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03/12/2021

Tech in the time of COVID

While e-commerce gets much of the attention these days, innovative in-store technologies continue to be adopted, too—many of which aim to solve pandemic-related challenges

Like everything else in the world, in-store technology trends have been influenced by COVID-19. And while much of the current tech-related grocery news we hear tends to centre around e-commerce, retailers continue to invest in tech for brick-and-mortar stores, with many of those investments directly related to needs magnified by pandemic-era shopping challenges. From shelf-level tech and payment innovations to robots and even queuing apps, Canadian Grocer chatted with the experts to get the scoop on a number of interesting and innovative in-store technologies currently grabbing attention.

Shelf-level innovators
In pandemic times, shelf cameras that automatically detect low inventory and out-of-stock items are proving more useful than ever. With grocers already under pressure to fulfill more online orders for pickup/delivery, knowing what’s in stock at all times allows them to do that more efficiently, with fewer unavailable items to frustrate customers, says Jeremy Pugh, vice-president of sales at Focal Systems, which has been working with Walmart Canada to deploy shelf cameras across its stores nationally.

“We have definitely seen COVID accelerate the adoption of these cameras in grocery,” says Pugh. “If you look at where grocery is going, not having real-time insight into product availability is akin to bowling and not knowing how many pins you’re hitting.”

Not only has the price point of shelf cameras become more attractive in the last 12 months, Pugh says advances in the technology’s accuracy are enabling a quicker return on investment. “We now have several billion product images in our training data to the point where outperforms humans walking up and down those aisles,” he says. Through the use of artificial intelligence, he says grocers can also expect these cameras to become even more adept at making valuable recommendations. “They’ll be able to make small decisions every second of the day to make the store run more effectively and drive higher profitability,” he says.

With so many innovative technologies coming into the retail realm now, grocers will need to find that “sweet spot” between enhancing customer experience, improving labour efficiency, demonstrating innovation and making sure there is a business case, says Robin Sahota, managing director, retail Canada at Accenture in Toronto. “Certainly, there is a role for shelf cameras to help ensure accuracy that what’s on the shelf is actually there, but I think we’re still early days on the technology being rolled out more broadly.”

In fact, he expects a clearer ROI coming from electronic shelf labels (ESLs), which can be used to make real-time price changes to quickly match competitors and better engage shoppers. “This allows employees to focus on higher-value tasks rather than price tag changes, which can be so labour intensive,” he says.

While European grocers have been using ESLs for a while, their adoption in the North American market has become more pronounced in the last few years. In 2019, Loblaw initiated a major ESL deployment— the chain now has electronic shelf labels in almost 350 stores; the largest of which have around 40,000 electronic shelf labels installed, with the average being closer to 20,000 ESL tags per store.

Sahota says the potential for ESLs to relay product origin and nutritional info, as well as communicate other promotions, is the sort of “next level of evolution in customer engagement that companies are starting to think about.”

To that end, U.S. grocery giant Kroger partnered with Microsoft to develop a proprietary EDGE (Enhanced Display for Grocery Environment) Shelf that uses digital displays to show prices, promotions and nutritional information. The grocer says it will also be using its EDGE Shelf to sell digital ad space to consumer packaged goods brands based on things like customer demographics.

How do you want to pay?
Conventional cash may go the way of the dinosaur even sooner than expected as innovations in payment technologies continue to roll out. Electronic payments represent 77% of total payment volume, according to the Canadian Payments: Methods and Trends 2020 report (released in November 2020 but based on 2019 data) from Payments Canada, which owns and operates Canada’s payment infrastructure.

Payments Canada reports that in the early months of the pandemic, 40% of Canadians avoided retailers that did not accept contactless payments, a trend expected to continue as concerns around virus transmission through surfaces persist. Senior director Andrew Holyome says Canadians continue to adopt new ways to pay, with 34% of those who own wearables (such as smart watches) saying they’ve used them to make a purchase. “We are really moving towards digital payments, and grocers have to stay on top of these trends and understand where their customers are going,” he says.

When it comes to digital payment innovations on the horizon, analysts point to initiatives for grocery that go far beyond self-checkout units. Facial payment technologies currently used in China allow shoppers to make a purchase simply by posing in front of point-of-sale machines equipped with cameras. Last October, Amazon announced a new palm-recognition system at its Amazon Go stores in Seattle, where shoppers scan their hands at the entrance to get items they choose automatically charged to their credit cards. Several vendors are also developing touchless checkout systems that use computer vision to recognize objects the same way our eyes do. (Amazon is already using computer vision in its smart shopping carts.)

Voice technology is another area gaining traction in autonomous checkout in an effort to reduce physical contact. French grocery chain Carrefour has partnered with Google Assistant to bring voice-enabled grocery shopping and checkout to its shoppers, while Walmart is exploring a similar scenario with Apple’s Siri.

