Vantiv Omnicommerce Tracker™ - February 2017
Using tech to track groceries
Every month, Vantiv and PYMNTS.com team up to deliver the latest news in omnicommerce. Here's an overview of the Omnicommerce Tracker™ published in February 2017.
Despite the momentum of digital commerce, brick-and-mortar stores remain popular destinations for American shoppers. And grocery stores are among the most popular. While other retailers have seen a significant shift to online commerce, in-store grocery shopping is expected to make up 80 percent of grocery shopping by 2020, according to a report from Nielsen and the Food Marketing Institute.
A 2016 report from the Food Marketing Institute indicates that shoppers visited grocery stores an average of more than once a week and spent an average of $107 per week. Despite all of the foot traffic, grocers continue to struggle with many of the same problems that hindered them for years, including inventory management issues. Grocery stores and supermarkets need to keep track of the large numbers of different produce and other perishable items that move on and off their shelves.
But omnichannel and unified commerce may have some answers. Microsoft recently debuted new solutions designed to help these merchants deal with their inventory challenges. February’s Omnicommerce Tracker features an interview with Brendan O’Meara, Microsoft’s managing director of worldwide retail, to discuss how technology is helping merchants solve these problems. O’Meara says that inventory management is one of the most important aspects of an effective omnichannel strategy because it provides shoppers with a consistent experience across all of a merchant’s channels — online, mobile and in-store.
O’Meara points out that one of the biggest inventory management problems that grocery stores and supermarkets face is ensuring that customers can find the items they’re looking for in a maze of different aisles and options. He points out recent developments in the space, including some that incorporate Internet of Things (IoT) technology, which can help show customers items and keep track of low- or out-of-stock items.
He said that other developers are working on smart shelves, which would help grocers know which of their items are selling. This can help them keep popular items on shelves for customers to purchase and prevent expensive overstocking or wasted products.
“With grocery, we have so many limitations understanding what’s on the shelves in terms of that on-shelf availability and also have to avoid keeping expensive overstock on merchandise”, O’Meara says. He highlights a company called ShelfEdge that uses Microsoft’s cloud analytics platform to help deal with inventory management issues. “[The platform] pulls information directly from the shelves on what’s in-stock or out-of-stock, and it can also act as a beacon and interact with a customer’s phone to show them where the product they’re looking for is [located].”
O’Meara also notes that while nearly all grocery stores and supermarkets struggle with inventory management issues, there is not a one-size-fits-all solution when it comes to keeping track of products and shelf space. Instead, supermarkets and other merchants need highly customizable solutions that can adapt to their and their customers‘ specific needs.
“It’s about delivering a personal and seamless experience for the customer,” O’Meara says. “But you need to have the right systems for your business in order to be able to deliver on that promise of a seamless experience. If it isn’t the right solution that fits what your business needs, it isn’t going to work.”
O’Meara notes that now more than ever, companies want to become worldwide businesses. In order to reach those goals, he says they’ll need solutions that can be customized to individual stores yet still work well in different kinds of stores or locations.
“The solution needs to have the flexibility to handle the needs of many different scales and work in many different types of retail environments. That kind of global capability is important to global retailers, and most retailers are becoming that, at least to some extent,” O’Meara says. He notes that this is especially important for grocers and other merchants that are beginning to offer online ordering or flexible pickup options. “Things like buy-online-and-pick-up-in-store don’t work unless you have the flexibility to see what is in a single store.”
With so many Americans still visiting grocery stores every week, innovations like these will likely continue to change the way modern supermarkets operate. And perhaps it won’t be long before grocery store inventory issues are a thing of the past.
Here are other notable developments covered in February’s Omnicommerce Tracker:
- Retail sales were higher than anticipated last year, according to the National Retail Federation. This was thanks in large part to a spike in online sales, which jumped from 7 to 10 percent in 2016. And more than $3 billion was spent by shoppers in the U.S. on Black Friday alone.
- Walmart is looking to make things easier for its online commerce subsidiary and recent acquisition, Jet.com. It acquired online shoe retailer ShoeBuy and its inventory in January for roughly $70 million in hopes of boosting Jet’s profile in the footwear space.
- New research from IBM indicates that 98 percent of Generation Z still prefers to shop in physical retail stores. And 62 percent of survey respondents told IBM that they still expect apps and websites from retailers to be intuitive and easy to use — or they may not log on at all. The survey also found that young consumers are less willing to share information about their health and wellness, location, personal life and payment information, with less than 30 percent of respondents saying that they would share those personal details with companies.
- According to a new survey from Episerver, 92 percent of consumers do not intend to make a purchase during their first visit to a retailer’s website. Instead, most customers are primarily looking to obtain information — 45 percent told researchers they’re searching for a product or a service, 25 percent compare prices or other variables and more than 10 percent are looking for information about physical stores. Based on this research, Episerver noted that retailers need to display clear, easy-to-access information about the products offered— 98 percent of shoppers have been dissuaded from making a purchase with a retailer because they found incomplete or incorrect information about a product.