Session PartnerIndians love food and want to interact with it. But, when they walk through the supermarket door, do customers face an adventurous food encounter or just bland merchandise shelf navigation? Can retailers and retail support technologies help convert this journey to an exciting, sensory experience?
Today’s shoppers are seeking experiences and relationships when they shop and look for an outing, and they want the experience to be consistent across all touchpoints. Who the consumer is, in addition to how, where, and even why they shop, is changing rapidly and forever. ‘Humanising’ supermarkets and restaurants requires retailers to leverage store design, engagement and technology around experience and culinary inspiration.
Progressive Grocer capitalised on insights from some leading food and retail support businesses at a 60-minute focused Roundtable discussion.
Retailers worldwide are rethinking overall user experience and more interactive store experiences. As more and more consumers gravitate towards online commerce, physical retailers are progressively imbibing a 360-degree approach that blends personalisation with convenience.
According to analysts, the shift to all things fresh and less processed is being driven by the approach that the quality of consumption has a direct impact on the overall life quality. Shoppers typically want direction, guidance and inspiration. They are motivated to improve lifestyle quality – their bodies, relationships, work and home life.
Can food retailers therefore, deliver microlocalisation of merchandise mix and menus to build custom-tailored experiences, especially for millennials, asked COO, IMAGES Group and moderator of The CXO Roundtable at India Food Forum 2017, Bhavesh Pitroda, on ‘The Art and Science of Millennial Shopping’.
Participating speakers included Senior Director, Philips Lighting, Sukanto Aich; MD, Pizza Hut (India Subcontinent), Yum! Restaurants, Unnat Varma; Founder & CEO, The Magsons Group, Kirit Maganlal; Head Merchandising, Health & Glow, Madhumita Mohanty; Head – Projects (Real Estate), Tata Starbucks, Vishal Shah; Country Food Head, IKEA India, Henrik Österström and Head – Supply Chain Management, Patanjali, Shyam Iyengar.
“Customers are clearly looking at unique experiences and products that suit their sensibilities and environments,” Madhumita Mohanty noted, opening the discussion. “When it comes to food, this is especially evident. Customers today want to replicate global foods on their dinner tables.”
According to her, customers are increasingly expecting retailers to become more ‘intimate’, via the deployment of technologies such as geo-mapping services to recommend products and services based on past purchase histories.
“There was a time when food was fuel. Now, it is about experiences,” Unnat Varma added.
“For millennials, because of technology, the moment there is an experience, it is worth sharing. Experiences form the bulwark of their social status. Therefore, the more shareable content that brands can present to them, the better it gets for the brand’s relevance in their lives.”
“In food, what matters now is how it is being packaged and presented. If it is worth capturing and sharing, it improves the user’s social currency in his or her network,” he asserted.
“Second, brands and retailers need to deeply understand whatever is happening in consumers’ lives. They need to read the triggers, the aspirations and moments-of-truth, and use those insights to design truly ‘connected’ products and marketing campaigns,” Varma added.
Speaking for Tata Starbucks, Shah disclosed that while the graduation to extensive online communication in work-in-progress at the chain’s Indian operations, the foodservice giant is in advanced stages of rolling out an app to connect more closely with customers.
For new brands, how does technology help in transitioning from customer acquisition mode to customer retention mode?
Referring to the Patanjali Ayurved – arguably India’s fastest growing FMCG brand – experience thus far, Iyengar said: “In the west, the customer world is a DIY model. Not so in India. In the Indian context, I believe that technology is always an enabler, not an end in itself. For a brand or retailer, the last mile – which is always a human interface – determines how an acquisition is converted to a loyal customer.”
“If you want to deliver extraordinary experiences, in India, technology has to work with the human component,” he added.
Against the Grain
Sounding a contrarian note to modern retailers’ rising pre-occupation with the need for technological deployments to connect with consumers, Kirit Maganlal pointed out that customer experiences in small cities and regional markets are driven by entirely different considerations from those in large metros.
