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Posts tagged ‘Ed McKiernan’

How Retailers Are Shrinking the Grocery Footprint

Ed_McKiernan Ed McKiernan | President, Cold Chain, Electronics & Solutions

Emerson Commercial & Residential Solutions

Emerson was recently featured in a Winsight Grocery Business article about shrinking grocery footprints, energy usage, the click-and-collect model and more. New technology is helping grocers adapt to a rapidly changing market and shifting consumer preferences. To read the full article, click here.

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Grocers worldwide are making energy conservation a top priority; they’re always looking for ways to reduce the amount of energy and waste they create. Prioritizing energy conservation benefits the environment as well as the bottom line, potentially saving thousands of dollars annually on energy costs and equipment. What’s more, the operational costs saved on energy present opportunities to invest in solutions and technologies that could also improve the customer experience.

Revamping refrigeration systems is a good starting point for grocers seeking to incorporate more environmentally friendly and cost-efficient practices into their operations. Refrigeration costs account for roughly 60 percent of energy bills. While refrigeration system upgrades can come with significant installation costs, this new equipment can help deliver energy reductions from 30–50 percent.

As the click-and-collect model continues to rise in popularity, refrigeration upgrades have become even more crucial. The term click-and-collect refers to the process of ordering items online and then picking them up at the nearest store after a grocery associate has hand-picked your items. But this added convenience for consumers presents new refrigeration challenges for grocers, mainly due to repeated door openings from workers going in and out of the cold storage room or refrigerated locker. The more often the door needs to be opened, the more difficult it gets to maintain precise setpoints and manage humidity concerns.

Emerson has a wide range of solutions to help address these concerns. By combining high-efficiency scroll compressors, distributed controls and alternate refrigerants in display cases, operators can potentially achieve a lower cost of operation in their store refrigeration. Then, efficient condensing units with supervisory controls can be used to optimize click-and-collect refrigeration requirements, helping operators achieve temperature reliability and further reduce energy consumption in these critical systems.

Today, one out of every three grocers offers some form of click-and-collect, and 20 percent of Americans purchase groceries online — with that number expected to grow to 70 percent by 2025. When you consider this within the context of today’s dynamic regulatory climate and corporate sustainability initiatives, it’s easy to understand why many grocers are looking to upgrade their refrigeration strategies.

Emerson has a wide range of components, advanced controls and industry expertise to help grocers meet these demanding refrigeration challenges while reducing their energy usage and carbon footprints. We believe that a robust refrigeration strategy can help you reshape your business and save you money, and we’re ready to show you how.

 

 

Retail and Foodservice 2025: Omni-Channel Proficiency

Ed_McKiernan Ed McKiernan | President, Emerson Retail Solutions

Emerson Commercial & Residential Solutions

Welcome back for the final installment of our series highlighting the top five trends driving change within the grocery retail and chained foodservice markets in the coming years. The final trend we are taking a closer look at is Omni-Channel Proficiency.

Emerson and global research firm Euromonitor International worked together to identify the megatrends impacting retail and restaurant operations and facilities management over the next eight years.

If you haven’t already, you may want to first read our previous posts where we focused on the first four trends: Digital Shoppers, Focus on Convenience,  New Retail Formats, and Experiential Retail.

So what do we mean by Omni-Channel Proficiency? The common misconception is that “omni-channel” refers solely to online consumer engagement and shopping. It is more than that. It has to do with looking at all the different ways retailers need to be available for consumer engagement. A growing number of consumers are no longer coming to the retailer. To capture sales, retailers need to meet consumers halfway and go where they are; they need to be omnipresent.

The omni-channel concept pulls together many of the topics previously discussed within the other trends, including digital devices, customer experience, convenience, and Millennials. Omni-channel consumers have more frequent shopping experiences and spend more money than traditional shoppers. According to recent research, there has been a 23 percent increase in shopping trips among U.S. omni-channel shoppers and a 13 percent increase in spend among the group.

Omni-Channel Proficiency means facilitating sales anytime, anywhere in a seamless way for consumers. These consumers are “always shopping.” They are checking prices or browsing on their smartwatches or phones at all hours of the day and night. They want consistent experiences online and in brick-and-mortar locations.

One way retailers are trying to create this consistent experience is through customer loyalty programs. Unfortunately, many programs are falling short of consumer expectations. The most common mistake that retailers make with their loyalty program is that they treat it as a completely different entity within their brand. For instance, only allowing use of loyalty card online or in brick-and-mortar sites, or putting restrictions on use through the brand’s mobile app.

