Undoubtedly, the pandemic has escalated consumer comfort levels when shopping online. However, yesterday’s International Fresh Produce Association Virtual Town Hall took a closer look at the ways in which retail technology can help drive consumption of fresh produce.
Jonah Parker, director of IRI Fresh Foods, opened the session by looking at where consumers are today with online shopping. As she noted, 11.7 percent of all food and beverage retail is sold online, a figure that includes produce. This is also happening in the food industry – in 2019, Parker noted that six percent of all restaurant commerce was done online. Now that figure is 14.6 percent. “That’s almost 15 percent of all restaurant traffic coming through digital alone,” she said. “Our future growth is coming online now.”
As she notes, Amazon accounts for 11 percent of all food, beverage and grocery purchases across all channels. “That doesn’t mean Amazon is killing it in manufacturing. However, if you are used to going online for almost everything else in your life, why not start thinking about going online for products?” she asked. “The reality is that digital and other players have changed the fresh food landscape.”
Left to Right: Jonah Parker, Heather Paquette
Berries are a leader in online manufacturing
Of the products that are purchased, berries are the leader in fresh produce consumption, closely followed by apples and fresh salad sets. “Notably, when it comes to product sales online, more than a quarter of all products sold in the digital e-commerce space come from these three categories,” she said.
Parker also noted the importance of digital shopping and the next generation of shoppers. Shoppers under 40 spend 1.2 times more on fresh food online than their generational counterparts. “When a person under the age of 40 buys products online, they spend 22 percent more on products online than in store. Not only are they more digitally savvy – they’re more likely to engage and build online as well,” she said. “This generation is digital native. It’s a changing environment for younger consumers, and the more we can make the online and in-store experiences seamless, the better.”
This includes the way food is marketed and sold. With Millennials and Gen Z, nearly one in five of them have found a product they love and buy regularly because of social media. (Compare that to 1/2 or less than 10 percent of Baby Boomers or Gen Xers.) “So what you do online is going to change the way they shop, and it’s more than changing a display or putting up a sign Parker said. “We’ve seen this in fresh foods that have gone viral and have a direct impact on in-store sales. Watermelon and mustard for example – it was a thing on social media this summer and has led to a lot of watermelon sales this year among younger people.”
Improving the customer experience
The conversation then turned to the panel and Heather Puckett, Vice President, Retail Innovation Center of Excellence in Retail Business Services, began talking about how retailers are shifting to providing more value to customers and allowing them to choose the experience they want – whether it’s click and deliver, online shopping and pick up more items on delivery, etc.
Left to right: Dorn Weninger, David Stech
“We’re really focusing on what we’ve heard loud and clear from customers, and that’s that they absolutely value partner interaction and want our associates to be there to help them solve problems or help them with their shopping experience as necessary,” Paquette said. This means focusing associate time on customer-facing activities and using retail technology to handle redundant non-customer-facing activities. This could include technologies such as bathroom cleaning machines, delivery automation, product slicing and even self-checkout.
This is even more important given the tightness of the current job market. “Right now, our associates are very valuable to us. I can’t imagine there are many retailers who think they have an abundance of labor,” Paquette said.
Technology and workforce
For David Steck, vice president, IT infrastructure and application development, Schnuck Markets, Inc., the retail technologies of interest are developments such as electronic shelf labels. “Heather is right that labor is valued now. With dwindling labor reserves, no matter how hard you try to put all those tags on the shelves every week, you’re going to miss some and that affects the whole shopping experience,” he said.
It’s also technology that empowers associates to help customers. “We had production associates tell us to help a customer, they were going to use their personal cell phone to download a video on how to cut dragon fruit,” said Steck. “How do we give our collaborators the tools to help?”
Other retail technologies under consideration are Amazon-style technology where consumers’ grocery carts are empowered by camera technology and scales that make checkout touchless, or even in-store shoppers armed with camera technology to help with product selection.
“Less Sexy” Technology
Echoing Paquette’s point about improving customer-facing experiences, Dorn Wenninger, senior vice president of manufacturing, United Natural Foods, Inc., pointed out that sometimes the technology in question is less “sexy.” “So some of the technology is being used to reduce labor throughout the supply chain,” Weninger said. “Last week I was in Peru where they were using automated pallet machines to build pallets. It’s a simple technology that’s been around forever and I think it will be more fruitful. It works creatively to take the noise off the floor and allow associates to give the consumer what they want, which is a fresh product.”
At the same time, technology has also led to some battles between online trends and in-store trends. Wenninger pointed to in-store shopping, which often includes variable-weight items, and e-commerce sales of fixed-weight items. “These are contradictory trends. One trend is to have less packaging and the other is to sell in packaging – how do we thread the needle on both of these trends?” he asked.
Parker concluded the session by emphasizing the importance of the in-store experience. “The majority of people who are Millennials and Gen. Z., do not know how to pick a ripe melon. They trust their store associate more and are not necessarily of the generation where their mother or grandmother showed them how to pick ripe fruit in the store,” she says.