For decades, the grocery shopping process has remained essentially the same: make a list, drive to the store, grab the usual items in a blur of trolleys and screaming children, stand in a checkout queue waiting for the cashier to find the right price, and spot three 'specials' signs upon leaving that could've saved 80 bucks.
Not the most efficient of exercises, to say the least.
Apart from the advent of online shopping, which is still far from mainstream in SA, grocery shopping has remained relatively untouched by high-end, customer-focused technology. However, as devices and consumer profiles change, so does the supermarket.
Self-service check-outs, for example, have been a feature of major UK chains like Tesco and Sainsbury's for some time, although not without hiccups. Cases of slow service and technical glitches have resulted in customer frustration, to the point where many prefer to wait for a human helper.
Then there's the concept of wireless trolley scanning, whereby shoppers would simply push their trolley of RFID-tagged goods past a scanner, briefly swipe their credit card, and walk out the store.
Global retailers like Wal-Mart and The Metro Group have already employed RFID in their supply chains, to track stock from suppliers to warehouses, distribution centres and stores. This is said to cut down on human error in tracking merchandise, and ensure those popular items are always in stock, in the right numbers, at the right time.
As good as the idea of RFID-aided shopping sounds, there are still concerns over the security and privacy of shoppers' information. Digital spying could take on a whole new bend, and pilot projects remain ongoing.
An idea that goes a step beyond merely tracking goods is being tested by SAP for retail giant Groupe Casino, in its Paris stores. SAP has developed a mobile consumer platform that uses analytics to target promotions at specific individuals, allow for greater personalised interaction, and influence buying habits as shoppers walk down the aisles - that's the aim at least.
You don't want to wait for something if you can get it faster elsewhere.
Darryl Owen, retail VP, SAP EMEA
Darryl Owen, VP of retail and wholesale for SAP EMEA, says the industry is undergoing unprecedented change, and that shifts in consumer behaviour are causing companies to rethink their entire approach.
“For hundreds of years, the retail business has very much been a supply business - the retailer sources products, and hopes people buy them. But a whole lot of things have happened in a short period of time that's putting into question the fundamentals of the industry.”
There are a variety of reasons behind this change, says Owen, one of them being the 'Generation X' behaviour fostered by social networking. “There's been a tendency in the past few years for consumers to provide information on the kinds of products they like to buy, and where and how they want to buy them.”
Marketing is increasingly being pulled by the individual consumer, instead of being pushed in a big blast to a large group of people, says Owen. This marks a shift towards one-to-one relationships, and retailers are opening up systems and processes so consumers can easily provide feedback.
“The whole mentality is changing... there's a lot of trepidation in the industry, but also a lot of innovation. The trick at this point for most retailers is how to project forwards to where consumers will be in two to three years, because that's when their solutions will be ready to go to market.”
Have tech, will shop
According to Owen, the aim is for the SAP/Groupe Casino project to be tested in a store environment from end-June, to see how consumers respond.
“Casino wanted an individual relationship with the customer, where they provide details about what they're interested in and create their own Casino profile, shopping list, and shopping experience - in real-time and on any device,” explains Owen.
Consumers will enter information directly into Casino's retail systems, and can add preferences such as 'allergic to nuts' or 'don't eat pork'. Owen says it aimed to make the app as easy to access as possible, with a social network look which people have grown accustomed to.
He offers a hypothetical situation to demonstrate how the app would work: “If you're planning to do some shopping after work, you go onto the site and pull up your previous purchases - which are already recorded because we typically buy the same things.
“As you're busy putting together your shopping list, the app makes suggestions to you, in real-time, about things you may like, based on your preferences.”
The list is automatically saved, so if a user gets interrupted while compiling it, they can continue adding things later on. Also, if they get home and realise the tomato sauce is running low, they can take a photo of the barcode with their phone, and it will be added to the list, says Owen.
Casino has handheld scanners which will be linked to both the store's and the app's systems, so consumers can scan products as they shop, and receive promotions and suggestions (in line with their preferences) as they pick items off the shelf.
It all sounds very impressive, but Owen admits the success of the system relies on a few key factors. “Based on the tests we've done, the one critical thing you need for this to work is timing. It has to be instant, otherwise it's pointless.”