“Most retailers point out to how connected today’s consumers are, and how everybody wants transactions and customer-engagement online-enabled. In places like Goa, it is quite the reverse! Customers in regional markets typically prefer the real-life touch and feel experience,” he said.
Emphasising this perspective, Maganlal explained that Magsons’ 6,000 sq.ft store in Caculo Mall, Panjim generates as much sales revenue as one of the 12-store chain’s initial 1,000 sq.ft outlets.
“The former is a more ‘commercial’ store, where customers are known by their loyalty card numbers; at the latter, customers are referred to by their names. But the sales numbers are practically identical!” he stated.
To many it may look like an unlikely mix, but to the world’s largest furniture retailer, food is a critical anchor of customer experience. Inheriting a strategy devised by founder Ingvar Kamprad in response to the observation that shoppers were leaving as they grew hungry, IKEA has placed restaurants inside almost every one of its 392-plus locations across the world.
“Food is a key component of IKEA’s strategy because of its capacity to attract shoppers. Food is a big part of the brand and the idea. Shoppers aren’t happy when they have an empty stomach. The food business is very important; we think it’s a driver to our stores. It’s about the whole experience,” Henrik Österström stated.
For IKEA, the objective is simple; the retailer wants customers to stay longer in their stores and food is an almost fail-safe mechanism to ensure that. In India, where IKEA – the first major single brand retailer to be given FDI approval to set up retail operations in the country – is set to open its first store in Hyderabad later this year, this strategy will be replicated.
“Globally, we have two foodservice formats in our stores: a restaurant and an exit cafe. And that will be replicated in India as well,” Österström informed. “Th e restaurant will off er two distinct menu ranges – about half will be quintessential Indian favourites, and the other half will compose Swedish specialities, because that is our uniqueness.”
To illustrate the format sizing, Österström disclosed that in the upcoming Mumbai store (to open in 2018), the 42,000 sq.ft space will include a 2,800 sq.ft restaurant with 1,000 seats.
Internationally, food contributes about 5.5 per cent to IKEA sales, though this number in Asia is higher due to higher population density. In Sweden, the retailer has 70 stores for 10 million people – roughly the same population as of Hyderabad, where IKEA is opening one store.
Sukanto Aich, the only non-retailer at the Roundtable, presented a unique perspective on the aesthetics-technology blend in the creation of memorable customer experiences in food retail.
“Sure, the reality is that the customer is connected. But, there are also many ways to benefit from that behaviour,” he said, addressing the retailers on the panel. “At Philips Lighting, our motto is ‘Light Beyond Illumination’, and that is what we are trying to do via LED technology.”
Food retail is a slim-bottomline business, and the first obvious advantage of the increasingly ubiquitous use of LED lighting is energy – and cost – saving. But there are far more substantial applications of intelligent lighting solutions, Aich stated.
Connected lighting systems from Philips add a whole new level of responsiveness to interior retail and hospitality spaces. Connected lighting combines sophisticated, intuitive lighting management software, digital controls, and best-in-class Philips luminaires to give retailers centralised control of every light point in their environments. “With deeper insight into your customers’ activities and preferences, retailers can tailor lighting to create welcoming and memorable experiences while achieving the energy efficiency and sustainability goals that are the cornerstone of the brand,” Aich said.
How many retailers are using analytics to drive customised experiences, he went on to ask. Because that is precisely what Philips has implemented at the Lille, France store of hypermarket chain Carrefour. In a revolutionary technological innovation, Philips has created the concept of Indoor Positioning, much like GPS.
Through this technology, data-enabled LED lighting systems connect to customers’ smartphones (via the Carrefour app called Promo C’Ou), and can collect and send relevant information using wireless communications and iCloud services.
With visible light communications (VLC) from Philips, a unique code can be transmitted through the beam of LED light. This code can be detected by a smartphone’s camera, creating a real-time link between the shopper and the lighting system. As a result, it’s possible for the shopper’s smartphone to know exactly where it is and show relevant maps, product information, and promotional coupons.
The technology requires shoppers to opt in to accept information via an app. Since the data stream is one way, users’ private information is safe, Aich informed the discussion panel.