News Feature | December 19, 2013

Grocery And Convenience Store IT News For VARs — December 19, 2013

By Anna Rose Welch, associate editor

Online Shopping

In the news this week, a study concludes the CPG industry is slowly adopting new technology, analysts forecast the demand for online grocery shopping to increase, and technology to manage product consistency across all channels could help store brands compete with national brands.

CPG Industry Slow To Adopt New Tech

BCG and the Grocery Manufacturers Association recently released a new report entitled “GMA Information Technology Benchmarking 2013: The New Mission for IT in Consumer Packaged Goods.” The report studied how much money companies are investing in tech and how aggressively they are adopting new technologies. The report also highlights some of the key IT trends in the CPG industry. For example, Big Data solutions are not currently being deployed by any of the companies surveyed, though most companies are in the early stages of deploying new technologies. The survey also found that companies that quickly adopt new technologies spend less on IT infrastructure vs. IT applications than those that are slow to adopt new technology.

Online Grocery Revenue To Surge By 2018

IBISWorld reports that, in the wake of improving incomes and rising food prices, the online grocery industry profits have grown in 2013. In fact, IBISWorld expects revenue to surge in 2013 as consumer demand for online shopping increases. By 2018, analysts expect that unemployment will have declined significantly, decreasing the amount of leisure time consumers have, making online shopping more convenient and appealing. Currently, online grocers, such as PeaPod and Fresh Direct, account for only 20 percent of total industry revenue in 2013.

Private Labels Crave Consistent Product Content Across Channels

According to Private Label Store Brands, store brands stand to compete better against national brand items by ensuring that product content is consistent across all channels. The article suggests three practices to maintain product content (i.e. images, nutrition facts, ingredients, etc.) for private label items. A centralized database could be an important place to keep all content information in order to ensure information remains consistent across the web, mobile apps, circulars, and in-store. In addition, making sure that private label items are visible across all channels can help distribute product information for online shoppers researching products. Leveraging a content distribution system offering flexibility and scalability would help ensure that distribution is done efficiently and can be carried out to a growing number of recipients.

The Effects Of Online Grocery On Industry, Customers

Brick Meets Click interviews Chad Arnold, CEO of Door To Door Organics (DTDO) about its “contextual commerce platform, which uses technology to personalize the online grocery shopping experience. The interview covers the changes technology is making in food retailing and how the tech affects customers, among other topics. While Arnold believes that consumer behavior is shifting, he still acknowledges that “technology is only a tool and e-commerce is only a channel.” Those that succeed will be the ones that are able to provide compelling offers for customers and relationships with customers. “This is as much a customer experience design challenge as a technical one,” Arnold says.  

Online Grocery Sales To Rise In 2014

Bill Bishop from Brick Meets Click discusses the rise of online grocery ordering with Supermarket News. E-Grocery expansion is the third of ten predictions that Supermarket News has released for 2014. According to Bishop, “We estimate that today about 3.3 percent of grocery sales are done online and that this will approach 4 percent by the end of 2014…” This figure would be a jump of more than 20 percent over the current levels. Growth of online grocery has, so far, been the most successful in parts of the Midwest, Northern California (following the AmazonFresh expansion) and in Northern New Jersey.

Convenience Store And Grocery IT Talking Points

Daymon Worldwide released a list of eight “Global Retail Trends Predictions for 2014 and Beyond.” According to Daymon Worldwide, 2014 is going to be “The Year of Retail Contradictions.” Not only will smaller format stores replace the supercenter culture, but discounters, dollar stores, and specialty stores will continue to see growth. Retailers will also need to find ways to create closer relationships with mission-based shoppers as people become more interested in quick trips rather than stocking-up trips.  

Convenience Store Decisions discusses a recent NACS survey, which revealed that more customers will be turning to convenience stores to purchase gifts and party supplies. In particular, 23 percent expect to purchase gift cards and 21 percent expect to purchase smaller presents/stocking stuffers at c-stores. Younger consumers, ages 18-34, are the most likely customers to be purchasing these items from c-stores for the holiday.

For more news and insights, visit BSMinfo’s POS & Payment Processing Tech Center.

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