Will New Technology Change Shopping Habits?

By:  Debbie Cockrell

Store experiences can be hard to control. Say you’re at the checkout line, and everything grinds to a halt for “manager’s approval” on another customer’s purchase.

Or, your favorite brand of cereal/soda/mixed nuts is sold out.

You’re going to leave the store not so happy, or you might not even come back. The stores are well aware of that through feedback surveys and research.

To combat these problems, grocers increasingly are seeking improvements through self-scan apps and store “experiences” that rely not so much on its workers as it does features that are special to that store.

The ultimate model so far has been Seattle’s Amazon Go. But it’s not alone. Walmart and Fred Meyer have offered local shoppers new options, too.

Brick-and-mortar stores are trying new things to compete with online and keep you as a shopper.

As researchers continue to point out flaws in store experience and inventories, stores are scrambling to make the in-store experience better and faster.

Self-scanning, for example, is a hot trend for grocers attempting to compete without investing more in labor or stores.

And some chains, such as Albertsons, are experimenting with an altogether new type of store.

They need to get it right, researchers say.

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With so many shopping options, a ho-hum chain risks fading away “like the mom and pop corner store,” predicted Dunnhumby, a firm that provides customer-data research for retailers.

Self-Scan and ‘Experience Focus’

Both Walmart and Kroger (parent company of Fred Meyer and QFC) are doubling down on bringing self-scan into the hands of its shoppers in the South Sound.

Kroger recently announced the rollout of Scan, Bag, Go to 26 Fred Meyer stores this year.

Walmart has added scanning technology to its store app.

A media representative for Walmart told The News Tribune that local shoppers should check that they have the newest version of the app for this feature to work.

“Next time you visit your local store and open the app, you’ll notice that the Walmart app transforms into Store Assistant,” Walmart said in its blog announcing the new program Feb, 8. “All of the tools you need to make shopping fast and easy, such as Walmart Pay, will be right at your fingertips. We’ve also made the product search bar and the scanner easier to find, so you can quickly read reviews, find items in store and double-check prices.”

This latest improvement comes after Walmart introduced its in-store “rapid returns” last year.

Meanwhile, Albertsons, which locally was part of the round-robin of store switch-outs in the Haggen bankruptcy of a few years ago, this month announced the launch of a new banner: Market Street Idaho, with two test stores in Boise.

“Promising exclusive culinary delights and unique dishes, the two Market Street Idaho stores will encourage customers to hone their inner chef through in-store culinary events and classes as well as time savers like catering services, an in-store restaurant style food court and other gourmet creations fit for the most discerning customers,” according to the Feb. 7 news release.

The word “experience” appears multiple times in that announcement, from “wine pairing experience” to “culinary experiences,” with one executive in the release noting “Idaho’s passion for great food and elevated experiences.”

“Experience” as a store quality isn’t taken lightly by retailers, as an in-store experience can make or break a shopper’s judgment of a store.

Stacking Up

Major retailers, including Walmart, are making investments to try to improve customer service. Recent research shows there is room for improvement.

A comparison of Walmart versus Aldi supermarkets in a study by the Retail Feedback Group didn’t go well for Walmart.

Aldi is a chain more known in Southern California and back East than in Washington state. Think low-cost, no-frills, in-store brands mixed with familiar brands offered in bulk.

“One of the most surprising results was the strength of Aldi and the comparative weakness of Walmart,” said Brian Numainville of Retail Feedback Group.

According to Numainville, “Shoppers who visited an Aldi in the last 60 days were more likely to recommend Aldi (4.54 on a 5-point scale) than supermarket shoppers were to recommend the supermarket (average rating of 3.66).”

The low marks may be one reason why the Walmart Academy, including sites in this state, was one of the chain’s major recent investments.

The academy training focuses on core retail, leadership and communicating with customers. Workers then move on to the retail floor for actual customer interaction.

Walmart would not respond to request for comment on the Walmart versus Aldi results, but its CEO in April spoke of progress with the academies.

“These investments are paying off for our customers through cleaner stores, friendlier service and faster check-out times,” president and CEO Doug McMillon said in a news release.

Inventory also is key.

Main & Vine was an experiment for Kroger, but the new, nearby Gig Harbor Fred Meyer took a lot of those specialized items and adapted them to the Fred Meyer model.

And chasing the “Main & Vine shopper” or “Trader Joe’s fan” shows having a specialized inventory is key in a fragmented marketplace and has been for a long time.

Lessons from the Past

For all the current buzz over self-scanning and shopping experience, another study offers historic lessons for grocers when it comes to a fragmented marketplace.

The study, authored by three researchers including Qin Zhang, an assistant professor of marketing at Pacific Lutheran University, examined shoppers’ habits from 2002-2003.

Even then, it was apparent that shoppers were seeking out stores based on individual items, with measurable loyalty when it came to categories of items at certain stores.

Zhang noted that loyalty by category takes on a more important meaning in today’s marketplace.

This also would explain why the Walmart app is emphasizing a better in-store experience.

In comparing online vs. “offline,” stores, Zhang told The News Tribune in a recent interview: “There could be a certain item (customers) like to shop for on Amazon and for others they will shop at a local store that might be something for a higher chance for return for them, or maybe they want to see the product.”

In its 2018 Retailer Preference Index by researchers Dunnhumby, the authors note that 1990s was the introduction of the “age of customer choice.”

“Shoppers who used to be loyal to one supermarket, are now shopping multiple stores — online and off — to find their preferred combination of price, quality, variety and store experience.”

The Next Best Thing?

Amazon Go, the world’s first cashierless brick-and-mortar convenience store model, for now is the ultimate hybrid of store experience and self-checkout.

It takes both models to their current technological limits and has been described as a store of the future.

But it’s too early to declare it the future of all in-store retail, according to a Feb. 8 Harvard Business Review report.

“It is unclear if its eventual savings will justify the investment, or whether customers will find the digital surveillance it entails to be a tolerable price to pay for an improved shopping experience,” the authors wrote.

“Retailers shouldn’t rush to rip out their registers just yet.”