We spoke with Eric Williams, Principal and Founder at E2 Innovation Group, LLC., about the state of retail technology and how CPG brands and grocers can think differently about the customer experience. What will the store of the future look like in the next decade? What does a best-in-class loyalty rewards program look like? Don’t miss our conversation below.
Can you tell us about yourself and your journey through the industry?
I retired from Catalina Marketing, where I worked in a variety of roles for 20 years. My last responsibility was serving as Executive VP and Chief Technology Officer. Prior to that, I helped develop a startup company in the Direct Store Delivery (DSD) field where we automated the manual process of delivery paperwork in the retail industry.
I consider myself an early retail technology specialist. Not just in grocery, but in the hospitality industry as well, helping brands put together loyalty rewards programs.
Back when you joined Catalina, what was the problem the team was looking to solve?
Catalina got started in the early 1980s, and I joined them in the early 1990s. In the early days of the company, before the Internet, all marketing was done in one of three methodologies: print services, in which everybody could get the same newspaper or magazine, TV, or outside advertising like radio or billboards. Everybody got the same communications.
Catalina provided a marketing platform where consumers would receive coupons and other promotions from the cashier at the conclusion of their checkout process.
It morphed over the years, but when the business first got it started, it was a very simple concept: How do I reach people that have cats and sell them cat-related products, or people that have dogs and sell them dog-related food? It was the whole premise of understanding what consumers need and want based upon their purchase information. It’s something you’re familiar with and see every day now, but it didn’t exist back in the early eighties.
When you’re talking to companies about retail technology, what are some of the challenges that they’re facing?
That answer depends on the company and where they are in their life cycle.
“The number one problem that I see in most companies is that they believe that data is the key to making their company different. But it’s not just having the data, it’s what you do with it.“
Yes, data is a wonderful component, but how are you going to leverage it to make your products and services more effective, more operationally efficient?
So if you’re a CPG, how can you use the data to improve your manufacturing, or if you’re a grocery retailer, how can you use the data to run stores as efficiently as possible?
Exactly. Consider Walmart. Walmart completely changed the way they operate their business by using data to realize what sales were happening in their stores in order to enhance and streamline their store logistics. Today, they’re renowned for their ability to get the right products to their stores.
Netflix, as another example, had a lot of consumer data, and they could have gone down a variety of routes, such as selling it to advertisers. But they were smart and said we need to get into the meat of business to give our viewers what they want, so let’s go make TV shows and movies that we know will resonate with our members.
It’s similar to my understanding of Microblink’s technology. Your offering allows consumers to point the camera on their phone at grocery shelves and identify products. There’s a tremendous amount of insight brands and retailers gain from digitizing the shelf and seeing what shoppers are browsing and ultimately purchase.
There’s lots of talk about “the store of the future” and what that will look like. What’s your take?
I think the store in the future is going to incorporate more of the BOPIS (Buy Online, Pickup In Store) approach. Let me give an example.
Grocers and retailers have automated processes that get products around the warehouse and onto the trucks. That’s because most products are what we call “center store,” or dry grocery items that are easy to move. Consumers are also happy to say, “I want my 16 oz. box of bran cereal,” but they don’t care if it’s the first one off the shelf or last – as it’s not dented or expired. But while consumers might not care to spend the time picking a box of cereal, they do want to select their own fresh produce or deli items.
Europe is doing some really interesting things in this regard. In many cases, customers will place an order online, but when they go to the store to pick it up, they will show up a few minutes before their scheduled pick-up time and add their fresh items on top. They do this by shopping the store for their fresh items, stopping by a special desk, and asking the service person to add these items to their order. Now, when they pull their car around or simply pick up their bags, they have both their selected fresh items and their online order together. It’s more efficient, and shoppers love it because they’re able to handpick the products they care about.
What I think will happen in the next 5-7 years in metropolitan areas like New York City is that you’ll see a 10-story building that is mainly a warehouse with a ground floor store for customers. That ground floor will have a fresh meat counter, a produce department, fresh dairy, etc. alongside a service counter. I can imagine a model similar to the European example I described, where you’ll walk into the store having already placed your order online. That will have been fulfilled automatically on the upper floors and put in a box for pick-up. So then when consumers go to pick up their order, they’ll scan their phone, select the 3-5 specialty items that they want, and then grab their online order. The cost savings from not having to merchandise the entire grocery store (i.e., center store) would be passed back onto the consumers, so everyone wins. This is not going to happen overnight, of course, but it’s an interesting idea to consider!
We chatted earlier about CPGs, and those manufacturers are constantly ideating new products, 90% of which never make it past the first year. In the “store of the future” that I just laid out, a brand could see that someone ordered chips online and could suggest related, tailored, personalized products. Something along the lines of “We thought you might enjoy this based on your purchases” that includes physical samples for consumers to test for themselves. It’s an interesting, efficient way to get new products in front of customers, accounting for the ever-blurring physical and digital worlds in retail.
Sincere thank you to Eric Williams for sharing his time and insights! Eric is currently the Founder and Principal at E2 Innovation Group, LLC., which assists businesses technology selection & implementation, large database selection & implementation, as well as the use of consumer analytics. Connect with him on Linkedin.
