Desperately seeking innovators

Canada’s grocery industry needs to start innovating, or risk being left behind

One has to wonder why Canada’s grocery industry lags the rest of the world when it comes to innovation. We’re still testing click-and-collect and home delivery while other countries appear to be much farther ahead in experimenting with virtual supermarkets, drone delivery and shelf-scanning robots.

On the merchandise side, innovative new products have a tough time just getting onto Canadian supermarket shelves. Meanwhile, SuperBrugsen, a grocery store in Denmark, is using a crowdsourcing app to allow its customers to suggest new and interesting products they want the retailer to stock.

Perhaps one reason why innovation is slow in Canada is that, until lately, there has been no pressure on our big retailers to do anything but what they’ve already been doing for years. But supermarkets must recognize they have an important role to play in both retail and product innovations.

Marion Chan of TrendSpotter Consulting recently wrote in a blog that “one of the crucial points of differentiation for retailers will be product assortment. Providing the consumer with more than just the most common brand choices is going to be key...To be known as an innovator and to build loyalty, a retailer will need to put a stake in the ground for what they stand for to get the consumer to make the journey to their store.”

She adds: “Unfortunately, manufacturers can’t innovate in isolation. Retailers have to be supportive and encouraging of the innovation.” Some of our large grocers’ supplier fees do not encourage innovation by manufacturers and, in fact, may act as deterrents.

One retail innovation that has grabbed attention is the virtual store. Tesco made waves several years ago when it installed large kiosks at U.K. subway stations with photos and UPC codes of hundreds of products. At these kiosks, the shopper need only scan the products they want with a cell phone and the order gets delivered to their home. Payment is made via the same cell phone. Tesco set up similar kiosks in Seoul, South Korea.

Then there’s China’s BingoBox, where large storefront kiosks are on wheels and can be moved to different locations. The kiosks contain actual products and automatically track by camera which products are taken and which ones are put back. Customers are billed automatically through their cell phones after a camera makes a final check of the order. There is no staff and no cashier.

This is the same concept used by Amazon Go, which has caused a stir in the grocery industry. Amazon Go’s launch was delayed when it was discovered the cameras it uses to track shoppers got confused when there were too many people in the store. Those bugs appear to have been cleared, and Amazon Go opened to the public in January. The 1,800-sq.-ft. automated Seattle store boasts no check-out. Shoppers need a cell phone and an app and they can “just walk out” of the store, with their items automatically being charged to the app.

Like Tesco, Jumbo in the Netherlands has also experimented with the virtual store, locating one at the busiest bus stop in the city of Utrecht. And Australia has created a robot called Shelfie that monitors shelves for out-of-stock or misplaced items and incorrect facings, reporting them to staff and to warehouse robots for immediate correction.

The world, it appears, is passing us by. Let’s step up our game now, before we’re left completely in the dust.

This article appeared in Canadian Grocer‘s February 2018 issue.

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