Another Fresh Summit, another handful of amazing general session speakers. It is just that when I get home, I really can’t recall the specific gems of insight and direction they dole out with such ease.
“You would have liked the speaker I heard at PMA,” I told my wife. “Yeah, what did he say?” she responds. “Um, well he talked about the Internet, the New York Jets, working in the basement of a liquor store ... well, you had to be there,” I say. Or I should have taken better notes, I guess.
But one of the themes of Fresh Summit at that workshop and also the State of the Industry address by Bryan Silbermann and Cathy Burns was the rapid change of technology and what that means to the industry.
Take smart phones, for example. Right you already have!
Using smart phones to my economic advantage is a source of satisfaction to me. I can look forward to getting a text message from Culver’s Restaurant every single Sunday. When I get an offer for a two chicken finger combos for the price of one on my text message, it is a payoff, even if I never use it.
It brings to mind a question; why couldn’t my local grocer send me a text message when the local sweet corn crop arrives in the store?
In five or six years, sending text messages to consumers may be an archaic practice. If Culver’s is still sending text messages to me in 2020, their marketing manager may get sacked.
So how will I - and 300 million other Americans - use our smart phones in 2020? How can retailers weave their marketing efforts into smart phone technology that will be accepted by their consumers?
By 2020, the GSMA - the industry group representing mobile phone operators - estimates there will be 9 billion mobile connections around the globe, including about 6 billion smart phones.
That means virtually everyone marketers care about will have a smart phone.
The produce industry has utilized QR codes to help engage the consumer in the produce department, but many are already looking beyond the QR code when it comes to the future of mobile marketing.
Showing that at least some are weary of QR codes, one website is filled with pictures of QR code fails.
In its place of the QR code, there is excitement about near field communication, a short range radio technology that allows NFC-enabled tags or stickers to trigger the same smartphone interactions that QR codes do now.
App developers have responded to the expressed need of shoppers to become better equipped to compare prices.
So retailers will certainly find themselves in an even more competitive environment than they are in right now, with consumers able to crowd source the prices of the competition and use that information so they can get the best price for a similar product.
Apps with names like Grocery Pal, PriceCruncher, Cartcrunch, GroceryKing, MightyGrocery, Out ofMilk, PriceMouse, Flyerbug, PricePinchy, and others, are options for consumers.
But retailers also will develop new tools to help them secure customer loyalty, much like that dependable text message I receive every Sunday from Culvers.
A recent article in the Wall Street Journal said that one goal of the Shopkick app is to turn stores into interactive worlds that are entertaining and rewarding for consumers. When shoppers are near stores, the app utilizes smart phones’ location sending abilities to send them product information, coupons and other offers when they are nearby.
Other apps deliver coupons, recipes, the location of farmers markets and apps from online grocery marketers.
How many smart phone users will employ the apps in stores?
That is a good question, since many of us have downloaded apps that we never have time for.
The common thought – or hope - is that many consumers, for the right deal, will embrace the tradeoff of letting go of some of their privacy.
Besides delivering deals, both retailers and suppliers are making more information available to consumers about the food they sell, and that information will be accessed at least in part by smart phone technology, I believe.
With the advent of Whole Foods “good,” “better” and “best” labeling system for produce and Wal-Mart’s apparent intention to measure input use of growers, it doesn’t seem too far-fetched to think consumers will want to see each supplier score on pest management, water use, farm worker welfare, waste, and so on.
But I’m fairly sure the most transformational use of smart phones will be when consumers use their devices to do more shopping for food online.
Online grocery store sales will grow to $80 billion to $123 billion by 2023, according to the firm Brick Meets Click. The growth will be led by the rising popularity of the services in major cities such as New York and San Francisco.
According to Steve Bishop, cofounder and managing director of Brick Meets Click, greater access and the attraction of convenience are driving the acceleration.
Big players like Amazon and Wal-Mart are slowly scaling up their efforts, and new specialized providers like Relay Foods, FreshDirect, Door to Door Organic and other services are rapidly expanding, moving in to serve well defined markets and establish important customer relationships.
While some estimate online grocery sales at just 3% of total grocery sales by 2018, Brick Meets Click, online sales of groceries could represent more than 20% of the total grocery market in the fastest growing U.S. markets by 2023, and about 10% in smaller cities.
We may think of produce as a category is ill suited to online sales, but Bishop said there are quite number of specialty produce items old online now. While there may be greater numbers of center store, stock up items that are ordered online, Bishop believes there is great opportunity to capture online business for fresh produce.
Another report by Jones Lang LaSalle predicts that e-commerce grocery revenue will increase 57.4% between 2013 and 2018.
That report said the progress of Amazon Fresh toward wide-scale implementation should be closely watched, since success in that effort will create a significant threat to supermarkets with thin margins.
Crowdshare programs like Uber could play into future logistic solutions for grocery delivery, according to the report.
Wal-mart Pickup Grocery Service, now tested only in Bentonville, could also expand in the future. Less than a mile from where I live in suburban Kansas City, a startup online order/pickup grocery business called “ZoomIn” has set up shop.
Retailers not willing to get steamrolled by online food sales should:
- Explore new ways of using the smart phone in selling and engaging consumers
- Pay attention to the behavior of your top customers and watch for erosion of sales from online services
- Allow trial and error marketing at store level
- Position for online shopping and delivery solutions
Do all that - and don’t forget to buy the book from that social media/Jets/wine guy that spoke at PMA .You should have been there.