Personalized “Wellness Effect” & Grocery Retail Future
It’s no secret to grocery retailers of today that physical store environments need adaptations to keep up with emerging technologies and shoppers whose lives have been influenced by them. In recent years, a gradual evolution of grocery retailing has been taking place, particularly as data collection has a larger effect on the concept of customer-centricity.
On the other hand, specialty (e.g. pharmacy) and fresh departments are growing in size and in prominence. The new normal for grocery shoppers include a basket full of natural and organic foods. These are just the first signals of an unstoppable health and wellness trend tightly integrated into grocery stores.
If you converge those two concepts, you’ll land somewhere near my current thoughts surrounding the future of grocery retail…
Grocery stores of the future will be fervently influenced by the wellness industry, constructed around systemized fulfillment of hyperpersonal needs.
Grocers & Wellness: Current State
Wellness could mean limiting sugar for one customer and less sodium for another. That’s why grocery retailers have traditionally marketed health and wellness broadly.
Grocers & Wellness: Future Outlook
Health and wellness is deeply personal and needs are different from one shopper to the next. This might seem “Jetsons-like” to some, but the grocery store of the future should guide health and wellness customized recommendations based on:
- purchase histories
- detailed user profiles
- real-time current health information
- integration with dietitians and pharmacies
Version 1.0 — Walled Garden
The near-term future of grocery retailing and personalized wellness will most certainly resemble a walled garden. These enhancements to the current shopping experience will be costly, but major grocers will embark on the journey if they believe it will substantially increase customer switching costs. In a recent LinkedIn post, I contemplated which major grocer should position itself for this significant future business growth opportunity by linking current strategic initiatives, wellness assets, and personalization levers (in this case loyalty programs).
Version 2.0 — Decentralization
Imagine all consumers have a private data cloud that follows them around. That private data cloud contains a consumer’s digital identity, detailed user profile with preferences, and needs based on your real-time current health information. These would be something a consumer owns (held through a digital wallet) and not hosted through a grocer’s loyalty program.
That means a consumer would have the power to grant any grocery retailer access to parts of that private data cloud to provide a personalized wellness shopping experience (even during the first visit). As an example, a diabetic vegan consumer sharing such access should be served contextually relevant information such as recipes or offers in real time. It should understand the role sustainability plays into that particular consumer’s purchase decisions and marketing over another diabetic vegan consumer. Grocery retailers are only beginning to conceptualize the shifting focus and intersection of purchasing products based on lifestyles and based on health states.
Final Thoughts
Integrating this concept with another recent article topic (full traceability) would allow for an even more personalized experience for shoppers. Continuing the above example of a diabetic vegan consumer, blockchain-enabled supply chains would provide information about a product’s origin, route it took to the shelf, and full nutritional profile. When loading products in the digital or physical smart cart, it should alert that diabetic vegan consumer of misaligned purchases.
This type of grocery retail future will require massive investments, but I believe increased competition will drive grocers towards anything that could be seen as creating higher customer switching costs. In doing so, it will create a Catch-22 situation for grocers. It will push consumer behavior forward to personalization, thus locking in larger revenue creation for the winners, but it will also invite decentralized solutions (web3) that gives the power back to consumers.
