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How does retail technology help drive produce purchasing?

by Ozva Admin

The pandemic has undoubtedly escalated consumers’ comfort levels with online shopping. However, yesterday’s International Fresh Produce Association Virtual Town Hall took a closer look at the ways in which retail technology could help drive consumption of fresh produce in particular.

Jonna Parker, director of IRI Fresh Foods, kicked off the session by discussing where consumers are today with online shopping. As she pointed out, 11.7 percent of all retail food and beverages are sold online, a figure that includes produce. It’s happening in foodservice, too: In 2019, Parker noted that six percent of all restaurant commerce was done online. Now, that figure stands at 14.6 percent. “That’s almost 15 percent of all restaurant traffic that comes from digital media alone,” she said. “Our future growth now comes from the Internet.”

As she points out, Amazon accounts for 11 percent of all omnichannel food, beverage, and grocery purchases. “That doesn’t mean Amazon is killing it on products. However, if you’re used to going online for just about everything else in your life, why wouldn’t you start thinking about going online to buy products? she asked. “The reality is that digital and other players have reshaped the fresh food landscape.”

From left to right: Jonna Parker, Heather Paquette

Berries are a leader in online products
Of the produce purchased, berries lead fresh produce consumption, closely followed by apples and fresh salad packets. “What’s remarkable is that when it comes to product sales online, more than a quarter of all products sold in the digital e-commerce space come from those three categories,” he said.

Parker also highlighted the importance of digital shopping and the next generation of shoppers. Shoppers under the age of 40 spend 1.2 times more on fresh food online than their generational counterparts. “When a person under 40 buys products online, he spends 22 percent more on products online than in the store. They are not only more digitally native, but also more willing to engage and update online,” she said. “This generation is digital native. It’s a seamless environment for younger consumers and the more we can make the online and in-store environment seamless, the better.”

That includes the way food is marketed and sold. With Millennials and Gen Z, almost one in five of them have found a product they love and buy regularly because of social media. (Compare that to half or less than 10 percent of Baby Boomers or Generation X.) “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 have seen this in fresh foods that have gone viral and have a direct impact on store sales. Watermelon and mustard, for example, was a thing on social media this summer and drove a lot of watermelon sales this year among young people.”

Improving the customer experience
The conversation then turned to the panel and Heather Paquette, Vice President of the Retail Innovation Center for Excellence in Retail Business Services, began by discussing how retailers are changing to deliver more value to customers and enable them to choose the experience they want, whether be that’s click and deliver, shop online and pick up more items at pickup and more.

From left to right: Dorn Wenninger, David Steck

“We’re really focusing on what we’ve heard loud and clear from customers and that is that they absolutely value having interactions with associates, and they want our associates to be around to help them solve problems or help them with their shopping experience as needed,” Packette said. That means concentrating associates’ time on customer-facing activities and using retail technology to handle redundant, non-customer-facing activities. This can include technology like restroom cleaning machines, delivery automation, product slicing, and even self-checkout.

This is even more important considering the tightness of the current job market. “Right now, our associates are very valuable to us. I can’t imagine there are many retailers that feel like they have abundant labor,” Paquette said.

technology and labor
For David Steck, vice president of IT infrastructure and application development for Schnuck Markets, Inc., the retail technology that is of interest are developments such as electronic shelf labels. “Heather is right that work is precious now. With the workforce shrinking, no matter how hard she tries to hang all the labels on the shelves every week, she’s going to miss some and it’s going to affect the whole shopping experience,” she said.

It’s also technology that empowers associates to help customers. “We had produce associates tell us that to help a customer, they would use their personal cell phone to watch a video on how to cut pitahaya,” Steck said. “How do we provide the tools for our partners to help?”

Other retail technologies being considered are Amazon-style technology, in which consumers’ grocery carts are equipped with camera technology and scales that enable contactless payment, or even in-store shoppers equipped with camera technology to Help select products.

Technology “less sexy”
Reiterating Paquette’s notion of improving customer-facing experiences, Dorn Wenninger, senior vice president of produce for United Natural Foods, Inc., noted that sometimes the technology being considered is less “sexy.” “So some of the technology is used to reduce labor throughout the supply chain,” Wenninger said. “I was in Peru last week where they used automatic popsicle machines to build popsicles. It’s a simple technology that’s been around forever and I think it’s going to be more prolific. It is working creatively to remove noise from the floor and allow associates to give the consumer what he wants, which is fresh produce.”

At the same time, technology has also spawned some battles between online and in-store trends. Wenninger noted that in-store purchases often include variable-weight items and e-commerce sales with 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 link these two trends? he asked.

Parker concluded the session by also stressing the importance of the personal experience in the store. “Most people who are Millennials and Gen. Z. don’t know how to pick a ripe melon. They trust their store clerk more and are not necessarily the generation where their mother or grandmother showed them how to pick ripe fruit in the store,” she says.

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