Top Technologies for Today, 2020 and 2021
One of the best ways to see how grocers are investing in technology is to analyze the 330 datapoints gathered in this study that dive into spend trends for 66 separate technologies. This data is broken out according to where grocers are spending tech dollars today, where they will spend tomorrow (2020), and where they are planning to spend in the future (2021).
Today's tech investments are flowing into upgrading or replacing such core technologies as Price Management, Assortment Planning, Category Management and even the nitty gritty of Item Master Data Management.
From this data-rich perspective it is clear technology investments are flowing along two primary tracks – core fundamentals and omnichannel advancements. Grocers who want to benchmark against competitors should compare their technology to data about today (current status), tomorrow (in 2020), and the near future (2021).
The omnichannel store is the focus in 2021 with planned investment flowing into Scan and Go on Store Devices, Scan and Go on Shopper’s Devices, and Click-and-Collect Management.
The three technologies that achieved #1 rankings on grocers’ priority lists
Price Management (investment today)
Shopper Tracking in Stores (investment in 2020)
Scan and Go on Store-Owned Devices (in 2021)
Top Business Opportunities and Challenges
Looking ahead 18 months, grocers identify the top business opportunities for growth and the biggest challenges they face, which are two major concerns that will shape technology investments.
#1 Business
OPPORTUNITY
#1 Business
CHALLENGE
Grocers identify Advancing Digital Strategies, chosen by 75% of respondents, as a way to seize business opportunity over the next 18 months.
Retail is the nation’s largest employer so it is not surprising a Tight Labor Market (chosen by 57%) emerges as the top challenge for grocers over the next 18 months.
In 2020 retailers are focused on identifying and serving the individual customer with tailored services by investing in Shopper Tracking, Location-Based Marketing and CRM/Personalization.
Top 5 Business Opportunities
Over Next 18 Months
Topping the list of business opportunities that will drive growth is Advancing Digital Strategies to supplement and enhance store investments. This was chosen by 73% of grocers and was far ahead of the second place opportunity, which is Developing Personalized Marketing Capabilities (58%).
In the second tier of opportunities are Proprietary Product Development, Expanding Home Delivery, and Expanding Mobile Capabilities.
In line with current headlines, it is not surprising to find the top challenge is the Tight Labor Market, which was chosen by 58%. Price competition, which is a perennial concern, comes in second place and was chosen by 50%.
In the second tier of challenges are Increasing Margins and Profits (38%), Amazon (innovations, blockbuster deals, etc.) chosen by 28%, and Lack of Rich, Detailed Data about Customers (27%).
73%
58%
45%
43%
43%
Top 5 Business Challenges
Over Next 18 Months
1. Tight Labor Market
2. Price Competition
3. Increasing Margins/Profits
4. Amazon (innovations, acquisitions, etc.)
5. Lack of Rich Data about Customers
57%
50%
38%
28%
27%
Revenue Strategy
While grocers were slow to enter the digital space, their initial hesitation has faded and been replaced by enthusiasm. Savvy grocers both big and small have embraced omnichannel retailing, offering a host of digital services designed to provide a seamless shopping experience and remove friction from the shopping experience.
In addition to growing digital revenue, grocers are also growing their private label sales. In-house brands give shoppers appealing options to name-brand products while simultaneously increasing the grocer’s bottom line. Over the past five years, 81% of grocers recorded increased private label sales with 42% reporting a major increase.
Thanks to the surge in private label sales, these high-margin products now account for 29% of sales across the grocery segment.
Investments in omnichannel are clearly paying off as grocers report that 17% of total sales today can be attributed to digital efforts. This success has led grocers to expand deployment of next-gen digital experiences and technologies.
Amount of Revenue from Private Label Sales
29%
Private Label Sales
Over the Past 5 Years
42% Increased Greatly
39% Increased Somewhat
3% Decreased
15% No change
Store Technologies
Digital shopping options help make the path to purchase smoother for tech-savvy consumers, but the vast majority of commerce still occurs at the store level. As a result, grocers invest heavily in brick-and-mortar locations to ensure they are well equipped with conveniences and services that meet shopper needs today and tomorrow.
Grocers report that core capabilities such as Food Safety (71%), WiFi for Customers (61%), Food Labeling (56%), POS Peripherals (54%), POS Software (46%) and POS Hardware (43%) are all up-to-date. This frees up future budgets to be allocated for investing in experience-enhancing capabilities.
Merchandise Management and Supply Chain
SUPPLY CHAIN
Started a Major Upgrade or Will Start within 12 Months
50% Assortment Planning
47% Category Management
43% New Product or
Private Label Development
41% Item Master Data Management
41% Allocation
Having the right merchandise mix is important in every retail segment, but it is even more vital for grocers to be in stock for essential purchases. Customers expect to find their favorite foods readily available whenever they visit a store and are quick to abandon a grocer if their needs are not met.
