Category Archives: Process improvement

Albertson Companies Leveraging Tech to Engage Customers

A recent SupermarketNews article reported that Albertsons Companies, operators of over 2,200 supermarkets, has launched a consumer loyalty and shopper rewards program using the app Fetch Rewards. The new program’s goal is to increase customer engagement levels and to extend the reach of its customer rewards.

The app will enable Albertsons to extend exclusive, individualized offers from its family of stores.

The article quoted Usman Humayun, vice president of digital marketing at Albertsons, who said, “We’re constantly looking at innovative and relevant ways to engage with our customers, and after seeing such strong results, we decided to expand the Fetch Rewards pilot to additional stores. This relationship is a win-win for our company and for our customers who use Fetch to earn rewards on grocery, retail and restaurant purchases.”

This is another good example of how retailers can leverage technology to provide greater levels of customer interaction and value. If our research and experience are on target, the fact that this type of program allows for “individualized” messaging and marketing will significantly increase its impact.

Read the full article…

What Supermarkets Can Learn from C-Stores

Several of our posts have focused on the importance of innovation and the customer experience, and how retailers must make continuous improvement in these areas a priority. Along those lines, a recent SupermarketNews article shared some interesting insights on the significant success the country’s 153,000+ convenience stores (c-stores) have experienced due to making ongoing improvements via “digital transformation.”

The piece quoted Scott Langdoc, a strategist specializing in the grocery chain, drug, and convenience/fuel retailing segments at Amazon Web Services, who said, “By focusing digital transformation efforts on supporting emerging customer journeys, optimizing product and service offerings, and prioritizing efficiency of retail operations, c-store retailers are working with Amazon Web Services (AWS) to double down on innovation while recovering revenue and attracting new customers.”

The article went on to explain the different product fulfillment expectations at c-stores, which include fuel fill-up, basic snack and beverage purchases, buying prepared foods like pizza or sandwiches, a quick errand for a household necessity or a combination of those scenarios.

Langdoc also noted that, more frequently, customers expect a personalized experience regardless of how or where they engage in the c-store.

Examples given included:

  • While a customer pumps fuel, they order a slice of pizza at the dispenser via a voice-activated order system and use their mobile phone to pay for both the pizza and their fuel.
  • A shopper buys a fountain drink in a store and gets a personalized discount to buy fuel as an incentive because the customer hasn’t purchased fuel at that station in the last month.
  • A customer grabs the items they want to buy at an Amazon Go store and walks out without having to stand in line to pay at a traditional cash register.

The Bottom Line
While recognizing that fuel remains the top selling c-store product category, the article concluded by suggesting, “in-store product sales and an extensive prepared food menu represent the largest overall sales growth categories, and on average, they are the biggest contributor to overall gross profit.”

Therefore, retailers should focus on capturing the broadest spectrum of transaction details possible and applying the analytics and machine learning to generate hyper-accurate predictions of future demand.

“This transaction detail can help optimize category plans, profitable private label assortments, high-selling menu offerings, and better in-store stock availability,” the article said.

Read the full article…

Supermarkets Leveraging Technology & Innovation to Make Continuous Improvements

Recent Progressive Grocer articles have highlighted a variety of examples of how supermarket chains are leveraging technology and innovation to make ongoing improvements in operations and the customer experience.

For example, Save Mart Cos., based in Modesto, Calif., is investing in robots that automatically audit store shelves to ensure that products are stocked and in the right location. The initiative involves a partnership with Simbe Robotics of San Francisco. The robots, named “Tally,” will first be deployed in seven stores. They are able to scan up to 30,000 products a day, helping retailers “reduce out-of-stocks by up to 30% and redirecting store staff to personally interact with shoppers.”

flex postAnother example of innovative thinking in response to shifting consumer shopping habits involves new products designed to improve curbside pick-up, which many industry leaders believe is here to stay. FlexPost® helps retailers manage traffic and keep people safe during curbside pickup trips. These flexible signposts and bollard systems can claim to reduce parking lot repair and maintenance costs, and also minimize the impact of minor collisions with customer vehicles.

Finally, in honor of Earth Day a number of organizations have come out with announcements this week about their sustainability efforts, ranging from waste reduction to regenerative farming to net zero energy use.

Among those we found most interesting are:

  • Four Stop & Shop stores in Massachusetts are piloting a Flashfood mobile app that shares sales pricing on perishables that are close to their best-by date. Stop & Shop has a goal of reducing food waste by 50% by 2030.
  • Given concerns about package waste associated with home delivery services, HelloFresh reported this week that it is teaming up with Pratt Industries to switch to cardboard packaging made of 100% post-consumer recycled content for its HelloFresh and EveryPlate meal kits. The company estimated that the move will help reduce GHG emissions by 6,800 tons and save more than 115,000 trees a year.
  • C&S Wholesale Grocers outlined several areas in which the company is preserving the environment, working to eliminate waste and reducing its carbon footprint. Among those sustainability steps, the C&S reports that it is improving fuel efficiencies in its fleets, including piloting trailer reefers on zero emission technology and tractor fleets on non-fossil fueled power in key markets.

