Digital innovations to improve not only the online customer experience but also the in-store shopping experience remain central to almost every major grocery retailer’s digital transformation strategy.

This is according to our new ClickZ Intelligence UK Grocery Retail Digital Report, which also contains detailed profiles of the top six brands including Tesco, Asda, Sainsbury’s, Waitrose, Ocado and Morrisons, with a focus on their digital transformation and digital marketing strategies, their attempts at innovation, agency relationships and organisational structures.

Ocado’s digital innovations have been the most robust, primarily due to it being a pureplay online grocery provider; with automated warehouses and robotics being its two main areas of focus.

Among retailers with an online and brick and mortar presence, Tesco has made the largest investment in digital innovations in areas of customer experience, mobile payments, virtual stores, social networking, mobile couponing and beacon technology. Meanwhile, Morrisons’ digital transformation journey is the most under developed owing to its late adoption of the online business model.

Here are five of the most exciting digital innovations being used by major retailers across the world:

  1. Virtual stores: Yihaodian, China’s largest online grocer, set up 1000 virtual stores in various parks, college campuses and office spaces. Similar in layout to a physical store, they are not visible to anyone who is not connected to the retailer’s app through their smartphones. However, those who are, find an entire store completely stocked with virtual food items which that can be scanned with a smartphone and put into a virtual grocery basket, for delivery at a later time.
  2. Temperature controlled Click and Collect: Waitrose and Asda are using automated temperature controlled lockers to store online orders to be collected at a later time. Waitrose sends its customers a text message with a PIN, which they use to (Read more...) their shopping. Asda’s lockers can be activated by using the Asda app on the user’s smartphone to scan a QR code.
  3. Facepay: a technology that debuted at in the 100% Genuine Imported Foods stores in Shanghai at the end of 2014, allows customers to pay for their goods simply by standing in front of a machine that scans their face and hands.
  4. Digital shelves: Kroger is currently testing the smart shelves technology with various applications including displaying nutritional information and connecting with a consumer’s smartphone.
  5. QueVision: Kroger has installed QueVision infrared cameras which detect body heat to determine the number of checkout lanes that need to be open in order to reduce the customer’s average wait time.

Apart from the innovations already in mainstream use, there are others that are in the development stage and could potentially not only change the entire shopping experience but also how produce is grown.

Agropolis is one such futuristic supermarket which is likely to have the provision to grow all produce inside the store. The Future Market is another innovation currently in the concept stage, which aims to build a pop-up shop the way it will exist closer to the year 2065.

Russian inventor Semenov Dahir Kurmanbievich has recently filed a patent for a drive-through supermarket which would enable customers to drive up to an available bay and complete their shopping without getting out of their cars.

North America and Europe are the markets currently witnessing maximum digital disruption in the grocery retail sector. High growth markets in the BRIC countries and South Africa are poised to follow the same course of growth in the coming years.

Data-driven marketing for behavioural targeting and an ‘always on’ approach to content Blog ad spendmarketing are two of the most common digital marketing strategies, driving ad spend in the sector; which is estimated to increase from over £720m in 2014 to over £900m in 2020.

Asda has taken data driven marketing a step ahead by using its vast repository of consumer data to launch an advertising exchange in order to programmatically buy and sell ad space. In 2015, the retailer began selling unsold ad units across its various platforms programmatically through Google’s DoubleClick for Publishers ad server and Rubicon Project’s supply-side platform.

In an attempt to revamp its marketing strategy Tesco has created a ‘content and conversation’ group in order to adopt the ‘newsroom approach’ for its content marketing strategy and continuously create relevant content in today’s era of real-time marketing.

Growth of click-and-collect services, mobile coupons delivered using beacon technology, Internet of things, rise of the chief digital officer and customer engagement through social media are some of the key trends impacting the market.

ClickZ Intelligence subscribers can download the UK Grocery Retail Sector Report here. Watch out for our US version coming soon.

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A bar chart showing survey responses to the question, "Does your company have a formal digital transformation plan?" 42% of respondents (shown with a blue bar) answered yes, while 47% of respondents (red) answered no, and 11% of respondents (yellow) responded with "I don't know."

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