Smart grocers know this and continually invest in advancing merchandise management capabilities. This fact is seen by examining the 13 merchandise management technologies tracked in the study, all of which show significant numbers for being up to date.
However, grocers are not standing pat and instead report a broad range of upgrade activity over the next 12 months. Technologies at the top of the upgrade list are Assortment Planning (50%), Category Management (47%) and New Product or Private Label Development (43%).
MERCHANDISE MANAGEMENT
Started a Major Upgrade
23% Sourcing
22% Order Management
A finely tuned supply chain is an essential complement to an advanced merchandise management suite. Products and SKUs in a grocery setting are both located in stores and in motion. Successfully managing these interconnected tasks is the mission of supply chain technologies.
As noted in the analysis of merchandise management technologies, it is evident grocers have been steadily investing in their supply chain capabilities in recent years and will continue to do so at least into the next year.
The top technologies where major upgrades and deployments are underway are: Sourcing 23%, Order Management (22%), Warehouse/DC Management (19%) and Real-Time Order Management (17%).
Over the next two years the top two supply chain areas of investment are Real-Time Inventory Management (34%), Fulfillment (26%), and Order Management (20%).
Will Start a Major Upgrade within 2 Years
34% Real-Time Inventory
Management
26% Fulfillment
20% Order Management
Analytic Technologies
Growth opportunities clearly exist in digital and omnichannel strategies, but there are also obstacles that hinder growth in such areas as price competition and a tight labor market.
33%
32%
31%
Predictive Analytics is the top analytic technology in deployment today among retailers and
also the number two technology overall where work has begun but not yet been completed.
In-Store Shopper Tracking Analytics, where today only about one in five have the capability, shows a combined 32% investment intent over the next two years – 16% within the next 12 months and 16% within two years.
Space Optimization technology, which analyzes sales data per store, per category and per foot, shows a combined 31% investment intent over the next two years – 17% within 12 months and 14% within the next two years.
Advanced analytics is viewed as a touchstone for improving virtually every facet of the grocer’s tech stack. In this section we track 11 separate analytic technologies that are crucial for succeeding in today’s highly competitive environment.
Among the 11 analytic technologies identified, the top two where grocers have focused their investments to become up-to-date are Competitive Analysis and Category Analysis.
Analytic technologies that show the highest future levels of investment are Space Optimization (17% within 12 months) and In-Store Shopper Tracking Analytics (16% within two years).
Despite clear priorities in several individual technologies, the analytic category as a whole does not show the same strength of investment as seen in supply chain and merchandise management technologies for 2020 or store technologies in either 2020 or 2021.
However, the investment trend has shifted in a big way toward Predictive Analytics where 33% of grocers say they have started but not yet finished a major upgrade or deployment. Tied in second place at 24% are Price Optimization and Prescriptive Analytics.
LABOR/WORKFORCE
Website and Digital Technologies
Grocery shoppers are now digital and omnichannel consumers. Both in-store and out, they demand grocers provide them with capabilities to shop anywhere and anytime.
Grocers are actively embracing these technologies and increasing their digital firepower. Major upgrades currently underway include E-Commerce Platforms (26%), Community (24%), Customer Reviews/Ratings (22%), and Product/Catalog Management (21%).
Over the next two years grocers are planning strategic enhancements to their ability
to maximize Remarketing (34%), Digital Coupons (29%), E-Commerce Platforms (28%) and CRM/Personalization (28%).
Fast-moving omnichannel shoppers are driving the industry to become fast-moving omnichannel grocers.
Started Major Upgrade
21%
Planned Upgrade Within 2 Years
25%
Product/Catalog Management
Omnichannel
Planned Upgrade Within 2 Years
25%
TASK MANAGEMENT
The labor-intensive nature of grocery and food retailing requires a sophisticated approach to workforce management, a core necessity that grocers have long recognized as one of the keys to long-term success. Reliance on a large workforce has elevated the necessity to invest in management technologies that support labor efficiency, productivity and optimization.
Grocers report that vital technologies such as Time and Attendance (74%), Labor Scheduling (60%), Human Resources and Benefits (59%) and Absence Management (54%) are all up-to-date due to consistent investment in recent years.
Although many key labor solutions are currently up to date, grocers are aware that the tight labor market requires them to take specific actions to adapt. These include planned upgrades to Mobile Workforce and/or HR Applications (27%) within the next two years. Another big area of investment in the next two years is in Task Management (25%).