Tech-Driven Improvements an Emerging Trend in Supermarkets

The mounting demand for e-commerce due to COVID-19, and the expectation that it will be necessary to continue offering many of the “new normal” services post-COVID, has resulted in a number of grocery chains making major changes to their infrastructure and improvements in their processes.

As reported by SupermarketNews, some of the process and facility enhancements include:

  • Conversion of store or shelf-space to accommodate online order fulfillment
  • Creation of automated micro-fulfillment centers (MFC’s) to support automated fulfillment for grocery delivery, sometimes referred to as “dark stores” since they have no retail space
  • Curbside pickup
  • Installation of automated pickup points, enabling customers and delivery personnel to drive up, scan a code and retrieve their orders

The expectation is that those retailers who are able to convert store space or operate MFC’s will be better able to scale their business as the demand for e-commerce continues to grow.

“For grocers to adapt and stay relevant — and for consumers to eat the cost of the last mile — grocery retailers need to embrace curbside pickup,” said Rob Wilson and Shang Saavedra in a recent report from L.E.K. Consulting.

“Given that stores are designed for optimal in-store shopping, it’s often inefficient for staff to wander through aisles to assemble orders and, when it comes to operating margins, far from sustainable. Moreover, stores have been forced to quickly create online pickup areas, leading to messy front-of-store experiences for consumers.”

Clearly the costs associated with some of the major changes such as building stand-alone MFC’s favor the larger retailers. One possible solution for smaller chains might be the use of “solution partners” to get the job done.

Either way, and as noted in a recent SupermarketNews article, all indicators say that online grocery shopping and curbside pickup are here to stay.

Is Your Supermarket “Digitally Mature?”

A recent study by digital insights firm Incisiv named BJ’s Wholesale Club, Publix, Brookshire Grocery, Target and Costco Wholesale among the nation’s most “digitally mature” grocery retailers, according to a recent SupermarketNews article.

Incisiv defined digitally mature grocery retailers as those that “invest in their front-end shopping platform as well as back-end integration, fulfillment, customer service and operational excellence to deliver an optimal, end-to-end customer experience.”

As technology continues to march forward at an increasingly rapid pace, it will be interesting to see if the process enhancements also enhance customer engagement.

Innovative Improvements Continue to Emerge in Supermarkets

PREPARING FOR THE “NEW NORMAL”

Today’s Wall Street Journal reported that Koninklijke Ahold Delhaize NV is accelerating development of a robotic cleaning arm to help workers clean stores and process orders more effectively due to the COVID-19 pandemic.

“All the researchers said this Covid situation is so urgent, we see a direct application for our work right now because there’s scarcity of people who can work in stores,” said Bart Voorn, Director of Data, AI, and Robotics.

Of course the grocery giant is only one of many organizations taking innovative steps to initiate improvements in how the operate.

The article quoted Paul Daugherty, Accenture PLC’s group chief executive for technology, as saying, “Hyper automation is coming. We have now only automated 15 to 20 percent of what we can do.”

As noted in previous posts, necessity is, indeed, the “mother of invention” in supermarket chains across the globe; and combining technology with tried-and-true process improvement methodology is the likely path toward preparing for the “new normal” in food shopping.

Necessity & Innovation

Nearly everyone we ask says that they want to be innovative — the best returns come to those who are first to market with a new product; those who innovate new and better processes can provide much better quality at much lower costs; those who can create a management system or culture that constantly is clicking on all cylinders can have a powerful advantage.

But how often do they happen, and why?

In our experience and research, we find that innovation is truly enigmatic:

  • Large organizations have more wherewithal to invest in systematic innovation, but smaller organizations seem more capable of capitalizing on innovative ideas.
  • Most innovations come not from visionaries at the top but from people closest to the work. Yet paradoxically, strong leadership and vision at the top of the organization are required to create an environment that fosters innovation and risk taking. Without strong leadership, organizations become bureaucratic and risk-averse.
  • Outsiders often have the most innovative ideas, but insiders’ know-how and buy-in are required to get them implemented.
  • And possibly most relevant during the current pandemic, adversity or “necessity” often brings about innovative solutions.

A recent SupermarketNews article notes that current world challenges have been exceptionally tough for supermarkets, and that the associated difficulties have brought about significant and innovative improvements in how stores are being run… now and possibly in the future!

“The first hint of the virus reaching our communities ignited the shock of an overwhelmed supply chain,” said Randy Evins, Senior Principal and Industry Advisor.

“A couple of weeks later, the consumer experience was further diversified with online pickup services, home delivery and special hours reserved for vulnerable shoppers. Some local grocers have also installed plexiglass protectors around their checkout stations and added floor markers to help ensure shoppers are standing six feet apart while waiting in line.

“There’s unquestionably a lot of ingenuity happening in supermarkets right now. But there is one area of the business that still requires attention — especially if grocers want to continue surviving this constantly evolving time as well as the eventual rebound to come.”

The article goes on to stress the importance of leveraging digital technology to ensure that all variables are considered in “real time” when making inventory management and ordering decisions.

