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Technology is becoming increasingly prevalent in the world of grocery. Digital advancements have upended the traditional business differentiators of price, convenience, product selection and customer experience. The industry is already seeing a variety of reactions to digital advancements, with some grocers touting omni-channel adoption as a key differentiator, while others are hesitant to embrace the digital movement. One thing all grocers can agree upon, though, is their concern with how technology will eventually affect their bottom line. Regardless of whether they participate, technological innovation is creating a tectonic shift within the grocery industry.
Over the past 16 years, MyWebGrocer has encountered four types of grocer personas, or archetypes, each with their own reaction to digital. Each persona has been developed out of previously existing characteristics within the corporate structure.
Waiting to React
The "waiting to react" grocers, or the risk-averse, tend to take traditional and safe approaches toward adopting new technologies. They assume complete loyalty from their customer base, believing that regular shoppers will always come to their stores whether or not they have the newest innovations such as online shopping, mobile apps or scannable barcodes. These conservative grocers will only implement changes when forced, and will resist investing capital if there's no guaranteed return. This means they’re transferring risk to their market share, where they may actually start to lose customers due to lack of innovation.
Slightly more advantageous than the "waiting to react" persona is the "fad follower," or hobbyist. Similarly, they're not looking to stay ahead of market trends. This grocer persona typically stems from one specific faction within the organization that’s looking to spur innovation via "pet projects." Executives approve these projects to falsely reassure themselves that they're ahead of the curve, but these activities are largely disconnected from the broader company strategy and misaligned with the organization's goals. A typical project may be patched together with technologies promised by unproven startups and spare IT resources, and in the end is likely to hit a dead end and be abandoned. These innovations will also not help the company's bottom line, since they won't be implemented across the organization, because of lack of funding and support.
"Pioneer" grocers are risk-takers, with innovation ingrained into their corporate strategies and identities. Annual budgets include major line items for technological advancements, although they're fully aware that some projects may not result in success. These grocers understand that, realistically, implementing digital technologies could lead to great reward or failure, depending on consumer acceptance. Certain characteristics are necessary for the pioneer persona. These grocers are comfortable with risk and have the internal financial structure to support it. Typically, pioneers will be privately held, with no public market to answer to if/when a project fails, and they maintain a loyal customer base that's willing to evolve with them through their ventures.
Finally, there are the strategically agile grocers. Constantly monitoring market trends, these grocers keep one foot on the gas and one on the brake at the same time. They're able to track many options and set themselves up for quick implementation when they decide to pursue a new venture. Strategically agile grocers often work with partners that have already worked with pioneers, allowing them to benefit from the knowledge the risk-takers have acquired without taking the actual risk. These grocers don't dive into a new venture blindly, but conduct their due diligence and gain a complete understanding of the steps needed to fulfill project objectives. Financially, these grocers take a self-funded approach, reinvesting revenue from previous projects into new ventures, thereby allowing for steady, consistent innovation.
Grocers should strive toward becoming strategically agile at a time when the market is being disrupted by new technology. Agile grocers are setting themselves up for success by being one step ahead in certain places and one step behind in others, with the ability to be quick on the draw and adopt new technology at the opportune moment.