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Retail and Foodservice 2025: New Retail Formats

Ed_McKiernan Ed McKiernan | President, Emerson Retail Solutions

Emerson Commercial & Residential Solutions

This is the third installment of our series on the top five trends shaping the grocery retail and chained foodservice markets through 2025.

Emerson worked with global research firm Euromonitor International to identify the megatrends that will have the strongest impact on retail and restaurant operations and facilities management over the next eight years. If you haven’t had a chance to do so, please check out our previous posts, where we focused on the first two trends: Digital Shoppers and Focus on Convenience.

With this post we take a closer look at the next trend: New Retail Formats. In case you haven’t noticed, the way people are shopping and purchasing items is becoming more complex than ever. Consumers, depending on what they need in different situations, are looking to leverage different channels and options that can meet those needs.

This fragmented and polarizing shopping behavior is creating a need for diverged formats that better meet changing demand. As a result, the look and format of traditional brick-and-mortar grocery models is changing. For instance, over the last 10 years, we have seen the square footage of stores consecutively shrink.

So the challenge for retailers and foodservice providers is how to better leverage that shrinking space and adapt new formats to address fragmented shopping behavior and align with the way consumers shop.

One way they are doing that is grocery stores are behaving more like convenience stores. There have been a few examples of this with major food retailers experimenting with smaller square footage stores, which have been expanding across the country and enjoying sales growth. Retail stores such as this have a condensed footprint and focus primarily on grocery items, operating similar to a convenience store in a modified format.

Another change in format we are seeing is the emergence of “Grocerants” that blur the line between retail and foodservice. These can include food service outlets selling packaged products that can be consumed later, as well as a high-end grocery store containing a café. Not only is this type of format providing stiff competition for traditional grocery outlets, they are also providing consumers an alternative to traditional restaurants. Research firm The NPD Group reports that Grocerants generated 2.4 billion visits and $10 billion in sales in 2016.

One factor we expect to further accelerate the new retail format trend is the impending entry of European retailers into the United States market in 2017. These competitors are more like a Trader Joe’s grocery store, offering a nice customer experience and affordable products, rather than a harder discounter that focuses less on the consumer experience. Competitive pressure like these challengers shows that business as usual is no longer an option.

So what should retail and foodservice organizations do in terms of facility management and operations to support the modernization and diversification of retail formats?

  • Facilities – Enhance store layouts and introduce new dining areas to attract specific trip types and drive traffic with dining opportunities.
  • Supply Chain – Offer curated, local assortment of items and value-based merchandizing to fulfill local tastes, provide unique selections and build equity against competitors.
  • e-Commerce – Consider focusing on digital and outsourcing your online infrastructure as a way to satisfy new customer expectations and offsetting declining in-store traffic.
  • Human Resources – Evolve staff skillsets and protocols to provide higher value interactions and experiences to customers.
  • Customer Experience – Focus on convenience-based needs and ensure price points and offered products fit demand to increase basket sizes and foot traffic.

Be sure to join us for our next post, which will take a look at the Fourth megatrend: Experiential Retail.

[New E360 Webinar] Time to Retrofit Racks? Go Digital!

anijayanth Ani Jayanth | Director, Product Marketing

Emerson Commercial & Residential Solutions

Join us for our next E360 Webinar, “Utilizing Digital Retrofits to Achieve Capacity Modulation” on Tuesday, September 26 at 2 p.m. EDT / 11 a.m. PDT.

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Many supermarket retailers today are faced with the prospect of retrofitting their existing refrigeration systems to utilize lower global warming potential refrigerants. While complying with regulations and deploying environmentally friendly systems may be the primary reasons for the retrofit, retailers are also seizing the opportunity to upgrade their systems to provide improved energy efficiencies, tighter setpoints and greater reliability. The integration of a digital compressor in an existing rack — known as a digital retrofit — is becoming an increasingly effective way of achieving these objectives.

Our next E360 Webinar, entitled Utilizing Digital Retrofits to Achieve Capacity Modulation, will explore the potential of digital retrofits. Hosted by Emerson’s Chris Raffel, lead application engineer, the webinar will take a closer look at the digital compression technology behind the architecture and explain how it provides the capacity modulation to greatly improve system efficiencies.

