Market Basket Musings: Technology in Grocery

Tech Innovation in CPG

Welcome to Market Basket Musings, Salud Brand Management’s monthly newsletter covering all things CPG. This month, we’re looking into technology and how it is reshaping the grocery industry right before our eyes.

Not too long ago, grocery stores were rarely associated with innovation. In fact, the industry had a reputation for being more antiquated than cutting-edge. But in recent years, events like Amazon’s acquisition of Whole Foods and the COVID-19 pandemic have accelerated change. Before the pandemic, online grocery shopping was rare—today, it’s an expectation. If a retailer lacks an online store, they risk appearing outdated and unappealing to digitally-savvy consumers.

This transformation shows how quickly the industry can evolve. Let’s explore some of the most exciting technological advancements driving this change:

Self-Checkouts: Convenience Meets Controversy

While self-checkouts began appearing in the early 2000s, their presence exploded in the late 2000s and 2010s. Today, they’re in almost all large grocery stores. However, they remain polarizing: retailers appreciate the labor savings, but concerns about increased shrinkage (e.g., theft and scanning errors) have sparked debates about their overall value, especially in the past year.? Many retailers are now abandoning them altogether.

Augmented Reality (AR): Engaging Consumers

The release of Pokémon Go in 2016 brought Augmented Reality technology into the mainstream. Now, brands are leveraging AR to create immersive in-store experiences that engage customers on a deeper level. For example, Salud worked with Tucan Holistic, the first olive oil company to launch an AR label. These innovations demonstrate the potential of AR but require careful execution to avoid being perceived as gimmicky.

Gamification: Turning Shopping Into Play

Gamification—the application of game mechanics in non-game settings—has gained momentum since the 2010s. In grocery, it’s used to boost customer loyalty and engagement. For example, Community Natural Foods recently launched an app featuring gamification elements that encourage repeat purchases and foster brand loyalty. By tapping into our natural drive to “win,” gamification can be a powerful tool for both retailers and brands, even when the award is something as little as a digital trophy or a medal.

Smart Shelves: Real-Time Inventory Management

Smart shelves build on the concept of digital shelf talkers by incorporating real-time inventory tracking. Equipped with sensors and RFID technology, these shelves help retailers maintain stock levels, reduce shrinkage, and improve the shopping experience. While not yet widespread, they represent a potential future standard in retail technology.

Sustainability: Fighting Food Waste

Food waste is a growing concern, with millions of tons of edible food discarded annually. Innovations like Flashfood are making a difference. This app allows consumers to purchase discounted food nearing its best-before date, helping reduce waste while saving money. Sustainability is here to stay. Governments and consumers are now working together to address sustainable initiatives.

Walk-Out Technology: A Glimpse Into the Future

When Amazon introduced its “Just Walk Out” technology in Amazon Go stores, it felt like a scene from a sci-fi movie. Shoppers can grab items and leave, with purchases automatically charged to their account. Although it has been facing intense scrutiny as of late, it shows that sometimes you need to dream it in order to make it a reality, even if there may have been some misleading going on.

Interactive Displays: Educating Shoppers

Thanks to smaller, faster, and cheaper tech, brands are creating interactive displays to educate customers. For fans of the TV show, Superstore, Hologram Myrtle is a glowing example of where interactive displays are heading.

Robotics: The Workforce of the Future

Robots are no longer just the stuff of fiction—they’re already here. For instance, some Walmart stores use robotic floor cleaners that operate autonomously. As robotics technology improves, we can expect to see even greater adoption for tasks like inventory management, restocking, and even customer service. Going back to the TV show, Superstore, an ongoing theme in the show is based on inefficient robots replacing people.? However, robots are probably closer than you think.

Virtual Reality (VR): Training in the Metaverse

While VR has been around for decades, it’s only recently become mainstream, thanks to advancements in gaming. In grocery, VR is being used to train employees in realistic simulations, such as handling difficult customer interactions or practicing safety protocols. This immersive training approach can improve employee preparedness and confidence.

Drone Deliveries: The Next Frontier

What once seemed like a joke is now becoming reality. Drone delivery is in development, with the potential to revolutionize how groceries reach customers. Imagine small drones zipping around your neighborhood, delivering essentials directly to your doorstep. While widespread implementation is still years away, it’s a technology to watch. Canada even has a company operating out of Calgary dedicated to drone delivery.

The grocery industry is no longer standing still. As technology evolves, so do the opportunities for innovation in retail. From sustainability-focused apps to robotic assistants, these advancements are changing the way we shop and interact with stores.

Thank you for joining us for another edition of Market Basket Musings. Be sure to follow our LinkedIn page: Salud Brand Management LinkedIn for more industry insights. Don’t forget to check out our Instagram (@saludbrandmanagement) for a closer look at our brand partners.

Let’s keep the conversation going—what technological trends do you think will shape the next decade of grocery? What excites you most about the future of grocery technology?