With the grocery business now stretching into cyberspace via websites and apps, Americans have never had so many choices in how, when and where to shop for products such as steaks and cereal.
Consumers can shop online and either pick up the order or have it delivered to their homes. Inside stores, meanwhile, technology is changing the shopping experience.
For a glimpse of how technology can affect shopping, consider Kroger Co., whose 2,778 stores make it the largest supermarket chain in the U.S. Kroger has deployed cameras and infrared sensors to monitor foot traffic, and is using data algorithms to help schedule cashiers in real time. Its mobile app can analyze shopping habits and produce relevant digital coupons. Kroger’s latest move: testing sensor-laden interactive shelves that detect shoppers in the aisles via their smartphones to offer them personal pricing and product suggestions as they walk along.
“We want to bring technology to life in the store,” says Chris Hjelm, Kroger’s chief information officer since 2005.
Building technology into physical stores is crucial, as the 134-year-old company faces growing threats from rivals such as Amazon.com Inc. and Wal-Mart Stores Inc., which are boosting efforts to sell groceries in multiple channels. While Wal-Mart expands online grocery sales, Amazon in late 2016 went physical. It opened a cashierless Amazon Go convenience store, where customers scan their mobile phones at a kiosk upon entering, pick sensor-tagged items and see the tally charged to a mobile payment account.
In an interview, Mr. Hjelm discussed the imperative to make store shopping more like online shopping—cutting wait times and creating a more interactive experience—with technology such as the Internet of Things, data analytics and video. Edited excerpts follow:
Analyzing wait times
WSJ: Which technologies are key to Kroger now?
MR. HJELM: We’re in the midst of deploying our video-management system, with new cameras that are all digital, and analytics technology to understand what we’re seeing. We’re running a pilot to do service queuing for the pharmacy, meat department or deli. It isn’t like everybody stands in a nice line, like they do at checkout. People come from the left side, they come from the right side. We can use video to not only detect how many are there but how long they’ve been waiting. If you’re a pharmacist, your head is down at the computer, working. We can alert you right on your display that you’ve got a customer who’s been waiting for 60 seconds and no one’s talked to them yet.
WSJ: So those little paper ‘Now Serving’ numbers don’t cut it?
MR. HJELM: Customers get frustrated. They may have been there second, but they don’t get served until third. Or, if they are waiting too long, they can sometimes walk away. We can use this data to analyze what is the appropriate wait time. Stores are big and complicated. We need to make them simple.
WSJ: How is Kroger changing stores?
MR. HJELM: We’re helping customers create “favorites” lists on our mobile app. We want to make sure they’re taking advantage of digital coupons. We’re expanding ClickList, which is a system to let you order online and pick up in a store. It’s in 441 stores now. We just launched same-day order and pickup. We’re testing delivery, as well.
The digital shelf
WSJ: How viable is Amazon’s cashierless idea?
MR. HJELM: It’s neat. Certainly, it’s doable. In a constrained, convenience-store format with a very limited set of product, it makes it a lot easier. But there are complexities, like making sure you deal with bad customer behavior—people who put items back into the wrong slots. I haven’t seen it yet, but I certainly will the next time I’m in Seattle.
MR. HJELM: We have Scan, Bag, Go, which is a shopping solution where you use a wireless hand-held device and scan items. You bag them as you go, the way you want them bagged. Then you stop at checkout to pay and we send you on your way. I shop that way a lot. It’s in about 15 stores around Cincinnati. So with Scan, Bag, Go, we are kind of there. We’re now integrating mobile payment credentials, so you can avoid that last checkout step in the process.WSJ: Will Kroger go cashierless?
WSJ: How else can stores use data to interact with consumers?
MR. HJELM: We’re testing digital shelf edges in 14 stores. Sensors can detect when someone is walking down the aisle [with Kroger’s mobile app open]. I can highlight products for you on a high-definition display on the shelf edge. Let’s say you’re gluten-free. In the nutrition-bar section, I can highlight for you the gluten-free products. Or I could show you on the shelf your personal price for a product. Or highlight that bottle of wine on your shopping list. You’ve told me what you like and what you want. I know what’s in the aisle, and I can fuse all that data to create a magical experience. We’re working on it; it isn’t deployed yet.