This informative webinar will take place on Tuesday, September 26 at 2 p.m. EDT / 11 a.m. PDT. Attendees will learn about the many operational benefits of digital retrofits, including:

  • Reduced compressor cycling for increased system reliability
  • True load matching capabilities
  • Tighter setpoints for precise case temperatures
  • Significantly higher energy efficiencies than other capacity modulation methods

Chris will also present actual case studies of supermarkets whose digital retrofits achieved measurable energy efficiencies, tighter suction pressures and less food spoilage.

To learn how digital retrofits can provide these benefits in your supermarket, register now for this timely E360 Webinar on Tuesday, September 26 at 2 p.m. EDT / 11 a.m. PDT.

Retail and Foodservice 2025: Focus on Convenience

Ed_McKiernan Ed McKiernan | President, Emerson Retail Solutions

Emerson Commercial & Residential Solutions

Welcome back to the second installment of our series of blog posts that look at the top five trends that will shape the grocery retail and chained foodservice markets through 2025.

As mentioned in our previous post, Emerson commissioned global research firm Euromonitor International to identify these trends and determine what impact these developments will have on retail store and restaurant design and infrastructure.

The firm identified five megatrends that will have the strongest impact on retail and restaurant operations and facilities management over the next eight years. Our first post focused on the Digital Shoppers trend; this one takes a closer look at the second trend: “focus on convenience.”

While components of the digital shopper trend center around creating convenience for shoppers,  there is enough attention on the concept of convenience that it was worth exploring further in its own megatrend.

Everyone can relate to the general issue of being asked to do more with less time. As a result of hectic lifestyles, urbanization, smaller households and hyper-connectivity, time has become a crucial commodity that customers are willing to pay for now. Currently, 83 percent of the U.S. population lives in urban centers, while 65 percent of global consumers are looking to simplify their lives.

So the challenge for retailers and foodservice providers is to become more convenient and provide a level of simplicity for consumers living more fast-paced lives.

This first requires a redefinition of what convenience means. Traditionally it meant having a basic set of staple goods within a suitable location. Today, it has elevated to the next level, with applications such as click + collect, just-in-time delivery, and replenishment models.

Click + collect is ideal for retailers and foodservice providers that are not able to commit to a full online and delivery service. Many, especially grocery retailers, are finding it an easy way to provide convenience without out a significant supply chain expansion. Consumers digitally place their orders and drive to the store location to pick up their order.

The other two applications are being greatly influenced by multiple leading traditional and non-traditional retailers.   Just-in-time delivery is beginning to mean next-day delivery and even same-day delivery. While replenishment models are basically removing the whole idea of shopping from consumers and creating a “set it and forget it” mentality.

Convenience is being redefined with a new store strategy that promises a checkout-free shopping experience.  A recent Wired article noted that consumers using a machine-learning app could enter a store, pick up their products and walk out of the store, without having to interact with a single person. Through RFID tracking on the products, customers will be charged through the app.

So, what should retail and foodservice organizations consider doing in terms of facility management and operations to stay ahead of this trend and customer expectations?

  • Facilities – Reduce stockrooms and develop new front-end designs and pickup areas to ensure speedy service, freshness and maximize sales per square foot.
  • Supply Chain – Adopt a higher cadence delivery schedule with more exact inventory orders to guarantee fresher products and reduced out-of-stocks.
  • e-Commerce – Utilize physical locations for fulfillment and outsource last-mile delivery services to attract online shoppers and allow your business to enter the delivery space quickly.
  • Human Resources – Employ trained personal shoppers and implement new staffing and scheduling to increase customer satisfaction and order capacity.
  • Customer Experience – Focus on convenience-based needs and train customers for new protocols to minimize disruptions and realize potential new cost models.

Be sure to join us for our next post, which will take a look at the third megatrend: New Retail Formats.