1. Advancing Digital Capabilities
3. Proprietary Product Development
4. Expanding Home Delivery
5. Expanding Mobile Capabilities
2. Developing Personalized
Marketing Capabilities
49%
40%
39%
37%
Shopper Tracking
Location-Based Marketing
Real-Time Store Monitoring of KPIs
Click-and-Collect Management
Started or Will Start Major Upgrade within 12 Months
40%
34%
34%
32%
31%
Shopper Tracking
Location-Based Marketing
Will Start Major Upgrade within Two Years
Scan and Go Using
Customer Devices
Click-and-Collect
Management
Scan and Go Using
Retailer Devices
1. Price Management
2. Predictive Analytics
3. Assortment Planning
4. Category Management
5. E-Commerce Platform
6. Item Master Data Management
7. Replenishment
TODAY
1. Shopper Tracking
2. Location-Based Marketing
3. CRM/Personalization
4. Assortment Planning
5. Fulfillment
6. E-Commerce Platform
7. Remarketing
2020
1. Scan and Go on Store Device
2. Scan and Go on Shopper's Device
3. Click-and-Collect Management
4. Chatbots
5. Space Optimization Analytics
6. Workforce Analytics
7. Shopper Tracking
2021
TOP 7 TECHNOLOGIES
FOR INVESTMENT TODAY, 2020 and 2021
Despite initial concerns about the high cost of deployment, grocers have fully embraced delivering omnichannel capabilities to their customers. The reason? Over the past five years 91% of grocers report an increase in omnichannel expectations among their customer base. This figure is high enough to convince even the most reluctant grocer that the time to adapt is now.
In grocery retailing, omnichannel capabilities link digital shopping to the store, as opposed to linking to a DC or warehouse. A big majority of grocers (60%) today offer some form of home delivery for items ordered online. Of these, 42% offer a free delivery option.
While home delivery is the epitome of convenience, enticing shoppers to pick-up their digital orders in stores is still the most cost effective fulfillment option and one that also produces incremental sales made by shoppers making impulse purchases or buying extra items during their store visits. Currently, 40% of grocers offer Click-and-Collect services. Some grocers are even experimenting with such options as Curbside Pickup (25%) and Pickup Lockers (13%).
of grocers report omnichannel customer expectations have increased over the last five years with 43% saying they have increased greatly
91%
60%
46%
42%
42%
40%
Home Delivery
Ship From Store
Fast Fulfillment
Free Delivery
Click-and-Collect
Top 5 Omnichannel Services Offered
Advanced Inventory Management
Workforce and Web Technologies
Grocers can’t afford to tie up valuable capital in inventory. The moment a grocer takes possession of inventory it begins to lose value. Another key moment occurs when a product is out of stock, which delivers the worst possible experience to a shopper who wants to buy it.
Over stocks and out of stocks are the twin peaks of bad inventory management and both are costly. Which is why grocers are focusing on advanced inventory management technologies to ensure they are optimizing processes in a way that is best for the customer and best for the grocer.
Real-time (or near-real time) reporting
Computer vision to check on-shelf availability
RFID on cases, pallets or individual products
AI (advanced algorithms combined with big data)
Autonomous delivery vehicles
32%
21%
19%
15%
44%
45%
34%
46%
24%
34%
47%
39%
Machine learning (algorithms that deliver predictive/ prescriptive analytics and improve over time)
14%
14%
44%
14%
42%
72%
Strong
Interest
Medium
Interest
No
Interest
Interest in Testing or Investing in Emerging Inventory Management Technologies
At the top of the list of advanced inventory management technologies is
real-time (or near real-time) reporting, which requires implementing a
single-version-of-the-truth system that reduces product reporting from hours to minutes. A big majority of grocers (76%) are interested in deploying this technology with 32% saying they have a strong interest.
Two other advanced inventory technologies on the grocer’s wish list are computer vision to check on-shelf availability (67% are interested and 21% have strong interest) and AI (61% are interested and 19% have strong interest).
are interested in using a single-version-of-the-truth to produce real-time (or
near-real time) inventory reporting with 32% expressing strong interest
are interested in using computer vision to check on-shelf availability and of these 21% have strong interest
are interested in using AI
to improve inventory management with 19% expressing strong interest
have no interest in using autonomous delivery vehicles for last-mile fulfillment
have no interest in using mobile robots in stores to check inventory, however 25% have some interest and 12% have strong interest
have no interest in testing
and investing in automated DCs/warehouses using robotics, however 32% have some interest and 10% have strong interest
76%
67%
61%
72%
63%
58%
Recommendations
Successful grocers today with healthy balance sheets will be able to compete on price and make investments in technologies that are harder to match for those who are less financially healthy. The recommendations provided here will help sharpen the focus of grocers that want to make tech investments that will help them achieve business performance gains and match key moves made by leaders in the marketplace.
