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    Defining the 'Connected' Consumer

    Grocery industry being pushed into the future by digital technologies

    By John Karolefski

    How different would our lives be if suddenly we didn’t have smartphones anymore? After the initial panic and withdrawal symptoms subside, we would accept the fact that we could not instantly text, check email, post on Facebook, Tweet, snap photos, play games, and check the latest sports scores and stock tickers – wherever we are and at any time of day. We would not be connected like we once were; that is, connected to each other and to sources of information and entertainment.

    Happily, we are connected consumers in our personal lives because most of us have smartphones. Some of us were born into the digital lifestyle; others were perhaps lured into it because that is America in 2015 and we prefer not to be thought of as old fogies or living in a parallel universe. 

    Being a connected consumer also applies to CPG brands and grocery retailers. As smart business people, we want to connect with the consumers who buy our products and shop in our supermarkets. That was the overarching theme of Progressive Grocer’s second annual Connected Consumer Summit, held recently in Chicago.

    Keynote speakers from such companies as Hershey, Nielsen, SpartanNash and Kroger talked about how today’s fast-changing grocery industry is being pushed into the future by digital technologies. Bob Goodpaster, VP and chief global officer for Hershey, said technological change today is the slowest it will ever be. I will repeat that: the slowest it will ever be. My take-away from all the presentations was simple: grocers need to get onboard or will be left behind.  

    James Russo, SVP of global consumer insights for Nielsen, said consumers still want convenience, price and selection, but digital changes everything because everything is happening on mobile devices. He said 50 to 60 percent of Millennials shop online for groceries, compared to 10 percent of Baby Boomers. “The connected commerce era has arrived,” he proclaimed, adding that mobile payments and a cashless society are the future. 

    SpartanNash, a wholesaler-retailer based in Grand Rapids, Mich., is making sure the retailers it serves are gearing up for that future. The company’s "yes Rewards" loyalty card is foundational to SpartanNash’s digital activities. Digital coupons are an integral component of the path to purchase, according to Linh Peters, VP of marketing. Nearly three of four members of the loyalty program have signed up to receive digital coupons which are loaded onto the card. The “lifetime value” of these coupon users is 2.75 times that of non-digital coupon users and they shop twice as often and spend 51 percent more per basket.

    The big news from Kroger is a major initiative to digitize its grocery stores. Brett Bonner, senior director of research and development, discussed the Internet of Things inside the grocery store; that is, scales communicating with mobile devices, flow-through checkout lanes, and connecting the wireless language of multiple devices to create an optimal shopper experience.

    Here’s the bottom line: Grocery retailers need to engage connected consumers before, during and after shopping trips. Make them an offer they can’t refuse via digital coupons, apps, beacons, loyalty cards and social media. Or watch your competitors do so.    

    By John Karolefski
    • About John Karolefski John Karolefski is a veteran business journalist with 25 years of experience covering CPG, retail and technology. Over the years, he has edited several trade publications and is the co-author of three books: "TARGET 2000: the Rising Tide of TechnoMarketing," "All about Sampling and Demonstrations," and "Consumer-Centric Category Management." He has appeared on CNN, CBS Radio and BBC Radio to discuss marketing issues. He can be reached at [email protected]

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