Four Keys to Addressing the Technician Shortage

BobLabbett_Blog Bob Labbett | V.P., Communications & Channel Marketing, Refrigeration

Emerson Commercial & Residential Solutions

This blog summarizes the Contractor Connection column in our most recent E360 Outlook, entitled Answering the Call.” Click here to read it in its entirety.

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It’s estimated that 115,000 HVACR technicians will be needed by 2022 to fill industry jobs. At our latest E360 Forum in Tucson, Ariz., Emerson hosted a half-day symposium entitled “Industry Challenge: Addressing the Technician Shortage.” The meeting assembled nearly 50 contractors, wholesalers, and Emerson leadership team members to take the first steps toward forming a consensus on how to solve this critical technician shortage. Meeting participants were divided into four group ideation sessions that focused on the key aspects of the challenge.

A common theme emerged as each group then presented its insights: the importance of appealing to the current field of job market entrants. Specifically, they identified career attributes that the millennial generation values most, including:

  • The desire to have a meaningful career that contributes to the betterment of society
  • The preference for working with modern technology
  • The importance of selecting a career path that has both long-term security and growth potential

With these drivers in mind, the groups presented four keys for addressing this shortage:

  1. Awareness — because vocational occupations are often overlooked in today’s culture, students with an aptitude for technical trades are not encouraged to pursue vocational or technical training. To overcome this trend, students and faculty need to be convinced that this career path is a viable alternative to a four-year college degree.
  2. Recruitment — engaging millennials requires appealing to their unique sensibilities, including their preference for working with new and emerging technologies, or careers that have a meaningful societal contribution. Studying to become an HVACR technician fulfills these needs while ultimately providing competitive compensation, job security, career growth and low competition.
  3. Training — to ease the process of earning a certification, schools should make training classes more convenient (via online or evening classes) and more affordable. As important, the curriculum should be kept current to cover the latest technologies, refrigerants, and equipment.
  4. Retention — attracting and retaining students requires making them aware of the bigger purpose and meaning the job provides. It also means helping them to achieve proper work-life balance and charting a path for true career progression.

It’s important to remember that turning the tide on the technician shortage will not happen overnight. In the meantime, we need stakeholder participation and engagement to maintain awareness of the issue and look for solutions in our day-to-day activities. To contribute to this important effort, please email the Emerson team at e360.climate@emerson.com.

Remote Monitoring Services Can Help Prevent Food Safety and Loss Issues

ronchapek_2 Ron Chapek | Director of Product Management, ProAct Enterprise Software Services

Emerson Commercial & Residential Solutions

Today’s food retail customers are more discriminating than ever, demanding fresh, high-quality foods. One of the ways to provide customers with consistent food quality is for retailers to maintain their refrigeration systems. This can avoid costly equipment failure that could compromise food quality and affect the shopping experience. Preventing food loss and protecting customers from foodborne illnesses are also critical concerns for retail store operators. Remote monitoring services can help address those issues.

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What is remote monitoring?

Remote monitoring services provide real-time performance data on critical store equipment, including insights around energy expenditure, equipment operating condition and health, facility maintenance needs, refrigerant leaks and shrink causes.

Food quality reporting through remote monitoring can automate the process of recording product and case temperatures. This reduces human error and increases efficiency while helping to improve food safety and customer satisfaction.

Monitoring Outside the Store

With remote monitoring, retailers can also control and monitor their facility systems across multiple sites and their entire enterprise, giving them the ability to better safeguard food and maintain efficiency throughout their entire chain. Effective monitoring and maintenance help enable end users to offer fresh foods. Equipment diagnostics not only help ensure that these fresh foods are safe, but also can provide insight to enhance the product presentation in order to increase sales and abide by strict regulations.

Food Safety Modernization Act

The Food Safety Modernization Act (FSMA), an important new regulation, will require stakeholders to implement and document a program ensuring safe transport of food within the U.S. This act is designed to protect consumers and assure food quality and safety from farm-to-fork. Grocers will need to work collaboratively with their food suppliers and transportation carriers to ensure that all suppliers are aware of what’s needed for food safety and compliance.

For more information on remote monitoring, FSMA and a customer case study, read the Food Safety Magazine Article here.

 

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