More local, more often: supermarkets must change with the times

Martin Smethurst
6 November 2014
The Guardian Business
As consumer habits change, the top chains are losing the battle for market share, but technology can help to keep shoppers happy
As Sainsbury’s chief executive Mike Coupe recently declared, retailers are facing a “perfect storm” of problems, from a revolution led by convenience stores and discounters. Industry body IGD forecasts that sales in small neighbourhood stores will increase by 31% to £49bn in 2019, with consumers shunning big weekly shopping expeditions in favour of smaller, more frequent local trips.
The days of the top four supermarkets controlling how shoppers buy their groceries are over. Convenience stores are already leading the way in understanding the latest shopper habits, for example, stores designed with the evening meal in mind. Shoppers are now more time-conscious and tech-savvy, and have more choice about where to shop. This means that supermarkets have to work even harder to keep loyal customers.
Instant decisions
Supermarkets must understand that the time between the decision to purchase and making the payment is getting shorter. It already happens in convenience retail. When a shopper picks up an item, such as a meal for the evening, they want to pay for it instantly rather than join a queue. Shoppers are used to making instant decisions, with up to 70% of purchase decisions made at the shelf. To adapt to this change, supermarkets need to start providing choice for shoppers on where and how they want to pay, rather than only providing traditional checkouts at the exit.
Apple Pay and Paypal have already launched mobile payment options that are entering US fashion and fast-food outlets. The next step is for supermarkets to embrace this technology. Launching in Asda and Sainsbury’s next year, Zapp is a mobile payment system that allows shoppers to use their mobile devices to pay for groceries at the checkout. To be even more convenient, mobile payment options should allow customers to skip the physical checkout if they are only picking up a few items, while still offering the option for a face-to-face interaction with a cashier.
Checkout innovations
The checkout experience is an area that most supermarkets look to target when improving convenience, with the vast majority now embracing self-scan technology. With customers becoming increasingly time-starved and queues still a bugbear, rapid-scan technology will continue to evolve. It’s something we’ve worked on at Wincor Nixdorf – a high-speed checkout that enables customers to place shopping on a conveyor belt, watch it pass through the 360-degree laser scanner and then pack it all up in one of two bagging areas.
Waitrose is also trialling the Hiku home scanning solution, where items can be scanned and added to an online shopping basket as they leave the fridge at home. Most supermarkets also now offer click-and-collect services as well, with online grocery sales up 17% on last year. It’s these innovations that give shoppers faster, more convenient options to complete their purchases.
Changes in staff persona
Staff adoption of technology is also key to providing a seamless experience for shoppers. Supermarkets are now dealing with knowledgeable customers who have researched what they want to buy before they browse in-store. Data could be used by staff to notify who their customers are and what they are looking for. With the rise of smaller convenience stores, we are going back to the shopkeeping persona of yesteryear: your shopkeeper would greet you by your first name, ask about the family, while knowing exactly what you came into buy.
Morrisons is close to replicating this community-led spirit with its marketplace that includes a specialist butcher, baker and fishmonger. Even though this is hard to achieve with the larger, multinational supermarkets, technology could be a big advantage. For instance, a screen could display a customer’s name as they enter or pay for an item, enabling staff to greet them. Alternatively, a staff member could be armed with a tablet and offer advice on recipes and meal suggestions. It is these subtle ways that enable larger supermarkets to still have a personable feel to their customer experience.
Understanding customers
Supermarkets are already gaining a lot of insight from customers through big data, but it’s the smaller details that help to offer a unique, personalised experience. With smaller retailers able to pick up on individual shopper preferences far easier than the big four, it’s new technologies that can help supermarkets become more personalised. Using the right data, beacons (positioned beacons that can alert personal devices when in range) can be used in-store to inform each shopper of personalised deals with suggestions to accompany the items they have already picked up. Targeted mobile notifications could be sent to suggest wine to go with cheese, for example, or accompanying items to complete dinner party recipes. Deals are there to be struck with the modern convenience shopper and data needs to be used wisely by retailers to influence the emotions of shoppers who are likely to make quick decisions as they browse.
Locating items
The classic supermarket layout is a daunting prospect for today’s shoppers, who spend less time in supermarkets and tend to go to more places to find a quick deal. The answer could be in changing the supermarket layout. Aldi has only six aisles on average compared to 30 in most supermarkets. To ease the shopping experience further, a downloadable mobile app could help shoppers complete shopping lists by guiding them through the stores. Everyone with a smartphone emits a wireless signal, so directions to items could speed up the shopping process.
I have a vision that in 20 years, customers will be able to pick up items, have them captured as they enter the trolley, and simply press yes or no to confirm their shopping as they go through a gate at the store’s exit. As convenience stores and discounters claim their market share, supermarkets need to strive to provide a seamless experience in all areas of the store to remain competitive. This means going back to basics with convenient, efficient but friendly shopkeeping, with technology an important part of making this a reality.
Martin Smethurst is managing director of retail at Wincor Nixdorf