No question that 2023 will usher in a new year of disruption and operational challenges for the grocery industry. But instead of putting the brakes on funding projects during uncertain times, grocers are poised to forge ahead with innovation initiatives in 2023. This is truly just the beginning of a wave of transformation in grocery, a torrent of innovation set to change the industry in a profoundly positive way.
Store brands have been in the spotlight lately as record inflation has taken hold of the U.S. economy. For 2023, expect to see continuous attention to this area of the business, especially as major food retailers, including Amazon, Kroger and Walmart, enhance their offerings to encompass the latest market trends.
Private
Label
7
Conscious
Consumerism
1
How do you keep a customer loyal when the path to purchase is more fragmented and dynamic than ever before? It’s all about customer experience and value right now.
Customer
Loyalty 3.0
2
The tight labor market over the past two years has caused grocers to rethink recruitment and retention tactics. One of the more notable approaches that has emerged – and promises to be a big topic in HR departments in 2023 – is the flexible workforce, in which employees have more input into their schedules, and employers provide more options.
Flex
Work
3
Innovative food retailers have fresh opportunities to distinguish their foodservice offerings and engender loyalty with restaurant-style meals, snacks and drinks. Grocers will be evaluating their menus to offer items beyond the usual fare; changing up formats and store design to make the in-store dining experience more satisfying; and promoting meal deals for busy, budget-conscious and discerning shoppers.
4
Retail media is changing the game for both retailers and the brands that advertise with them, and is gaining steam across the industry. Online storefronts and physical supermarkets have become prime venues for retailers to gain unprecedented ad dollars, and his segment that operates on very thin
Next-Gen
Retail Media
5
More than a “nice to have,” personalization has become an absolute must when it comes to connecting with today’s consumer. A recent collaboration of food and nutrition digital technology company Sifter and nonprofit organization FARE (Food Allergy & Education) has upped the ante on personalization, bringing it into the realm of potentially life-saving measures. Expect to see more such solutions that don’t just surprise and delight consumers, but also help them improve their lives.
Personalization
6
Sustainable Store Design
9
Over the past six months, the grocery industry has seen several examples of food retailers finally fully embracing social commerce as a way to drive excitement, engagement and loyalty among shoppers. Retailers such as Albertsons, Kroger, The Fresh Market, Walmart and Sam’s Club have all stepped up their strategies around shoppable content, video and livestreams as they look to capture more omni shoppers.
Social Commerce Explosion
8
The Zoomers of Generation Z
(68 million born 1997-2010) and the Alphas of Generation Alpha (2.5 billion born 2010-present) are poised to transform the way food retailers
Zoomers
and Alphas
10
The Year
Ahead
CONCLUSION
The top 10 innovations expected to transform grocery in 2023
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By Progressive Grocer Staff
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Over the past three years, grocery retailers have had to reassess and reinvent nearly every facet of their operations. The future of the industry depends on innovations that increase efficiencies, drive growth and create a next-gen grocery shopping experience.
PG’s annual Retail Innovation Outlook offers a practical look at how food retailers plan to focus their innovation value propositions on foodservice, private brands, social commerce, customer loyalty, store design, retail media, labor solutions, personalization, sustainability and consumer trends.
Foodservice
at Retail
margins is being empowered to leverage channels that improve operational efficiency and drive high-margin revenue.
Retailers that deliver authentic, meaningful value to shoppers by prioritizing personalization, customized deals and timely offers will win loyalty in this –
or any – competitive environment.
Trader Joe's inspires
loyalty through its exclusive product offering.
Online storefronts, as well as physical supermarkets, have become prime venues for retailers to gain unprecedented ad dollars.
Fine wines will continue to have a place
in the world of private brands.
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operate. And it’s not just because Zoomers and Alphas are spending a lot of time on Tik Tok. These groups also have sustainability top of mind. Retailers will be focused on this demographic because they will have the highest expectations of any generation regarding the products and brands they choose.
FLEX WORK
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Sustainability-minded shoppers are increasingly scouring grocery aisles in search of brands and products that provide environmental, social and economic benefits. Companies that share stories about the origin of their products, prioritize people over profit and provide transparency about their business practices will win these consumers and drive growth.
As more grocers commit to planet-saving policies, store design has become an important part of their sustainability strategies, along with sourcing practices, recycling initiatives and corporate responsibility actions. Much of this imperative is driven by current consumer attitudes: Retailer sustainability is a driving factor for shoppers worldwide. Grocers are looking to allow consumers to see their sustainability cred in action at store level, one location at a time.
The Year
Ahead
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