UK: Using Mobile Technology In The Grocery Industry

Last Updated: 6 December 2013
Article by Julie Coleman

In the early 1980s, food industry executives viewed the customer as a singular target. Food companies focused on finding the one perfect formula for each grocery product. However, for one particular coffee company, sales were declining. A consultant named Howard Moskowitz was hired to help turn around their fortunes. In what was a novel concept at the time, after analysing consumer data, Moskowitz decided to group different data points into clusters and see if they congregated around certain ideas. The data showed him that food products have not one but many states of perfection. His concept was applied to all areas of the grocery store in what turned out to be a successful bid to boost sales.(1)

Fast forward to 2013 and this is one reason why we have a tyranny of choice. Add this to our busy modern day lives and consumers have too many choices and too little time to decide what to buy.

Food companies, however, face increasing pressure to cut costs in the current economic environment, yet stand out against competitor products and grow revenue. Luckily, current emerging mobile technologies can help the food industry meet this challenge at every level through the value chain from manufacturer to consumer.

Manufacturer to trade

In supermarkets, eye-level and end-of-aisle shelves give best visibility. This is derived from the psychology of what grabs our attention. Although naturally the manufacturers' scale and pricing strategy plays a huge role, so too does a tablet-enabled sales force. 

Mobile technology creates the opportunity to equip the manufacturer's sales force with data on prior history, retail audits and rich media content for customer presentations. Having all the information they require at the swipe of a touch screen helps create better relationships with customers and enhanced collaboration, creating plans and building flexible trade terms using interactive data and tools. This results in great customer relationships and advocacy, increasing sales to trade and improving product visibility to increase sales to consumers.

Data can also be captured whilst on the move, such as through image analysis for example. Sales reps can take pictures of supermarket planograms with their tablets, automatically converting the image to data with insights. Having real-time data in situ allows to them to react quickly to improvement opportunities.

Trade to consumer in-store

Once the groceries are in store, food retailers can deploy mobile technology to reach shoppers digitally at a suitable point of engagement, helping to grow revenue.

Food retailers can take advantage of the trend towards wearable devices, including headwear which smuggles a smartphone into a pair of spectacles and wristwatches with some smartphone features. Imagine the impact on supermarkets: advances in augmented reality and improvements with geo location technology could allow shoppers to view their shopping list in the corner of their vision, track the most effective route around the aisles and receive advertising and promotions targeted specifically at them at the right point in the aisle, all whilst pushing a shopping trolley. 

Food retailers have a great opportunity to use information they have built up on a consumer's buying history, by combining this with geo location targeting and an intelligent recommendation system, making product recommendations on the consumer's smartphone or through their wearable technology. For example, if the customer pushing the shopping trolley has a history of purchasing dark chocolate, they may be excited to receive a notification advertising a new product line extension of dark chocolate with macadamia nuts!

Emerging mobile technologies such as NFC (near field communications) will further enhance the in-store experience. NFC is a 'contactless radio technology that can transmit data between two devices within a few centimetres of each other' (2). Unlike older technologies such as QR codes, this is a two-way data transmission. This will allow consumers to complete transactions in store (such as electronic voucher redemption and mobile payments) without the involvement of staff. This creates a cost reduction benefit for retailers through fewer staff and automated digital processes. The consumer benefit is no longer waiting in long queues to pay or the inconvenience of carrying a stack of paper loyalty cards from providers such as supermarkets, restaurants and coffee shops. Happy consumers will keep revisiting the retailers and spend more.

Trade to consumer out-of-store

A manufacturer's brands (food products) and trade brands (supermarkets, shops) can grow revenue by going direct to consumers through mobile marketing campaigns. A customer could tap their smartphone against a billboard advertising a vegetable deluxe pizza, which would trigger a download of a map showing the nearest store selling that pizza, as well as the nearest stockist to their home.

In addition to using mobile technology to connect the physical and digital worlds, driving consumers to a company website presents a revenue growth opportunity. The content marketing strategy must therefore be considered as a company's website needs to look great and be optimised across various smartphone and tablet devices. One example includes encouraging consumers to do their online shop on their smartphone. Having this additional ordering channel will increase convenience and subsequently revenue.

In summary, variations on original products and extensions to product lines are likely to increase as consumer demands become increasingly complex, dynamic and heterogeneous.  Therefore the challenge to stand out amongst the clutter and grow sales revenue is only set to increase. Although technologies such as NFC are still in their infancy, the exponentially increasing mobile technologies and tools available are there to meet these challenges throughout the food industry value chain.

Content and information derived from:
(1)  'Salt, Sugar, Fat: How The Food Giants Hooked Us', (Michael Moss, 2013)
(2)  'Mobile Commerce in Retail', (GSMA, July 2013)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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