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Views: 13 Author: Cindy Publish Time: 2023-04-28 Origin: Site
In 2022, European grocery was characterized by unprecedented inflation and increasing consumer price sensitivity. Consumers traded down, and grocers experienced substantial cost pressure. Global market research company Euromonitor International also released 10 key trends of global consumer in grocery retail industry, of which more cautious and conscious consumer factor was emphasized. That is to say, uncertainty in grocery retail is becoming more and more common.
On the other hand, new technological products are emerging in physical retail market, including smart shopping carts, customer service robotics, self-checkout kiosks. etc.
As a marketing specialist working in retail industry, I think all these uncertainty (key trends) in grocery retail accelerates the smart shopping cart market development.
There are 5 reasons:
(1) Inflation makes consumers become more cautious and conscious. Smart shopping cart ease the cautious and conscious.
Inflation is always and everywhere a monetary phenomenon, well now in retail industry, inflation has caused consumers become more cautious and conscious.
In Europe, inflation was the leading topic on the minds of consumers, grocery retailers, and suppliers throughout 2022. You can see in the picture blow that retail market dynamics were characterized by inflation. The direct effect caused by inflation is that household economy experienced a significant pressure, then many consumers traded down.
Source: The state of Grocery Retail 2023 by McKinsey&Company
Because of high inflation, the margins of many European grocery retailers came under substantial pressure. So grocery retailers are appealing for new technologies to provide ultimate shopping experience in physical shopping.
Under this circumstance, smart shopping cart may help a lot. For example, SuperHii smart shopping carts in Japanese supermarket provides consumers a frictionless shopping experience and quicken the shopping trip, charging port and umbrella hanging hook were also added on the smart cart, consumers have made lots of positive comments and prefer to use it. To some extent, smart shopping carts encourages consumers to visit retail store more times and ease their cautious and conscious.
(2) Retailers are less pessimistic about retail market conditions. It’s a good chance to bring in smart shopping carts.
In 2022, the impact of the Covid-19 pandemic on the sector had largely concluded by the end of the year. We may think the whole retail industry is recovering. According to McKinsey &Company research on European retail market, surely retailers are less pessimistic about retail market conditions in 2023 compared with last year. See the picture below.
Source: The state of Grocery Retail 2023 by McKinsey&Company
Technological changes make improvements. And in 2023, it is a good chance for retailers to deploy some technical devices to upgrade their stores. Smart shopping cart is a good tool to make a normal retail store become intelligent.
Imagine a typical shopping process using a SuperHii smart shopping cart, consumers scan items bar codes by themselves, skip the cash counter and check out by themselves. The smart shopping cart provides consumers a smooth shopping experience, coffee holder, mobile phone charging port on the smart shopping cart enrich and improve consumers’ shopping experience.
(3) Consumers are more price sensitive, smart source shopping cart advertisements and precise marketing helps them a lot in shopping.
Price sensitive consumers are usually mentioned to discuss how the price of a product affects consumers’ purchasing behaviors.
In the retail industry report revealed by McKinsey&Company, they found that saving money on food remained a top priority for both high-and low-income consumers in 2023. At the beginning of 2022, respondents said they want to save money on food by households. See the picture below.
Consumers are more price sensitive when they are shopping, smart source shopping cart advertisements and precise marketing help them grab items which are on discount price quickly.
Source: The state of Grocery Retail 2023 by McKinsey&Company
For instance, SuperHii smart shopping carts are designed to record consumers’ historical shopping data, and at the second time when consumers are shopping, the smart shopping cart recommends precise coupons, promotional information and related items at right occasion. This right occasion means if you buy some bread, the smart shopping cart will recommend you some sauce information.
This means the smart shopping cart help you acquire discount information and coupons very quickly, which is beneficial to price sensitive consumers.
(4) Consumers are facing continued margin and cost pressure. Smart shopping carts help increase sales revenues.
According to McKinsey&Company report, the profitability of grocers was hit hard in 2022, and the pressure on margins, cash flows, and the cost of capital is likely to stay high in 2023. See the picture below.
Source: The state of Grocery Retail 2023 by McKinsey&Company
McKinsey&Company predicts that cost and margin pressure for grocery retailers to remain high because salaries are likely to grow and many cost increases have not yet reached grocery retailers.
When cost and margin pressure are increasing, retailers are thinking of increasing their sales revenue. Deploying a smart shopping cart project is a good way to decrease the operating cost and increase sales revenue.
The smart shopping cart provides a fresh and new shopping experience for consumers, this can help improve the store image and boost store foot traffic. Besides, the smart shopping cart sends related items to consumers through various ads on the touch-able screen, the average transaction value will also increase.
For instance, due to the personalization capability of the SuperHii AI smart cart, branders can target consumers with personalized offers and recommendations as they are shopping. As a result, in Japan, SuperHii smart shopping cart increase consumers’ average transaction value by 17.2%, correspondingly, the sales revenue increase by 4%.
(5) Systematic scaling of automation and technology is still a trend, and smart shopping cart is a option.
Technology remains an important driver of value creation for the retail industry. The automation of warehouses and stores continues to accelerate. In 2023, the EU-27 automation market for retail was worth €2.5 billion. It is expected to grow at an annual rate of 13 percent in the coming years, reaching about €6 billion in 2030.
Automation and technology is still a trend, among which, generative AI(GenAI) has the potential to unlock the new value pools. The most promising examples of GenAI applications are expected to be in marketing and customer interaction.
Source: The state of Grocery Retail 2023 by McKinsey&Company
As a new emerging technology in retail industry, smart shopping cart can meet the 2 requirements (Marketing and customer interaction) at the same time.
In the shopping process, there will be both voice and words guidelines on the smart cart to guide consumers purchase items and check out by themselves. If there are mistaken steps, smart carts know and will notice consumers to do the right operation. Once consumers log in the smart shopping cart system, personalized content and items information will also be send to consumers in the shopping journey.
As more uncertainty continues to evolve in the retail industry, we will likely see an even greater proliferation of smart shopping cart projects in the years to come, because smart shopping cart is the best option to respond to uncertainty. To the contrary, these uncertainty accelerate the smart shopping cart market development.(Author:SuperHii, Cindy Xin)
Reference2:https://www.mckinsey.com/industries/retail/our-insights/state-of-grocery-europe
