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Formula for 2020 Vision Includes Focus on Data

Formula for 2020 Vision Includes Focus on Data

Ten years from now, a shopper will walk into one of your stores — maybe not one of your traditional cookie-cutter supermarkets, but a small neighborhood store that had been designed and merchandised for a particular demographic niche.

She will point her smartphone at an item on the shelf, check the display on the device to see if the product contains peanuts (her son is allergic), then peruse some customer reviews of the item, do a quick online price comparison with other stores in the area, and check for any special offers she can download.

If everything meets her specifications, she'll click on a button to pay for it, drop it in her bag with the rest of her shopping and walk out the door.

Or maybe she won't enter your store at all, but will simply pick up the order she placed online. Or perhaps she will have it delivered to her home or office by one of your electric-powered vans. (She chose your store in the first place because of your sustainability efforts.)

Welcome to Food Retailing 2020, as hypothesized in this feature story.

“Marketing to people who grew up in a digital age is fundamentally different,” said John Rand, director of retail insights at Management Ventures Inc., which is part of Kantar Retail. “If we don't grapple with that between now and 2020, we won't have an industry in 2020.”

The industry evolution that will unfold over the next 10 years will not be limited to technological advances, however, according to SN's prognosticators. The recent recession may have paved the way for a new era of growth for small-format, value-driven food retailers, and a battle could emerge among the retailers that already occupy that space and the ones that are seeking to gain entry.

Food retailers will seek to get more productivity out of their existing stores, prompting more tension between suppliers and retailers, while at the same time they will need to cooperate more than ever to share information about their products and their customers.

Inside the store, some retailers will increase staffing — consultant Art Turock suggested that produce could become a service department in some supermarkets — while other operators will find ways to reduce store labor to cut costs even further.

Rick Braddock, chairman and chief executive officer of New York City online grocer FreshDirect, projected a significant increase in online food retailing in the next decade.

Others are not so sure. But interestingly, FreshDirect and other online grocers do have something that will be central to the future of food retailing: a rich trove of customer data, and the ability to leverage it to drive sales.

Access to data will increasingly work both ways. Ten years ago, supermarkets and their shoppers were infants in the Information Age. A decade from now, both will be practiced masters of tools that enable them to target, and be targeted, based on what they can learn about each other at the touch of a button.

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