Progressive Grocer Independent

DEC 2016

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16 | Progressive Grocer Independent | December 2016 A lthough the products in your supermarket are always changing, the basic technology has remained pretty much the same since the invention of the bar code. But vast change is cur- rently underway in grocery, accord- ing to findings in a study by Pro- gressive Grocer Independent and the research firm Carbonview, which are both part of EnsembleIQ. A digital transformation is well underway and rapidly rebooting the foundational pillars of food retailing. By digital transformation, we mean a strategic embrace of busi- ness models, processes and customer services that leverage new digital technologies. is embrace is aimed at developing new opportunities to grow sales, increase productivity and improve the shopping experience through the addition of new services and streamlined conveniences. Although grocery is a late arrival to online shopping, click-and-collect, mobile POS and a few other tech- nology innovations, the findings in this study indicate that many grocers have already invested in some of these technologies, while others may need to catch up. And catch up they must. Online competition is fierce and getting fiercer. It's coming from Amazon Fresh, Peapod, GrubMarket and Instacart, as well as Walmart and Target, both of which continue to make major investments in new digital technologies and innovative business models. Technology Digital Marketing e good news for grocery is that an overwhelming majority (86 per- cent total industry and 81 percent independents) say that spending on digital marketing has increased year over year. e rest say it will remain the same. None (0 percent) had decreased their budgets. From this finding, it's clear that grocers have embraced digital marketing. (See Figure 1.) Benchmarking grocers' commitment to digital transformation. By Joe Skorupa and Katie Martin (portions reprinted from RIS News ) Dawn of the Digital Grocer FIGURE 1 How has your company's spending on digital marketing changed year over year? Total Independents Increased (net) 86% 81% Increased > 10 percent 14 23 Increased by 6%-10% 37 28 Increased by 1%-5% 34 30 Stayed the same 15 19 Decreased (net) 0 0 2016 Survey

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