“Digital strategies must go even deeper to cover the entire value chain — addressing the need for connected processes, real-time transactional data and immediate visibility into store-level inventory,” Evins said.

“Supermarkets can no longer afford to order new products and additional inventory blindly. They need to know what is available on their store shelves, store backrooms and distribution centers — by SKU and quantity and in light of forecasted demand.”

In support of this perspective, the article cites predictive data indicating that 25% to 30% of a grocer’s sales volume will consist of digital orders by 2025, compared to 6% to 10% today.

Evins went on to say that the use of technology, as described, will enable store employees to “have the visibility and insight they need to work more efficiently, safely and productively while keeping consumers happy and coming back over and over again.”

Certainly, given today’s circumstances, necessity has truly been the “mother of invention.”

Read related newsletter…

Supermarkets Offering Innovative Improvements & Solutions

Necessity is the mother of invention, the adage says. Certainly, we’ve seen many examples of innovative thought and practical improvements put in practice in supermarkets throughout the U.S. during this pandemic.

For example, to promote social distancing, H-E-B was among the first to offer its customers a deal that to keep them out of lines and away from large crowds. Their stores across Texas provided free, next-day curbside ordering and pharmacy deliveries to help slow the spread of COVID-19.

“We are working diligently to provide solutions for seniors and Texans in need to access food and supplies with limited public interaction,” the company wrote.

They and many others also shortened store hours to better serve customers and to give team members more time to restock more quickly-depleted shelves, thus increasing product availability.

Stop & Shop was among the first to offer designated shopping hours for seniors, a step taken to help create a safer and more comfortable shopping environment for those most susceptible to the virus. Many have followed…

Albertsons was the first major company to announce they will install plexiglass “sneeze-guard” barriers at checkouts in its 2,200 stores… Walmart and Kroger have made similar commitments… Whole Foods also confirmed it’s in the process of rolling out sneeze guards at all locations to protect customers and Team Members at the registers.

Additional examples of best practices and suggestions were recently shared by the The Brookings Institution, a nonprofit public policy organization based in Washington, DC that conducts research into new ideas for solving societal problems. Among their recommendations are the following, which many supermarkets have put into practice of their own accord:

“Employers need to implement immediate steps to reduce grocery workers’ exposure to COVID-19 by expanding access to personal protective equipment (PPE) such as masks and gloves and end any restrictions on workers wearing them. While supplies of protective masks and gloves are extremely limited across the country, employers and policymakers should prioritize PPE for grocery workers as they become available.”

“Employers should provide adequate cleaning supplies and hand sanitizer, regular opportunities for workers to wash their hands, and frequent equipment cleaning.”

“Stores should shorten hours and limit the number of customers at any given time.”

“Grocery stores should implement additional measures to protect workers and enforce safe spacing of customers.”

SpartanNash Reducing Food Waste & Enhancing Customer Service with Flashfood

An earlier post featured SpartanNash for leveraging technology to enhance their online and order pick-up processes. Today we once again focus on the company as they have launched an innovative program to reduce food waste while enhancing customer service.

According to a recent Progressive Grocer article, SpartanNash is piloting a Flashfood mobile app at five of its West Michigan Family Fare stores, allowing customers to purchase meat, produce, seafood, deli items and bakery products that are nearing their “best-by” date at up to 50% off.

As you may know, Flashfood is a Toronto-based mobile app that operates in more than 440 grocery locations throughout Canada and the US.

After downloading the Flashfood app, customers can select a participating Family Fare store, choose items, pay for them directly on the app, and then pick up their items at the store’s customer service counter, where the purchased items are stored in refrigerators.

“Customer convenience is key with the app,” said Matt Bennett, Director Retail Consumer Innovation at SpartanNash. “This app is a win-win for customers and the environment.”

Read the full article…

Tech Driving Customer Experience at SpartanNash

SpartanNash is leveraging GPS location technology to improve curbside service in its Fast Lane online grocery pickup program. According to a recent SupermarketNews article, a number of the chain’s locations are now using Radius Networks’ location-based FlyBuy Pickup service with ShopperKit’s in-store grocery fulfillment software to bring out Fast Lane orders to customers as soon as they arrive at the store.

Referenced as a “click-and-collect platform,” the process begins when a customer places a Fast Lane curbside order. The order is fulfilled and the customer is notified when their groceries are ready for pickup. The customer can then share their location via mobile apps or a web browser to let their Fast Lane personal shopper know they’re heading to the store. That allows customers’ orders to be prepared and delivered to their vehicles the moment they pull into the pickup area.

“This new technology will completely change our customers’ experience with Fast Lane,” said Brian Holt, vice president of marketing for SpartanNash.

“Fast Lane already provides exceptional customer service, with overall satisfaction scores 30 points higher than the national average, as well as some of the nation’s leading fulfillment rates. And our new GPS location technology will only improve the ease and speed of the Fast Lane experience.”

This is another good example of how today’s supermarkets are leveraging technology and continuous process improvement to drive customer service and the shopping experience.