Introduction

The Coresight Research team is attending and participating in this year’s Groceryshop conference, held on September 19–22, 2022, in Las Vegas, US. The event brings together retail leaders and industry experts from around the world to explore the changing grocery landscape and address current challenges.

In this report, we present insights from day three of Groceryshop 2022 on September 21.

 

Groceryshop 2022 Day Three: Coresight Research Insights

Livestreaming Is Directly Engaging Consumers in New Ways

New digital tools are enabling companies to engage directly with consumers in more immersive ways than we have ever seen before. Industry leaders and experts see particularly fruitful opportunities in livestreaming and shoppable video.

Deborah Weinswig, CEO and Founder of Coresight Research, presented on the power of the livestreaming opportunity across retail, from services to agriculture, and discussed untapped potential in the grocery sector. She shared Coresight Research’s proprietary data insights that 63% of retail companies using livestreaming expect more than 10% revenue growth through the channel in the next two years, underlining the immense opportunity.

Weinswig set the record straight on the perception of livestreaming as an emerging technology for retailers, explaining that it has already seen immense success in China, representing a $497 billion market in China as of 2022. In its nascent stages in the US, the technology is set to see growth in the coming years, from its current $20 billion market size to $57 billion in 2025, Coresight Research estimates (as shown in the image below)—although Weinswig emphasized that opportunities exist to steepen the adoption curve, if retailers and brands learn from the examples set by the China market.

 

Livestreaming is a key channel for brands to connect with consumers and provide product education. Benefits include reduced return rates, as live-video hosts (which can be influencers or brand representatives, for example) can test products in real time on a livestream, providing valuable information to viewers so they gain a better understanding of the product before they commit to purchase.

Moreover, livestreaming presents a unique way for brands to interact with consumers and create a brand community. Engagement can be cemented through providing exclusive offers and limited product availability during a livestream.

Weinswig presented multiple case studies, exemplifying the diverse range of successes and opportunities in livestreaming. She cited the prominence of agricultural livestreaming in China, whereby farmers present agricultural produce on livestreams, which is sold directly during the stream through social media apps. For instance, on August 21, 2022, major Chinese e-commerce platform Pinduoduo launched its “Super Agricultural Goods Festival,” with 24 days of live shopping programs promoting 200,000 agricultural products across the country.

Weinswig concluded that live-video opportunities in grocery are underdiscussed but have limitless potential—as evidenced by success in China.

• Read Coresight Research’s full coverage of livestreaming e-commerce.

 

Retail Media Provides Opportunities for Personalization

Shoppable video provider Firework also highlighted livestreaming as a key channel for digital commerce, during another session at Groceryshop. Vincent Yang, CEO and Co-Founder of Firework, explained that he expects retailers to shift livestreaming onto their own e-commerce sites to take ownership of the channel, opening the door to increased retail media opportunities in live-video retail.

For grocery stores, adopting technologies such as livestreaming brings new traffic to their websites and enables interactive store experiences to be replicated remotely, Yang said. During Groceryshop, Firework announced that it has signed a partnership agreement with Walmart Connect, an omnichannel media business of Walmart, to bring livestream and premium shoppable video content to Walmart customers.

 

Grocery retail technology startup Swiftly expects the retail media market to grow to $100 billion by 2026. Sean Turner, Chief Technology Officer and Co-Founder of Swiftly, explained that growth will be driven by brick-and-mortar retailers needing a personalization engine as consumer demand for tailored shopping experiences increases. Physical grocery stores can use retail media to bring personalization into shoppers’ in-store visits, equating to higher conversion, larger cart sizes and better customer experiences. Retailers can monetize retail media experiences through targeted advertising and enhanced shopper analytics.

• Look out for Coresight Research and Swiftly’s insights on retail media in our upcoming free report, A Guide to Multiplying Retail Media Dollars.

 

Technology Innovators Are Providing Online and Offline Retail Solutions

Day three of Groceryshop focused heavily on technology innovations, presenting retailers with solutions and disruptive opportunities from payments to inventory management. Tech innovators continue to identify pain points in the retail ecosystem and apply innovative technologies, such as AI (artificial intelligence) and computer vision to provide solutions.

Luis Vera, CEO of software company Zippedi, discussed how the company uses robots to capture store data. Zippedi’s AI technology can create a “digital twin” of a store, which is stored online, enabling its Zippy 3.0 inventory robots to address key issues with the modern grocery store model, including inventory management, pricing, shelf execution and planogram compliance. Vera explained that the company has so far deployed 200 working robots in stores and foresees that they will be a staple in all stores in future.

