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Igniting Innovation

By Whitney Atkins posted 08-31-2020 15:29


Once unknown, the phrase "social distancing" has become ubiquitous in the past few months, as coronavirus concerns have made physically distancing a well-understood part of a strategy for public health and safety. Inevitably changes in social behavior have huge impacts on the grocery world and they also drive the potential for opportunity. With "the unprecedented" come shifts that can be taken advantage of with new technology or new ways of thinking.

Some of these shifts can be simple improvement on technology we're already very used to. Digital loyalty programs are nothing new, but integration with mobile apps is a simple expansion that makes sense under current challenges. These apps can integrate mobile ordering that appeals to a desire for social distance while also bringing the well-understood value to a brand that gave these programs their name: increased customer loyalty. Darren Rebelez, President of Casey's General Stores, for example, views their new rewards program as a part of a larger digital strategy which communicates their longevity and reliability as a company as well as situating themselves as a part of their respective communities.

Shifts in technology can be larger and much more flashy than simple loyalty apps, though. While we don't yet have the flying cars that have often been a staple of science fiction, we are starting to see the normalization of another sci-fi mainstay: robots.

Robotics has long-been a part of the increasing reach of technology, particularly in factory settings, but COVID-19 has helped encourage an extra push for robots in the supermarket. As GS1 US Vice President of Retail Grocery, Ryan Richard noted, robots and drones are becoming more commonplace as a means of helping to meet the increased needs for social distancing. In some cases, the new technology in these robots can accomplish more than simply less people (and thus more space between people) on the retail floor.

Take the example of Ahold Delhaize, who plan to bring shelf-scanning and risk-detecting robots to its nearly 500 Giant/Martin's and Stop & Shop stores. Bart Voorn, their director of data, notes that staffing issues related to COVID-19 have inspired an acceleration of this program, telling the Wall Street Journal, "All the researchers said this Covid situation is so urgent, we see a direct application for our work right now because there's a scarcity of people who can work in stores." Improvements in the technology over time will be able to automate more and more mundane tasks, an application even more important (and especially arduous) in larger stores.

From a practical standpoint, drones have further to go, but are being explored enthusiastically. Rouses Markets in Mobile, Alabama is testing an airborne drone delivery system, partnering with drone developers Deuce Drone. The company is hopeful for the future of the technology: "We should be able to get groceries to customers in 30 minutes or less," said CEO Donny Rouse in a recent press release. "Plus it's more cost efficient, meaning we can save customers time and money." This being our new normal could happen sooner than you think: a public demonstration of simulated deliveries happened earlier this month

Distance can be accomplished through more conventional means as well. In 2019, some analysts were predicting $35 billion of grocery sales would involve curbside pickup. Those projections, however, have been completely overturned by the coronavirus pandemic, as concerns over safety have driven shoppers online. In June alone, online grocery delivery and pickup was over $7.2 billion, according to Brick Meets Click, with large growth in the category for everything month preceding it.
The increase in demand has further driven innovation. According to Progressive Grocer delivery services are on an unprecedented upswing. Instacart is rapidly expanding its home delivery service, adding numerous features. One feature, appropriately called "Order Ahead" allows customers to schedule delivers in advance, and another matches orders to available shoppers to speed delivery services. Their services have become so widely in demand, that they've increased their army of shoppers by nearly double in the last year. One of their features, "Leave at My Door" drop-off, has been adopted by over a quarter of all orders, despite it being one of their newest features.

When our President and CEO, Mike Eardley, introduced Our Influencers, he said that even more than food, the business of our industry was that of trust.

Trust, as a commodity, is invaluable and irreplaceable. This is one reason why blockchain technology is going to become more important, according to MIT professor Sanjay Sarma.

"Blockchain, or more generally, digital certification and trust technologies will become more important in my view, because you have more parties that have to trust each other and more opportunities for distrust," said Sarma, "because I don't know the person who delivered the product to my front door."

This is probably music to the ears of innovators in this technology like GS1; if trust is over greater value to consumers than ever before, blockchain can supply an incredible amount of detail about the journey of the products they buy. The pandemic has made transparency important - 81% of shoppers say it is more valuable to them now - and the massive specificity made possible with blockchain is one way to help supply customers desire for knowledge about where their food came from.

Blockchain also has a role to play in the shift from restaurants to home eating. Richards sees this as a huge space for innovation, as food consumption shifts between the commercial supply chain and the foodservice supply chain. Recently he told Snack Food and Wholesale Bakery Magazine that many producers aren't fully "'retail ready' as they have never sold into retail [and] are simply not set up with barcodes" and other technology that commercial retailers desire. The mismatches in the supply chain add up, and blockchain technology is a great example of a way to match excesses in capacity in products, transportation and warehousing services for various aspects of the industry as they shift into fulfilling the needs from foodservice to grocery.

Humans are naturally very innovative. In looking to increase the safety of distance, our problem-solving skills have developed many improvements that will be with us long after coronavirus is gone. Who knows what next innovation is just around the corner?