Grocery Store Product Managers Get Ready For The Future

Grocery stores are going to have to change to keep up with customer's needs
Grocery stores are going to have to change to keep up with customer’s needs

Product managers for grocery stores have actually had it pretty easy for quite some time. If you think about it, your local grocery store probably has not changed all that much since you were a little kid. Oh sure, now they have organic vegetables and perhaps they create prepared meals, but their product development definition has not really changed all that much. It turns out that big changes are getting ready to come. With the arrival of “shop from home services”, grocery stores are going to have to change in order to stay in business. It sure seems like their product managers are going to have to start to get innovative.

Grocery Stores Are Facing New Challenges

In the world of grocery stores, competition used to come from the grocery store that was located down the road. As long as you had competitive prices and a good stock of foods, you were going to do ok. As the grocery market has globalized, new competitors have shown up and all of sudden competition has started to reach a fever pitch. One of the most significant new arrivals in the grocery business has been the online retailer Amazon. Amazon is offering very competitive prices coupled with quick home delivery. Amazon is also very good at using the data that they collect about their grocery customers to target more customers based on both their shopping and buying behaviors.

Grocery stores in the past never really had to work that hard to get people to visit their stores. Everyone needed to eat so everyone needed to shop for food generally at least once a week. However, with an increasing number of options, it has become a challenge to get customers to visit the grocery store. In a survey of grocery store customers, it turns out that only 47% of these customers said that they shopped for their grocery products in a single grocery store. A decade ago this number was 61%. This means that grocery stores are going to have to determine what their customers really want. In order to do this, they are going to have to get good at mining all of that customer data that they have been collecting.

The people who study the grocery store business believe that with the arrival of Amazon and other online grocery stores, existing grocery stores are going to have to start to work harder to make both the discounts that they are offering and their stores attractive to their customers. As an example of the challenges that they will be facing, each year Amazon spends roughly 12% of their sales on technology. Traditional grocery stores spend more like 3% of their sales on technology. Going forward, grocery stores are going to have to change their thinking and start to view themselves as being more like technology companies.

It’s Time For Product Managers To Show Some Innovation

Clearly grocery store product manager have some real challenges coming their way. The good news is that they are aware of this and they are already starting to take action in order to strengthen their product manager resume. In order to be successful in the future, product managers believe that customer data is going to be their new battleground. These product managers are going to have to be both smarter and faster if they want to have any hope of competing in this highly competitive market. Technology is going to have to be used. One example of this is the use of sensors to detect how many people are in a grocery store. When the number reaches a certain point, additional cashiers are then placed in service. This can help to reduce customer wait time by minutes.

Product managers are continuing to look for ways that they can incorporate more technology into their grocery stores. Sensors can be installed that allow the store to monitor the freshness of certain types of produces. Additionally, if any of the coolers in a store experiences a failure, the store manager can be immediately notified so that they can take action before any food spoils. The next step in all of this new technology has to do with the shelves where the actual products are displayed. New technology that is set to roll out soon will allow store shelves to recognize and communicate with apps on the phones of shoppers who are close to a given shelf. The app on the phone will know about the customer’s shopping habits and using this information, the store shelf will display a customized banner ad that is targeted at this particular customer. Information could tell the customer that the item was gluten-free or nondairy.

A good example of product managers who have risen to the challenge that is posed by the new grocery store market is over at Kroger. They realize that mining customer data holds the key to maintaining customer market share. They were one of the first grocery stores to start to use a customer loyalty program. They did this so that they could collect more data on their customers and then use that data to keep a close eye on their customer’s needs. Kroger sends coupons to over 12 million customers. In order to make these coupons as effective as possible, the Kroger product managers use over 850 algorithms to determine which customers should get which coupons. Using the purchase data that they have collected, Kroger can tell a lot about their customers: if they have started a diet, had children, or retired. Using this information, different products can be marketed to different customers. Going forward, the Kroger product managers want to discover how to use technology to enhance the customer’s store experience.

What All Of This Means For You

As product managers, being responsible for a grocery store used to be a fairly safe job. Simply put, grocery stores had not changed that much in many years. However, these days that has all changed. In part due to the fact that Amazon has entered into the grocery business, now grocery store product managers find themselves under a great deal of pressure to take a look at their product manager job description and figure out how to become innovative in order to survive.

The reason that the arrival of Amazon has caused such changes in the grocery business is because Amazon is offering both low prices and home delivery. Customers no longer just shop at one grocery store like they used to. Unlike just 10 years ago, they are now shopping at multiple grocery stores. With the arrival of Amazon, traditional grocery stores are now going to have to work harder to get customers interested in their discounts and visiting their stores. Grocery store product managers view technology as being the key to their long term success. New technology that tracks the number of customers in the store and monitors the freshness of produce are being installed. The next wave of technology will make shelves smart enough to talk with apps that customers have on their phones and start to display messages that are targeted to specific customers when they approach. Kroger is one grocery store that has realized that they need to change. Their product managers are using customer data to target specific customers with specific offers.

The grocery store business is competitive now and will only become more competitive over time. Product managers are going to have to find ways to keep the customers that they have and attract new ones. Technology will play a key role in how they go about doing this. If the product managers can truly discover what their customers want, then they will have found the secret to their grocery store’s long term success.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: If you were a grocery store product manager, how would you get more people to come to your grocery store?

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What We’ll Be Talking About Next Time

When was the last time that you went out to a mall? For most of us, it’s probably been a while. We used to always go to the mall – that’s where you could get stuff, especially during the holidays. However, with the arrival of online shopping most of us don’t go to malls as much anymore. This has created a problem for mall product managers. Creating and filling a mall with stores used to be a straightforward job for product managers: get a few big stores, get some smaller but still well known stores, and ta-da you had a mall. However, with today’s changing retail situation, mall product managers are having to change their product development definition and how they do their job.