Increase technology firepower to match the
80% of grocers that plan to increase year-over-year tech budgets and 40% that plan
to increase 5% or more.
Invest in private-label product development
(29% of total sales) to differentiate from competitors and match a growing industry trend over the past five years (42%).
Begin testing Scan and Go technologies to prepare for grocers that will roll them out within two years on Customer Devices (34%) and on Retailer Devices (31%).
Invest in analytic tools to outpace competitors that seem to have a surprising lack of interest. Focus on In-Store Shopper Tracking (32%) and Space Optimization (31%), which will meet (and in most cases) surpass competitors over the next two years.
Avoid tying up capital and disappointing customers with over stocks and out of stocks. The best way to achieve this is through real-time (or near-real time) inventory reporting (76%).
Upgrade merchandise management tools to match those who have either started a major upgrade or will begin one within 12 months for Assortment Planning (50%) and Category Management (47%).
Planned Upgrade Within 2 Years
27%
Mobile Workforce and/or HR Applications
Started Major Upgrade
26%
Planned Upgrade Within 2 Years
28%
E-Commerce Platform
Focus on technologies that monitor stores for greater efficiency and profitability such as those that grocers have either started or will start within 12 months: Shopper Tracking (49%), Location-Based Marketing (40%) and Real-Time Store Monitoring of KPIs (39%).
Demographics and Methodology
This benchmark study of the grocery industry draws data primarily from regional and national chains. Data was collected in April 2019 from 60 respondents that hold executive positions within their companies that gives them significant influence on technology strategy, project selection and budgets.
Findings indicate the overall grocery segment continues to expand, which helps 83% report an increase in revenue over the past 12 months with only 7% reporting a decrease in top-line results.
As a result of growing sales, increasingly fierce competitive demands, and the rise of omnichannel shopping, grocers are responding by upping the ante in technology spending. A big majority of 80% say they will increase tech spending year-over-year and of these 40% plan to increase tech budgets by 5% or more.
Number of Stores
Annual Revenue
Revenue Change Last 12 Months
Year-Over-Year Technology Budget
37%
10%
8%
17%
8%
20%
>500
<10
10-49
50-99
100-249
250-499
42%
8%
19%
17%
14%
>5 Billion
<100
Million
$100 Million - $249 Million
$250 Million - $999 Million
$1 Billion - $4.9 Billion
7%
50%
Increased .1%-4.9%
Decreased
17%
No Change
3%
Decreased
30%
40%
Increased .1%-4.9%
Increased 5%-9.9%
CLICK HERE TO Receive a PDF of all the charts used in this study.
Note that this offer is only available to retailers using a corporate e-mail address.
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2019 GROCERY
TECH TRENDS STUDY
Race for Competitive Advantage
2019 GROCERY TECH TREND STUDY SPONSORS
PRESENTED BY
1.
3.
2.
4.
5.
6.
7.
10%
Increased >10%
18%
Increased 5%-9.9%
10%
No
Change
15%
Increased >10%
Revenue Strategy
Store Technologies
Merchandise Management and Supply Chain
Analytic Technologies
Workforce and
Web Technologies
Omnichannel
Advanced Inventory Management
Real-time (or near-real time) reporting
Computer vision to check on-shelf availability
RFID on cases, pallets or individual products
AI (advanced algorithms combined with big data)
Autonomous delivery vehicles
Real-time (or near-real time) reporting
Computer vision to check on-shelf availability
RFID on cases, pallets or individual products
AI (advanced algorithms combined with big data)
Autonomous delivery vehicles
Real-time (or near-real time) reporting
Computer vision to check on-shelf availability
RFID on cases, pallets or individual products
AI (advanced algorithms combined with big data)
Autonomous delivery vehicles
Real-time (or near-real time) reporting
Computer vision to check on-shelf availability
RFID on cases, pallets or individual products
AI (advanced algorithms combined with big data)
Autonomous delivery vehicles
Autonomous delivery vehicles
AI (advanced algorithms combined with big data)
RFID on cases, pallets or individual products
Computer vision to check on-shelf availability
Real-time (or near-real time) reporting
Machine learning (algorithms that deliver predictive/ prescriptive analytics and improve over time)
32%
44%
24%
21%
45%
34%
19%
34%
47%
46%
39%
15%
14%
44%
42%
14%
14%
72%
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Movista is transforming how work gets done in retail. Founded by industry veterans who experienced the challenges of managing distributed workforces, Movista created the leading enterprise platform for flawless in-store execution and performance. The Movista platform integrates or replaces a multitude of disparate systems into a single user-friendly, mobile interface.
