The grocery sector stands on the brink of upheaval, where innovations including biometrics and RFID could prove to be radical catalysts for change. Staying one step ahead of your customer is vital, but consumer response is tough to predict. Catherine Sleep examines how changing lifestyles and developing technologies will shape the way we shop in the future.
Understanding changing customer needs is the crux of any business’s success, but “the consumer” is a notoriously difficult creature to pin down. Predicting future trends is problematic but essential if retailers are not to be taken by surprise by evolving consumer demands.
As today’s teenagers reach adulthood, the grocery sector will have to engage with a new generation of shoppers who have very different expectations from their parents. Born between 1987 and 1993, they have never known a world without mobile phones or the Internet. Few will remember when supermarkets weren’t open on a Sunday, and barcodes have been around their whole lives.
Will tomorrow’s shoppers embrace technology more than today’s shoppers? They almost certainly will. Do retailers need to radically rethink their proposition to cater for the needs of tomorrow’s consumers? At its annual convention last week, grocery think tank IGD unveiled new research into future shopping patterns that suggests tremendous challenges – and opportunities – for the food industry.
For instance, IGD’s Tomorrow’s Shopping World report revealed that just 31% of future shoppers expect to buy all their groceries in supermarkets. Online grocers will pick up much of this demand but there was good news for specialist food retailers too, as just over a quarter (26%) of teenagers included such stores as part of their future grocery shopping scenario. The principal categories they envisaged buying in shops are fresh items which would be regarded as staples in most shopping trolleys, namely milk, bread, fresh fruit and vegetables, meat and fish.
The payment methods which respondents said they are most likely to use in the future were the currently conventional methods of credit and debit cards or cash. However, 20% of teenagers indicated that they would use biometric payments, such as fingerprint or iris recognition. Perhaps surprisingly, 8% were also open to the idea of having a chip inserted in their body to be used as a payment method, suggesting a preoccupation with convenience, which goes further than the options available today. Despite the apparent teenage addiction to text messaging, mobile phone payments were revealed by the survey to hold less appeal than other methods, perhaps due to respondents’ awareness of mobile phone-related crime and concerns about security.
The most popular in-store technology for teenagers who want less staff involvement is self-scanning at the checkout, with 66% seeking wider availability. A quarter of respondents said they would like automated trolleys while 16% indicated they would appreciate satellite navigation systems on trolleys. With approximately 60% of respondents preferring hypermarket formats to small supermarkets or convenience stores, there is a clear need for improving navigation around the store and many retailers are already working on this issue.
Information technologies were the second most popular feature after self-scanning with 22% of teenagers suggesting this. The key information shoppers indicated they would look for included checking whether a product is in stock and, if available, where it could be found. They would also like systems to create shopping lists, either based on previous purchase history or on current promotions.
Some of these teenagers’ technology preferences could be interpreted as a desire for minimum interaction in stores, but this is counterbalanced by a demand for greater staff involvement. Four in ten teenagers said that an assistant who simply puts items through the checkout and takes payment is not enough. Indeed, some of the features which shoppers would like to see in supermarkets are already offered, but are not well publicised. These include providing extra customer assistance such as packing bags, carrying shopping to cars, fetching products that have been forgotten and accompanying shoppers around the store to provide assistance with selections.
Grocers can ill afford to ignore the information contained in this latest IGD report, which contains valuable pointers for how they can most effectively invest in developing their stores. Today’s teenagers are an under-researched demographic who will soon be in charge of the main grocery shop for themselves and, before long, their families. They are more likely than their parents to adopt new technologies – 38% said they like to try out new technologies as soon as they become available, compared with just 18% of adults.
Many of the developments teenagers expect to see are already a work in progress. For example, RFID technology and implementation is developing all the time. It is becoming increasingly used in the health sector to combat drug counterfeiting, for example, and in the meat sector to improve livestock traceability. However, it has yet to see widespread use in the UK at the front end of retail.
Many companies are still evaluating the cost/benefit and complexity of implementing RFID on low-ticket items. Another factor being taken into consideration is the concern of consumers surrounding its perceived impact on an individual’s privacy. However, with teenagers happy to use MySpace, YouTube and blogs on a daily basis to share details of their private lives, there may be fewer concerns surrounding privacy than for older generations.
Click here to access a free copy of the IGD report Tomorrow’s Shopping World.