For example, if the handheld scanner doesn't suggest an alternative product as a shopper takes an item off the shelf, the functionality is lost. “Once you've chosen something and moved on, you don't want to hear about a cheaper option five minutes later, when you're already in another aisle,” explains Owen. “It has to happen at the point of the purchasing decision.”
There's a lot of trepidation in the industry, but also a lot of innovation.
Darryl Owen, retail VP, SAP EMEA
Achieving this level of responsiveness requires specific information from various sources to be integrated and available at the same time, on any device, in a matter of seconds, he says.
“All the data needed to make a proposition needs to be available in real-time. The app has to be able to check the product just scanned, all the products related to it, whether there's a promotion running on that category of products, stock availability, and the customer's preferences.”
Despite the degree of intelligence needed, Owen believes that once the price of mobile becomes accessible for all, and as long as mobile communication networks are reliable, this form of shopping could become viable for every country.
Ditch the trolley
While consumers wait for these kinds of innovations to hit bricks-and-mortar stores, they're turning to virtual equivalents in the meantime.
According to the latest survey on online shopping habits from MasterCard Worldwide, 51% of South Africans who have access to the Internet are shopping online and 75% of those have done so in the past three months.
The survey was conducted from 3 September to 1 October 2010 among 8 500 consumers from 15 markets across Asia-Pacific, the Middle East and Africa.
South Africans who shop online feel this method is more convenient and user-friendly than going to a store, ordering from a catalogue or via a call centre.
However, grocery shopping hasn't made significant inroads yet, with 50% of SA's online shoppers scouting for CDs and DVDs on the Web. Books and art come a close second (45%).
World Wide Worx MD Arthur Goldstuck says online food shopping hasn't changed much in the past few years, and growth has lagged a little behind overall online retail.
“However, we can expect a big shift in the coming year, with Pick 'n Pay expanding their online shopping access to many more areas, and Woolworths also likely to sharpen its strategy.”
He adds that although local consumers are still uncomfortable with the idea of shopping for food online, once they've tried it, the convenience becomes a huge driving force.
Paula Disberry, group director for clothing and general merchandising planning at Woolworths, says a number of its customers are transacting on the site from work, possibly for the time-saving benefits.
“Woolworths' typical customer is the working woman, juggling the demands of a career, children and home, who has time constraints and is looking for convenience,” says Disberry.
“Woolworths has also seen a growth in the numbers of businesses using our services on a daily basis, for office meals, beverages, tea and biscuits and so on.”
Improved connectivity and online experience is the key to driving e-commerce activity in any market, notes Disberry, who adds that Woolworths will continue expanding the range of products available online, as well as the delivery coverage area.
For Pick 'n Pay, adoption has been slow, but progressive. Spokesperson Tamra Veley says customers have become more at ease with shopping online in the past few years.
“As far as trends go, we do find that we have customers who order similar or the same things every month but sometimes respond very well to specials and experiment with new products, including general merchandise.”
Veley adds that the company sees online shopping as an added service, rather than a significant contributor to turnover or profit. “Our online customer base is pretty devoted.”
Shoprite, however, doesn't offer online shopping, as the expense seems to outweigh the benefits for its market. “The additional costs associated with offering such a service is in conflict with the supermarket group's business philosophy to offer the lowest prices on monthly grocery and household product requirements to the mass market of SA,” says spokesperson Sarita van Wyk.
Rethinking retail
Whether on the Web or in the store, retailers will have to up their game to stay competitive in an environment that's facing unprecedented change.
Owen identifies three trends which will transform the retail industry in future, the first being personalisation.
“It's about a consumer who wishes to engage with you and you need to engage with them about what they like, not about what you want to sell them.”
The second major trend is a focus on real-time. “This is absolutely critical, especially in a store environment,” says Owen. “What we're seeing across all generations is the need for immediate information. You don't want to wait for something if you can get it faster elsewhere.”
The final trend is social networking, something Owen says brings many opportunities for retailers, as they struggle to pin down customer needs.
“Lots of retailers are looking very seriously at these trends and recognise that once the spark has been lit in a particular country, or a certain retailer has been successful, consumers will come to demand this kind of approach.”
* Speak your mind: Are shopping apps a helpful tool, or a needless gimmick?
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