 

Will Glaser, CEO and Founder of checkout technology company Grabango, highlighted checkout-free shopping as a crucial offering in all stores. Powered by AI and computer vision, the technology provides “hassle-free shopping,” in Glaser’s words, as consumers can avoid standing in lines and handling barcode scanners. Glaser explained that shoppers love this concept, with 97% finding that Grabango checkout-free technology is easy to use, and 96% are likely to use it again, according to the company.

With a different application of AI in the grocery space, grocery operating system provider Afresh’s technology tracks demand, manages orders and reduces food waste. Matt Schwartz, CEO and Co-Founder at Afresh, emphasized that, with fresh food comprising an essential part of grocery, there is a strong need for new solutions; the Afresh platform drives greater accuracy and enables better ordering and inventory decisions. The company’s partners include US grocer Albertsons, which is now benefiting from better supply chain management for fresh products, according to Schwartz.

 

Ofek Lavian, CEO and Co-Founder of payment processor Forage, discussed the company’s role in facilitating the use of food stamps, which are currently relied on by 42 million US consumers, representing 15% of US grocery sales. Forage’s technology enables retailers to process EBT (electronic benefit transfer) payments online, providing wider acceptance of food stamp payments, which currently have limited use options. Forage is also the first provider to facilitate online EBT payments on Shopify, enabling retailers to save time and resources by using its online components.

Steven Kramer, CEO at frontline orchestration platform WorkJam, highlighted the need to improve operational management and revolutionize grocers’ frontlines. WorkJam is addressing these issues by leveraging technology to increase management efficiency. The platform increases productivity by facilitating two-way communication, employee learning, shift swapping and task management. Kramer argued that self-automation of management can drive millions of dollars in savings for grocers.

Consumer Centricity Is Key To Retaining Shopper Engagement

While the importance of putting the consumer at the center of the retail experience is not new, both new and established brands are renewing their focus on consumer centricity through disruptive methods to engage and acquire new customers.

Megan Crozier, Executive Vice President and Chief Merchant at Sam’s Club, stated the importance of engaging with club members and continually seeking better understanding of what they want. Crozier discussed the company’s transition from being member-centric pre-pandemic, to its current position as “member-obsessed.” Sam’s Club has a member community of 40,000 that it taps into to inform product development and new launches. In addition, Crozier touched on the importance of communicating with suppliers and associates to keep consumers’ concerns and demands front and center.

Joel Warady, President of Catalina Crunch, and Parag Shah, Vice President of Omnichannel Merchandising for supermarket retailer The GIANT Company, discussed the importance of consumer centricity when it comes to merchandising strategies. For the purposes of innovation, the two speakers recommended that retailers engage on multiple platforms to reach the consumer where they are; TikTok is currently a popular space for consumer engagement, according to the speakers. A key part of this engagement is listening and responding to consumers. For example, Warady spoke about the importance and challenges of hiring chief listening officers to observe and understand consumers across platforms—and provide actionable insights.

Ben Goodwin, CEO, Formulator and Co-Founder at soda company Olipop, explained how the brand is disrupting the CPG (consumer packaged goods) space and attracting and retaining customers with a unique offering. Olipop sells low-sugar and high-fiber soda that it claims supports digestive health. Goodwin explained that there was a gap in the market in terms of beverages aimed at digestive health, with 80% of its new customers also new to the digestive health category.

Although Olipop started wholesale, it has transitioned to a DTC (direct-to-consumer) model and has introduced a successful subscription business. Goodwin stated that the product has a remarkably high retention rate for a beverage, at around 40%, as customers claim that they are “shocked at how good it tastes” and integrate the product into their lives.

 

Retail Supply Chains Must Be Optimized for the Long Term

The pandemic shone a spotlight on the many complexities and pain points throughout the retail supply chain. Disruptive platforms and innovators are leveraging technology to solve these problems for grocers at all stages of the supply chain.

Data collaboration platform Crisp provides actionable insights to improve supply chain efficiency. Are Traasdahl, CEO and Founder of Crisp, highlighted the need for collaborative data practices across the retail supply chain. He reflected on the retail industry of 20 years ago, where data often didn’t even make it from the retailer to an Excel spreadsheet—noting that, despite progress, there is a major role for collaboration in the transition away from keeping data in silos. Traasdahl stated that Crisp is addressing this industry challenge, with data collaboration bringing benefits for all involved—from higher revenue to reduced waste and improved forecasting accuracy. Crisp is currently helping 350 brands to reap these rewards through data collaboration.

