Are You Ready for the Future of Retail Technology?
Although the digital revolution has marched forward across all industries, grocery retail has been one of the last sectors to evolve and integrate updated technologies. With the arrival of a global pandemic in 2020, the consumer demand for flexibility and convenience has only accelerated, and the options have become crystal clear for brick-and-mortar grocers: embrace retail technology or risk being left behind.
At the core of this retail evolution is increased demand from consumers for a convenient, seamless, and harmonized commerce experience (also known as the Amazon effect) that integrates online and in-person shopping.
Over the past decade, the tools and technologies available to retailers have expanded significantly and successful retailers know it’s not enough to only deliver convenience or great deals. Customers expect a highly personalized, digital-first, and connected shopping experience that meets them where they are at and engages them at all stages of their buying journey.
The Importance of a Digitally-Connected Shopping Experience
A connected digital experience necessitates the best of both worlds: the ability to enjoy a first-rate shopping experience both online and in-store. Equipped with this cohesive ecosystem, retailers are well positioned to reap the benefits of long-term customer loyalty, as those shoppers who engage with a retailer online, in-app, and in-store typically spend the most and remain most loyal. The challenge for brick-and-mortar retailers, then, is attracting and retaining a loyal customer base, amid the challenges of rising inflation, ongoing supply chain disruptions, and inventory imbalances.
The grocery delivery industry also continues to be a competitive marketplace. While Amazon’s grocery sector expands and grocery delivery services like Instacart and Go Puff gain traction, digital evolution is not only inevitable—but necessary for survival. In fact, online grocery is projected to make up 20% of the U.S. grocery market by 2026.
In the years to come, the brick-and-mortar grocers that come out on top will embrace retail technology in an effort to accommodate the evolving needs of their customers—prioritizing digital optimization, retail personalization, and loyalty programs in the process. The time is now and the most important question remains: are you ready to elevate your business with a digital retail media platform?
The Evolution of Retail Technology
Thirty years ago, only 15% of Americans had a computer—and even fewer had internet access. But the evolution of retail technology begins even before the advent of the Internet, with the development of the following landmark technologies and advancements throughout retail history:
- 1960s: The first electronic cash registers are invented, streamlining retail payments
- 1962: Big-box retail begins, when the first Walmart opens followed by Kmart and Target
- 1974: Bar codes are introduced, revolutionizing inventory tracking and simplifying the checkout process
- 1985: Infomercials emerge as a means of promoting retailers
- 1994: Online shopping is born, and Pizza Hut starts selling pizzas online through their “PizzaNet” portal
- 1995: E-commerce pioneer Amazon launches its online bookstore and sells its first book
- 1997: Coca Cola introduces mobile payments in select vending machines
- 1999: Online shopping starts to grow, and brick-and-mortar retailers see their online sales double to $20 billion
- 2007: Social media redefines the retail landscape, as Facebook extends beyond personal pages to business profiles
- 2011: Shoppers are nostalgic for their local brick-and-mortar stores, returning in large numbers to the aisles
- 2013: “Omnichannel” becomes a relevant retail term—and Nordstrom becomes a leading omnichannel retailer
- 2014: Apple Pay is introduced, advancing the need for more mobile payment methods
- 2015-2020: Social media continues to grow at record pace. Businesses are selling and advertising their products across Instagram, Facebook, and beyond, while cloud-based technologies expand the horizon of managing data remotely. Cryptocurrency platforms like Bitcoin gain more traction. The retail technology wave is well underway.
- 2020: With the arrival of the pandemic, retailers must consider how they bring customers—and revenue—through their doors. This leads to more strategic thinking around funding retail technology like mobile apps, data analytics, and more.
- 2021: Retail technology takes off—with funding reaching a record breaking high of over $100 million. Leveraging first-party data analytics is among the strategic priorities for future growth.
- 2022: Today, research shows that U.S. retail e-commerce sales will grow 16.1%, reaching $1.06 trillion in 2022. This growth was already underway, but the shift to online shopping and digital transformation during the last two years has rapidly accelerated because of the pandemic.
With today’s shopper spending five or six hours a day on a mobile device, it’s important that brick-and-mortar grocers consider the full shopping experience, which often begins long before someone enters a store. In fact, a GE Shopper Research study found that 81% of shoppers research their product online before purchasing.
Despite this information, consumers don’t exclusively rely on an effective online experience to drive their shopping behaviors or decisions. In fact, in-store shopping is as popular as ever. For example, 61% of shoppers prefer to purchase from brands that provide physical store locations vs. those that have only an online presence. Their reasons include:
- Saving on delivery costs
- Receiving products immediately after checkout
- Having access to direct customer service
- Benefiting from in-store discounts
However, once in-store, consumers do expect a digitally connected experience with the technology to match. One example is self-checkout, which has increased in retail locations by 20% since the beginning of the pandemic. 75% of consumers who have started or increased their use of self-checkout said they intend to continue using it, clearly demonstrating how retail technology has transformed shoppers’ experience—and is here to stay.
Defining Digital Transformation
Digital transformation refers to how businesses leverage retail technology to streamline and revolutionize their retail experience to deliver value to customers and remain competitive.
But why is this so important now? A Harvard Business Review study found that of 46,000 customers, 7% were online shoppers, 20% were in-store shoppers, and a whopping 73% relied on multiple shopping channels to make a purchase.