From a consumer perspective, that can be really frustrating. They want one seamless experience, regardless where or when they are interacting with the brand. And surprising to some, they do not necessarily want everything to be only digital or online. This is supported by the fact that we are seeing traditional online players incorporating brick-and-mortar into their brand experience. For instance, Amazon recently opened a bookstore location and will soon be introducing its curbside drive-up grocery store.

So, what can retail and foodservice organizations do in terms of facility management and operations to help support Omni-Channel Proficiency?

  • Facilities – Ensure seamless interaction between technology, operations, and store design to increase customer engagement and eliminate inefficiencies and lower costs.
  • Supply Chain – Increase focus on tracking inventory and warehouse strategy to expand reach at low costs and fulfill multiple channels from one site.
  • e-Commerce – Implement an infrastructure that supports online interaction and personalized, real-time engagement to slow industry commoditization and build equity against competitors.
  • Human Resources – Offer consistent customer service that allows troubleshooting and product returns from anywhere to increase customer satisfaction and build brand loyalty.
  • Customer Experience – Create consistent experience across formats that enables the ability to shop anywhere, anytime to increase brand loyalty and sales.

As the trends covered in this series illustrate, the grocery retail and chained foodservice environments are quickly evolving. It’s important that operators understand the impact these changes will have on their operations and plan accordingly to ensure strong sales and customer loyalty.

Retail and Foodservice 2025: Experiential Retail

Ed_McKiernan Ed McKiernan | President, Emerson Retail Solutions

Emerson Commercial & Residential Solutions

For this, our fourth installment of our series on the top five trends impacting grocery retail and chained foodservice markets, we take a closer look at the Experiential Retail trend.

In an effort to identify the megatrends strongly shaping retail and restaurant operations and facilities management over the next eight years, Emerson worked with global research firm Euromonitor International. Be sure to check out our previous posts where we focused on the first three trends: Digital Shoppers, Focus on Convenience, and New Retail Formats.

The growing options for how and where consumers can shop is forcing retailers to differentiate in an effort to increase or maintain foot traffic. This is driving an effort by brick-and-mortar stores to create an experience consumers can’t get online. We as an industry are seeing that experiences are important and will stand out with consumers. According to a 2014 study, 78 percent of U.S. millennials would rather spend money on a desirable experience than on goods.

So, regardless of whether you are managing a large format food retail operation, convenience store or restaurant the question you need to ask yourself is “How can I bring a relevant experience to my customers, regardless of my retail format?”

There are three prominent sub-trends we are seeing within Experiential Retail that can provide better clarity and understanding of the concept. The first is “retail-tainment,” which is the idea of utilizing technology and tools onsite to provide a level of entertainment. These technologies and tools are sometimes “gimmicky” and serve no other purpose than to provide an experience and facilitate interaction. One example is Target’s Wonderland, a holiday pop up store in Texas. The space featured 10 “spectacles,” including a jumbo Etch-a-Sketch, and it provided a retail-tainment experience aimed at families.

The second sub-trend is having experts on-site to leverage and offer a greater experience for consumers. For instance, having a nutritionist or dietician available to offer healthy eating tips or a wine expert to answer questions and suggest new wines. The third is the usage of virtual and augmented reality in brick-and-mortar locations. This can offer a cool and different experience to draw in consumers, as well as offer some immediate gains. For instance, augmented reality could be used to help consumers navigate the store and easily find the products they need.

One retailer that is already capitalizing on the Experiential Retail trend is an Italian foodservice chain that bills itself as “the largest Italian marketplace in the world”. It provides a unique experience by bringing Italy to the consumer. Consumers can shop, taste food and drinks and learn about Italian culture, through onsite wine bars, restaurants, and marketplaces.

So, what can retail and foodservice organizations do in terms of facility management and operations to help create a unique or memorable customer experience?

  • Facilities – Repurpose physical assets, such as branding tools and one specific store location, or to build equity against competitors.
  • Supply Chain – Repurpose possible non-experiential sites as fulfillment centers to provide faster delivery and better defend market share.
  • e-Commerce – Create personalized shopper marketing and ensure a positive digital experience to attract and retain more loyal customers.
  • Human Resources – Implement a consumer-centric mission that shifts employee mindset to enhance experiences that will improve equity against competitors and drive foot traffic.
  • Customer Experience – Create new experiential atmosphere and bring in low or “no cost” value adds that will engage shoppers and draw in-store traffic and create upsell opportunities.

Be sure to join us for our final post in this series, which will take a look at the fifth megatrend impacting retail and restaurant operations and facilities management: Omni-Channel Proficiency.

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.

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.

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