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The 2022 Innovation Outlook
Grocery is changing faster than ever! The combination of technological innovation, shifting shopper preferences and new pandemic behaviors offer opportunity in 2022.
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Every aspect of grocery has been touched by technology. From how products are grown, harvested, transported, packaged, merchandised, and marketed, to how stores operate, integrate digitally and data is leveraged to optimize decision-making. Progressive Grocer’s annual innovation outlook offers a practical look at the pervasive impact of technology and overarching consumer trends. Here’s EIGHT areas of action that should be on every grocer’s innovation agenda for 2022.
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Sustainability
The focus on sustainability is getting stronger and more expansive. Retailers and CPG companies in 2022 will deepen existing commitments and find new areas to view operations through a lens of sustainability.
Packaging is a priority. Plastic is under attack as the grocery industry looks to eliminate waste.
Food waste is a focus too. Less waste equals improved profits and a stronger customer connection.
Carbon neutral/net zero is the new normal for tomorrow’s winners.
Retail Operations
Signing bonuses and pay increases became the norm in 2021. But now what? Increased labor costs have altered the expense structure of retailers who are employing new strategies to increase employee engagement and productivity.
Burnout is real which means retention will be key in 2022.
New enticements will become commonplace, especially training and tuition.
Advancement potential remains key to attracting and retaining top talent along with new ways to find flexibility.
Store Experience
Store traffic is back, ensuring it sticks around requires new ways of thinking about the store experience. New technologies and innovative partnerships will re-energize physical spaces in ways that make them magical.
From differentiation to retention, innovative features are essential to elevating store experience.
Unique partnerships are gaining traction, think Target/Ulta, Hy-Vee/DSW and Kroger/Bed Bath and Beyond.
A sense of theater, whatever form it takes, is essential for elevating in-store engagement.
Shopper Engagement
An abundance of data makes targeting shoppers easier, but evolving privacy regulations present new challenges. Data stewardship and privacy matter to consumers — and federal regulators — which is why retail media will be the hottest space in marketing in 2022.
Retail media is poised to grow to $50 billion in 2022, according to Forrester.
Every retailer needs to be in the game or risk losing out on suppliers’ shifting ad budgets.
Data integrity will grow in importance because shoppers want to know information they share is safe.
Supply Chain
Innovation abounds in the supply chain, especially in the middle mile and last mile of transportation and order fulfillment. Autonomous pilots are advancing and new business models are gaining steam to disrupting traditional approaches.
So-called “instant-needs” companies are everywhere and growing, think Gopuff, Jokr, Buyk and Gorillas.
Advances in autonomy will be prevalent as pilot programs gain traction such as Walmart’s relationship with Gatik.
Terrestrial drones will be making more deliveries in 2022 as grocers seek to validate investments.
Ethical Eating
Whether it is the consumption of plant-based products, humanely raised conventional proteins or fair-trade certified goods, a fundamental shift in shopper behavior is intensifying. Retailers and brands will appeal to shoppers in new, authentic ways backed by transparency to drive shopper trust.
Americans are more aware of the origins of their food and eager to align with those who share similar values.
Plant-based products have gained new converts, but traditional protein shoppers have new expectations too.
Investors continue to be attracted to anything connected to the next big thing in grocery: ethical eating.
Foodservice at Retail
Restaurants roared back in 2021, but grocers have innovation, quality and affordability on their side. More effectively integrating prepared foods into e-commerce platforms is the way to win share of stomach.
Market share is there for the taking by grocers who offer prepared foods to shoppers who are already digitally engaged and looking for alternative meal solutions.
Grocers can win by tapping into favorable shopper sentiment toward foodservice at retail.
Restaurants may have rebounded, but Progressive Grocer research shows they are vulnerable to shortcomings around price and service.
Artificial Intelligence
Retail is a data driven industry and as data sets grow larger a key determinant of success in 2022 will be the ability of retailers to unify data from multiple sources and apply AI to make optimal decisions.
The proliferation of data from numerous sources in multiple locations has challenged retailers to make sense of it all.
The AI use case is well-established as a means of deriving actionable information from enormous data sets that now far exceed human capabilities.
AI will be used to optimize all manner of merchandising, marketing, operations and supply chain decisions and separate winners from losers.
Innovation extends to Shopper Expectations
Retailers executing strategies in these EIGHT innovation areas need to move fast. Shoppers certainly are. Progressive Grocer research in 2021 shows that shoppers' expectations continue to increase and grow more expansive thanks to technology, changing demographics, unprecedented access to information and shifting views of the role of business. Shoppers always expect more, and they expect different behaviors on the part of companies with whom they do business. That’s going to require an unprecedented level of innovation in 2022, and beyond.
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Tyson Fresh Meats is the world's leading supplier of beef and pork. We deliver a variety of the best meat products with consistent quality, every time. With decades of industry experience, we put a high priority on expert customer service. We've worked hard to earn the right to be called the Beef & Pork Experts .
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