Coffee with CART (4/2/15)

Consumer technologies continue to evolve and the team from CART, Center for Advancing Retail and Technology, asserts that independent retailers are in a uniquely advantageous position to move more quickly than larger, less agile retail counterparts. Last week, the CART team reviewed areas of developing technologies that will increasingly impact the retail community.

Payment systems have the largest, and most obvious, financial impact to retailers and consumers. The arrival of Apple Pay and Google Wallet continue to grow the desire for retail locations to accept mobile payments. It is estimated that in-store mobile payments will increase to $800+ billion, or about 15% of total payment volume, by 2019. By becoming an early adopter in mobile payments, retailers can show consumers that they care about privacy and convenience. A more traditional form of payment, credit and debit cards, are also about to get a big, and costly, upgrade. Cards will be transitioning from magnetic strips to the more fraud-proof smart card with computer chips. The $33 billion change breaks down to investments by banks as well as retail locations. Banks are in the $8 billion process to replace consumer cards and early estimates are that retailers will have to pay over $25 billion to replace the current machines. Total cost of the upgrade for retailers could range from $2,000 for one store up to $100 million for large chains. Stores will be incentivized to make the change before October by having non-compliant stores pay for fraudulent charges.

Services offered to customers enhanced by technology continues to be an area filled with new offerings. Amazon, as a big player in this space, has expanded their foray into the grocery world in two ways. The recently debuted Amazon Dash will place wi-fi enabled buttons throughout a consumer’s home for instant orders on staple products, the balance here will be around privacy versus convenience. The second Amazon announcement was the extension of the Amazon one-hour service into the Dallas area following previous announcements for Manhattan, Brooklyn, Baltimore, and Miami. Amazon’s continuous growth in the delivery space will push traditional retail formats to offer enhanced services to retain loyal customers. Offering in-store wi-fi is a small, but effective, service retailers can offer that a recent study linked to customer loyalty. Lisa explored this idea in a previous blog post.

Enhanced services are taking an automated route as well. Mondelez recently announced the trial of ‘virtual promotion assistants’ in select European markets. The virtual assistant is an easy to move unit that will display a variety of messages to consumers in a more engaging manner than traditional signage. While the virtual assistant is still in exploratory stages, self-ordering kiosks do have a more widespread presence. Despite being more readily available, they are still a bit of an enigma. While kiosks may not make sense for all customer segments or all departments in the deli they are almost guaranteed to increase basket size from 25-75% and pay for itself in three to five months according to Progressive Grocer.

As retailers face increasing competition from non-traditional grocery formats, adding technology enhanced services is an easy way to provide additional value to customers without adding employees. The CART team does a great job at discussing these at a high-level and how independent retailers can embrace technology to continue to compete with large chains, and non-traditional grocery providers.


Why do I work at AWG? “I chose to work at AWG because I want other people to love shopping local grocers as much as I do.” -Andrea