Fiona Lee, Chief Product Officer and Co-Founder at Pod Foods, a tech-enabled grocery supply chain platform serving emerging brands, discussed the company’s mission and why the current grocery distribution system is broken. Lee stated that billions of dollars are lost to industry fragmentation as the incumbent distribution system lacks insight and current infrastructure fails to respond to industry shifts as it is outdated, slow, unscalable, asset heavy and notorious for hidden fees. To address these issues, Pod Foods has built a centralized, data-enriched business-to-business marketplace platform to connect grocery retailers to CPG brands. Lee sees this model as the future of the grocery supply chain, describing it as an infinite warehouse for retailers that connects them with emerging brands in any location.

Sunil Kumar, Vice President and General Manager of Walmart Commerce Technologies, discussed the importance and challenges of omnichannel fulfillment. Kumar argued that both grocers and consumers benefit from efficient omnichannel fulfillment. For grocers, it reduces costs, improves inventory leverage and provides incremental in-store sales, while for consumers, omnichannel fulfillment offers convenience and flexibility, simplified checkout experiences and savings on shipping.

The Understanding of Shopper Convenience Is Continually Evolving

With more options than ever before, the notion of shopper convenience is continually evolving. Retailers discussed how they define convenience and how they are delivering shopping experiences that match shopper expectations, particularly when it comes to delivery speed.

On the topic of rapid commerce, Fidji Simo, CEO of delivery platform Instacart, argued that 15-minute delivery is not sustainable or necessarily convenient, but rather it is a good solution for a very specific need that retailers should charge a premium for. Simo discussed Instacart’s approach to convenience, which is based on technology solutions that drive its transformation of online grocery shopping experiences “from transactional to inspirational”. Urgent industry issues identified by Simo in this transformation include payment methods, cheaper delivery options and facilitating next-day collection. Instacart’s dark store strategy provides a solution that helps online grocers to compete with brick-and-mortar counterparts in these areas.

Krystina Gustafson, Senior Vice President of Content at Groceryshop, discussed misconceptions around quick commerce and convenience within her presentation on three key themes that are defining grocery today. She pointed out that retailers need to consider the characteristics of convenience, namely that reliability trumps speed when it comes to convenient shopping experiences. Moreover, retailers that are able to provide consumers with relevant products, such as accurate suggestions for add-to-cart functions, are more likely to be considered convenient. Convenience stores will be the next digital adopters, Gustafson believes, with the store format leading the way in defining convenience through digitalization. She also sees promise in new business models that facilitate convenience, such as meal kits, prepared meals, subscriptions and new pickup/delivery models.

Michael Montagano, CEO of ghost kitchen company Kitchen United, also considered the role of prepared foods in defining convenience. He cited today’s transformational point in the availability of prepared foods for consumers, as consumer preferences are changing rapidly. Kitchen United believes that while grocers are best suited to meet this changing demand, they are currently ill-equipped as they do not currently offer branded, freshly prepared cuisine for pickup and delivery and do not control these services when offered. Montagano explained that grocers should take advantage of their under-utilized spaces, which are often in prime locations and have robust inventory for attachments. For example, Kitchen United has partnered with Kroger to launch five commercial kitchens, enabling consumers to choose from a variety of restaurants available for pickup and delivery all in one location.

 

In his presentation, Tyler Sones, Co-Founder of OPIE Drive-Thru Grocery, introduced OPIE’s new grocery store format, which centers on offering speed and convenience. The store is pickup only, enabling it to fulfill an order of up to 15 items in under three minutes. With increasing demand for omnichannel capabilities, Sones explained that click-and-collect services are extremely popular, with 60% of US households reporting previous use.

 

Retailers Are Homing In on Sustainability and Social Consciousness

Sustainability and social consciousness are becoming cornerstones of retail success and more highly valued by consumers than ever before. Retailers shared how they are making it easier for consumers to discover sustainable and socially conscious products.

Nick Green, Co-Founder and CEO of natural and organic foods retailer Thrive Market, discussed how the company is fulfilling its mission to give consumers easy access to sustainable living. Identifying future trends, Green explained that food is where health starts, which extends to pets, the home and lifestyle in the conscious consumer mentality. He stated that sustainability has always been a major focus for Thrive Market, as it offered carbon-neutral shipping from its initiation and plans to be plastic-free by 2025. Green highlighted increased opportunities in regenerative, plant-based foods, as these products are also deemed healthy for the planet.

 

Matt Alexander, CEO and Co-Founder of progressive department store Neighborhood Goods, presented a new store format, which comprises brand and product rotation and transforms the stores into curators. Alexander explained that Neighborhood Goods selects its brands with intention, focusing on brands that are female-founded, sustainable and black-owned. Alexander emphasized the importance of understanding consumers’ perceptions of a brand’s social value brands and how that plays into their contextualization of products and their purchase decisions.