3 ways to build a culture of innovation

Change is afoot and grocers need to be ready to compete

Grocers are bidding farewell to a year that arguably saw more technological advancements than ever before – from increased adoption of artificial intelligence and robotics to gigantic deals such as Amazon buying Whole Foods Market or Target purchasing Shipt, transactions that further blend brick-and-mortar with e-commerce.

But if so much can happen in one year, there’s nothing stopping 2018 from bringing even more shock and awe on the technology front in grocery retail. If they want to be positioned for swift and smart action, grocers must create and nurture a culture that embraces innovation and the challenges that come with it.

According to several grocery experts, this can be done by:

Creating a customer-centric culture
Today, being customer-centric means delivering personalized experiences for shoppers who expect as much from their grocers. Those grocers that aren’t personalizing risk losing customers to their competitors that are, according to Beth Curran, director of retail strategy at Oracle Data Cloud.

“Personalization should be holistic and seamless, with the customer always in mind,” she says. “Retailers must continuously rationalize offer strategies, pricing strategies, content and digital reach in order to maintain a relevant and impactful conversation with their shoppers. Utilizing multiple personalized tactics allows a retailer to strengthen its brand, deepen shopper loyalty and increase sales.”

Effective use of shopper data, combined with additional insights such as proximity to a competitor’s store or shopper lifestyle, allow retailers to target their most loyal and lucrative shoppers with an experience that matters to them, Curran says.

Ken Fenyo, head of consumer markets for consulting firm McKinsey Fast Growth, adds that when developing a customer-centric culture, grocers must start from the top if they want to be effective. Senior executives, led by the CEO, must ensure the organization is delivering value to its customers every day.

Developing relationships with startups
A wide range of technologies are disrupting the grocery industry including mobile, artificial intelligence (AI), virtual reality (VR), augmented reality (AR), the Internet of Things (IoT) and robotics. However, few, if any, grocers have the resources and talent in-house to take advantage of these technologies, Fenyo observes. To better compete, grocers need to build a portfolio of relationships with startups to drive revenue and reduce costs.

“Some of these startup relationships could be focused on near-term needs – for example, partnering with ecommerce companies such as Instacart and Deliv” for a last-mile solution, he says. “Others could be more far-reaching and transformational, such as creating fully automated fulfillment centers leveraging AI and robotics, or using IoT to provide real-time pricing, offers and advice to shoppers in-store.”

Taking a test-and-learn approach
Grocers haven’t typically been fast movers when it comes to developing technology solutions, often taking years to do so. But with the fast pace of change in the industry, they must move much, much faster by adopting a test-and-learn approach to new technology.

Rather than investing in a small handful of large projects, grocers should create and pilot multiple ideas at a time, Fenyo recommends. Whether these pilots are online or in-store, grocers can quickly scale winning concepts and kill or re-engineer ones that aren’t gaining traction.

A version of this article originally appeared at ProgressiveGrocer.com.

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