Using Tech To Track Groceries

From mobile checkout counters and loyalty programs to online shopping superstores, a trip to the store has certainly changed.

But despite all the changes, Americans are still shopping at brick-and-mortar stores. According to recent research, even as the youngest consumers (including teenagers who have grown up digitally connected) gain more influence, 98 percent of them still head out to physical stores when it comes time to make many purchases.

And the stores that shoppers visit are largely the same, with grocery stores continuing to be among the most popular. Several of the largest retailers in the world are supermarkets like Kroger, the third largest retailer in the world; Walgreens, at number 10; Safeway at number 30; and Publix at number 32.

While customers still visit these stores regularly, the merchants themselves continue to struggle with many of the same problems that have hindered them for years, including inventory management issues. Grocery stores and supermarkets need to keep track of the large numbers of different produce and other perishable items that move on and off their shelves between customers’ weekly trips.

But omnichannel and unified commerce may have some answers for grocers. Microsoft recently debuted new solutions designed to help these merchants deal with their inventory challenges.

To discuss how new technology is helping merchants solve these problems, PYMNTS recently caught up with Brendan O’Meara, Microsoft’s managing director of worldwide retail. O’Meara told PYMNTS that inventory management is one of the most important aspects of an effective omnichannel strategy because it provides shoppers with a consistent experience in finding the products they’re looking for in all of a merchant’s channels — online, mobile and in-store.

Growing a new grocery store

Grocery stores and supermarkets have also largely avoided a slump caused by online options, with retail grocery shopping still set to make up 80 percent of grocery shopping by 2020, according to a report from Nielsen and the Food Marketing Institute.

Grocery stores remain popular; according to a 2016 report from the Food Marketing Institute, shoppers visited them on average more than once a week, spending $107 per week on groceries. However, they still struggle with many of the same inventory management issues that have plagued them in the past. Even big-box retailers like Walmart and Target are searching for new solutions in order to cut down on the amount of wasted food and other inventory issues.

O’Meara pointed out that one of the biggest inventory management problems that grocery stores and supermarkets face is ensuring that customers can find the items they’re looking for in a maze of different aisles and options. He pointed out recent developments in the space, including some that incorporate Internet of Things (IoT) technology, like robots using Microsoft’s Azure platform that can help show customers items and keep track of low- or out-of-stock items.

He said that other developers are working on smart shelves, which would help grocers know which of their items are selling. This can help them keep popular items on shelves for customers to purchase and prevent expensive overstocking or wasted products.

“With grocery, we have so many limitations understanding what’s on the shelves in terms of that on-shelf availability” and also have to avoid keeping expensive overstock on merchandise, O’Meara said, pointing to a company called ShelfEdge that is using Microsoft’s cloud analytics platform to help deal with inventory management issues. “[The platform] pulls information directly from the shelves on what’s in stock or out of stock, and it can also act as a beacon and interact with a customer’s phone to show them where the product they’re looking for is [located].”

Customizable solutions

O’Meara also noted that, while nearly all grocery stores and supermarkets, along with other merchants with fast-moving consumer inventory, struggle with inventory management issues, there is not a one-size-fits-all solution when it comes to keeping track of products and shelf space.

Instead, supermarkets and other merchants need highly customizable solutions that can adapt to their and their customers’ specific needs.

“It’s about delivering a personal and seamless experience for the customer,” O’Meara said. “But you need to have the right systems for your business in order to be able to deliver on that promise of a seamless experience. If it isn’t the right solution that fits what your business needs, it isn’t going to work.” 

O’Meara noted that, now more than ever, companies are not satisfied with being big fish in small ponds but would rather become worldwide businesses. However, in order to reach those goals, he said, they’ll need solutions that can be customized to individual stores’ needs, while still being capable in many different kinds of stores or locations.

“The solution needs to have the flexibility to handle the needs of many different scales and work in many different types of retail environments. That kind of global capability is important to global retailers, and most retailers are becoming that, at least to some extent,” O’Meara said, noting that this is especially important for grocers and other merchants that are beginning to offer online ordering or flexible pickup options. “Things like buy-online-and-pick-up-in-store don’t work unless you have the flexibility to see what is in a single store.”

With so many Americans still visiting grocery stores every week, innovations like this will likely continue to change the way modern supermarkets operate. And perhaps it won’t be long before grocery store inventory issues are a thing of the past.

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About The Tracker

The Vantiv Omnicommerce Tracker™, powered by PYMNTS.com, features industry-spanning research and insights that arm retailers with data to make smarter decisions for enabling omnichannel commerce.