Innovation and Opportunity at Checkout
As we all know, the front-end of grocery and convenience stores is changing. From established innovations such as express lanes and self-checkout to new technology like cashier-less checkout (Amazon Go), click and collect and self-scan, retailers are looking for new ways to improve the shopping experience by providing quicker or more convenient options for checkout.
However, for categories that thrive on checkout-area impulse purchases such as Beverages and Candy, this means that more shoppers are bypassing this area of the store and not being exposed to these products.
To further complicate the matter, shoppers have more distractions than ever due to the prevalence of smartphones. Front-end staple categories now are less likely to catch the eye of a shopper who is checking social media or other bite-sized entertainment options on their phone.
Despite these hurdles, front-end categories, if considered one super-category, would be the number seven category in terms of grocery store sales. And with changing consumer trends like the prevalence of snacking occasions, front-end categories are uniquely positioned to remain relevant and grow as CPG retail continues to evolve.
Understanding the Impact of Innovations
These challenges and innovations have created many opportunities for retailers to try to improve the overall experience of shopping in their stores by streamlining the front-end area. But with so many changes and new technologies, there is still a lot for retailers and manufacturers to learn about how they impact shopper behavior.
The most obvious and easily accessible innovation is to reinvent the assortment and design of the checkout area. This could just be switching around categories or SKUs, but it can also include changing the actual design of the shelves and coolers to better serve shoppers. While retailers will definitely have to make hard choices, the end result should be a win-win-win for the retailer, manufacturers and shoppers if done thoughtfully.
However, things as simple as operations can also have a huge impact on front-end shopping. Shoppers who stand in line too long may be frustrated and unwilling to add to their basket, but shoppers who wait in no line might move through checkout so fast that they don’t have time to shop anything at front-end. Perhaps shoppers who experience quality customer service may be more open to an impulse buy. Retailers must understand how their shoppers respond to different factors in the front-end in order to have the most efficient layout for their unique shoppers.
As mentioned earlier, new technologies such as cashier-less checkout and click and collect are becoming more of a mainstream factor in grocery stores. But as these technologies and other new technologies become more prevalent, retailers and manufacturers will have to study how they impact shopper behavior as a whole. The interplay between new checkout methods and traditional checkout methods as well as store design elements that must be adapted due to these changes can all have larger macro effects that might not be immediately obvious. Also, as with any new technology, scalability and profitability must always be considered when dealing with widespread rollouts of new technology.
While this article mainly focuses on grocery stores, many of these factors similarly apply to c-stores as well. Although we have seen c-stores as a testbed for innovations (most notably Amazon Go), the smaller format makes it unlikely for large investments like that to be scalable and widespread in the near future. (A company like Amazon doesn’t have to worry about the profitability of a few experimental c-stores, but a company that is trying to make a profit in this channel will have to focus on innovations that work for every store.)
With any innovations, it’s important to study and understand how real shoppers react to changes and what impact these new technologies have on shopper behavior. VideoMining offers a Front End Deep Dive for the Grocery and C-Store channels that takes a deep look into the real behaviors of real-world shoppers. Also available is a look at changes over the last five years in front-end behavior to benchmark today’s shoppers against the recent past, which will help retailers and manufacturers understand trends and predict how shoppers will change moving forward. Contact us to learn more.