
When will we see retailers integrating the circular economy into their sales plans? Or will Tide’s bottle filling operate more like a subscription/delivery model?
We’ve seen several of these concepts launch globally, with many stores offering over 70 different items in refillable solutions. Most of them happened outside of Canada, with the exception of Loblaw which partnered with Loop, a global reuse platform. This is partly because bulk foods have been sold in this format for over 30 years. The same configuration did not exist in Europe, for example. This has led to more innovations in some markets, including refillable liquids such as detergents, soaps and shampoos.
Is there an “ideal” grocery footprint for newly created stores? Are the days of large, sprawling suburban locations a thing of the past, or will they be revitalized as online fulfillment hubs?
In Canada, there is very little appetite for department store development, outside of areas of new population growth. The main objective of hypermarkets and supermarkets is to size them correctly, including using space in new ways. This could include running or introducing new services, such as take-out food or healthcare services. There are still opportunities with discount stores and convenience stores, but what we need to watch out for is the emergence of digital-based competitors, given the relatively lower barriers to entry.
What are grocers doing who have reorganized product layouts/selection to accommodate traveling office workers when there are far fewer of them?
This is a major challenge for retailers in urban centers where they have developed formats to meet consumer needs at lunchtime and dinnertime. More workers are returning to cities, but it’s a slow process and unlikely to reach pre-pandemic levels. For many operators, it will be necessary to adjust their solutions, with a focus on more pre-packaged and on-the-go products. Providing easy dinner options is a big opportunity in today’s environment, where restaurant price increases are outpacing grocery store price increases. This is where a strong value proposition will resonate with consumers.