Now more than ever, traditional ways of doing business that relied solely on the in-store experience don’t cut it. Today’s shoppers are hybrid, and they want to engage with your brand everywhere they can—from “brick to click”—meaning in your aisles, online, on your mobile app, and via social media. And often, shoppers want to engage with your brand in-app while cruising the aisles of your physical store at the same time.
What Do Today’s Shoppers Expect from Retailers?
While 90% of transactions still happen in-store, bridging the gap between the in-store and in-app experience will be the only way to truly own the digital customer relationship, earn customer loyalty, and stay relevant throughout the entire shopper’s journey. The benefits of this omnichannel experience are twofold: meet (if not exceed) customer expectations and grow your business.
There’s no denying that omnichannel shopping is the future. Retailers can leverage the advantages of having a physical brick-and-mortar store and a digital presence by providing their customers with a heightened, seamless shopping experience through multiple channels.
This is especially true as shoppers continue to go digital. 9 out of 10 supermarket shoppers use their smartphones in-store—up from 67% in 2015. Mobile shoppers use their devices to:
- View store circulars
- Access digital lists
- Place online orders
- Locate products in the store
- Participate in loyalty programs
- Redeem coupons
The increased reliance on mobile isn’t a passing trend as it becomes increasingly popular with the rising generations. Today’s brick-and-mortar grocers must consider how to embrace mobile as more than just an extension of their digital presence. It’s the path forward for centering their business around a connected digital retail media platform that prioritizes a digital-first, omnichannel experience.
1. A mobile-first strategy
The retailers that win in a competitive market cannot underestimate the importance of reaching consumers where they are 24/7—on their phones. In a recent study from Heady, 57.5% of consumers surveyed claimed that mobile apps are more convenient than other channels for shopping.
Why? Mobile apps engage consumers from the very beginning of their shopping journey in the pre-purchasing phase (when they’re on the couch at home), right until the moment they make a purchase in-store. In fact, 82% of shoppers say they consult their phones first on purchases they're about to make in a store.
By connecting the digital experience in-store with a reliable and intuitive mobile app, retailers are able to meet consumers where they are and drive purchase decisions in real-time—delivering relevant and personalized deals at the right time.
2. A personalized shopping experience
The brick-and-mortar retailers that successfully compete in today’s market also know how to digitally connect with their customers—and are able to do so by leveraging a powerful combination of personalization and first-party data. According to McKinsey surveys, 80% of customers want personalization from retailers—and they’re willing to exchange personal data in order to receive more relevant offers matching their interests and purchase habits.
With first-party data, retailers can track shoppers’ individual habits and preferences, knowing that consumers have consented to giving their information, and deliver unique suggestions, promotions, and savings. This in turn encourages more return trips, higher basket size, and greater loyalty—considering 78% of consumers reported personalized content made them more likely to repurchase.
3. A powerful digital loyalty program
Today, a loyal customer relies on you to learn about new products, find discounts, and streamline their shopping experience in-store and online. And these loyalty programs are increasingly popular—in fact, loyalty program membership continues to rise year after year, with 3.3 billion loyalty memberships in the U.S. currently
As retail giants like Amazon and Kroger have proven, a perfect blend of personalization, rewards, and digital optimization are the essential elements to creating a successful digital retail loyalty program. And the payoff for retailers is clear: loyalty program members spend 66% more than non-members.
Now Is the Time to Embrace Retail Media
To meet the evolving needs of consumers and deliver on the above needs, retailers need one, comprehensive digital hub to make it happen. That’s where a digital retail media platform comes in—to streamline the process of creating an omnichannel experience and help retailers keep up with competitors.
Retailers (especially brick-and-mortar grocers) who can successfully connect digital with in-store are able to:
- Compete with other retailers. The biggest names in the market aren’t the only ones who can provide customers with the personalized, connected experience they keep asking for (including an effective mobile app, retail personalization, and loyalty programs) – now you can too.
- Increase basket size and revenue. Shoppers want to feel seen and understood as individuals with unique preferences, and they want to receive savings and promotions accordingly. The proof is in the data: for example, retailers using a Swiftly-powered digital retail media platform have seen 1 billion coupons clipped, 40% increased basket size, 40% more trips to the store, and a 10% increase in store sales.
- Strengthen customer loyalty. By investing in a seamless mobile and in-store experience, consumers are able to choose which channel is most convenient for them at that moment, and this personalization, consistency, and freedom of choice breeds trust and loyalty. Paired with an effective loyalty program, you’re set up for success—79% of consumers report they are more likely to continue doing business with a brand that has a strong loyalty program.
- Succeed in the face of today’s retail challenges. Learn to thrive amidst rising inflation, supply chain issues, third-party delivery services, and more. With retail technology tools like intuitive product catalog navigation and endless aisle marketplace available in-app, you can prepare shoppers for inventory availability ahead of time, help them save on products they regularly buy, and continue demonstrating you care about their individual needs during a tumultuous period in the industry.
Ready to Begin Your Digital Transformation with Swiftly?
Evolving with retail technology is no longer an option—it’s time. Don’t wait to get ahead of the curve, instead ask yourself: are you ready?
With Swiftly, embracing digital transformation doesn’t have to be daunting. Swiftly has the platform and solutions to help you thrive and grow in today’s digital-first world. As a true technology partner, we provide the retail platform, mobile platform, retail media, insights and analytics in a simple out of the box model to help you get started quickly. Get in touch so that we can help you fuel your long-term success amid this ever-evolving digital media landscape.