Doug Baker, vice-president of technology at the Food Industry Association (FMI), says some form of autonomous checkout will eventually be where the majority of the industry lands. But there are still issues to iron out, particularly when it comes to dealing with random weight items and produce. “Scalability is also a challenge and that’s why we’re not seeing more of these options in conventional stores,” he says.

While he says COVID “has absolutely accelerated” innovation in digital payment options, he expects there will always be a hybrid of payment models in the future. “If we didn’t feel comfortable with technology before, we will now; but once we get to the other side of this , I still think the grocery store will be a destination where you also come to talk to people,” he says.

To robot, or not to robot?
There’s been plenty of buzz in recent years about robots in retail, with these machines being “employed” in jobs ranging from inventory to cleaning to even making salads. But the news in November 2020 that Walmart would be abandoning its inventory robots program (in place since 2017, in about 500 stores, with robots roaming the store scanning shelves to keep track of inventory) may have left some industry watchers wondering: is this a sign of a fizzling future for robots in grocery retail?

“When you look at that Walmart example of getting rid of the shelf audit robots, a lot of people jumped up and down and said, ‘Oh, that’s the death of shelf audit robots.’ And I would say, ‘It might be the death of shelf audit robots at Walmart, but it’s certainly not the death of shelf audit robots in ,” says Steven Keith Platt, research director at the Retail Analytics Council and lecturer at Northwestern University. It’s not even the death of robots at Walmart, as the retailer still uses other types. “They continue to roll out their autonomous floor scrubbers,” for example, he says.

“Other iterations coming down the pike are security robots,” Platt adds. “Some retailers are not going to be very comfortable with that, but others are.” And in an effort to step up disinfecting processes, grocery firm Ahold Delhaize USA announced in January it was launching a pilot of ultraviolet disinfecting robots in partnership with Ava Robotics. “That’s the first pilot we’re aware of,” says Platt, “however, we’ve been discussing this with robotics firms since March, and there are a couple of others that are going to be coming out.”

Still, the high implementation costs and even legal/insurance issues can make it difficult for many grocers to justify bringing in robots. “The insurance companies are not very comfortable having robots and people at the same time, for obvious reasons; if there’s a malfunctioning or something happens it’s a huge insurance liability,” says Amar Singh, principal analyst at Kantar Consulting. “So this is something that still needs to be figured out.”

Anita McOuat, national technology, media, telecommunications & consumer markets leader at PwC Canada, agrees cost is a major consideration, with some robot applications being a more practical investment than others. She describes “smart cart” innovations that fall into the robot category, such as LG’s self-driving cart that follows you around the store: “You don’t have to touch it. You put your stuff in, the cart is calculating what you put in there, and as you’re exiting the store, you don’t have to interact with anybody and payment is just being charged to your card,” she says.

Then there are the robots that “reduce high-touch activities like salad bars or ramen noodle bars where you would add the toppings yourself ... so the idea of a robotic vending machine; we saw a lot of those rollouts in the United States in 2020 on a pilot basis,” she says. “They’re expensive, and they’re very specific and not that versatile. So, the question for a retailer is, is this driving enough incremental sales or improving my customer experience enough that it’s worth scaling out these expensive machines? Or is it just a novelty item?” In comparing these two, she says, “I think the smart carts are very expensive, but you can see how that could actually change a customer’s experience as they navigate the store, both from a convenience perspective and health and safety perspective; versus a salad-making vending machine, which maybe isn’t quite as versatile.”

A better queuing experience
Long, socially-distanced lineups just to enter the store are undoubtedly a new experience in the COVID era, and the tech industry has stepped up to help with challenges related to limiting customer capacity. To manage customer volume and enforce social distancing, Ipsos Channel Performance, for instance, recently updated its customer counting tool to show the live count of visitors in the store at any given time. In the United Kingdom, grocers Sainsbury’s and Asda recently rolled out virtual queuing apps, which virtually notify customers when they’re at the “front of the line” without them having to wait in an actual line (they could be in their cars, for instance). Similarly, “Walmart is offering on its app where you book time when you’re going to go to the store and it buzzes you when your turn comes up, so you can just get out of your car and go straight into the store,” says Kantar’s Singh.

“Queuing technology has actually been around for years,” says PwC’s McOuat. “It’s not a new technology, it’s just that queuing wasn’t a big issue when it came to grocery before.” Marty Weintraub, national retail leader at Deloitte Canada, adds that our cold Canadian winters might make things like queuing apps even more attractive. “We’re in winter now. There is talk about what happens if people are having to queue outside in -10 C, -15 C? What do we do?” he says.

Still, Weintraub isn’t sure queuing tech will be widely adopted, “because I think the next few months will be critical on two fronts. One is, when does wave two start to come down? And when do we have confidence that the vaccines that are starting to roll out now will actually roll out and actually have that efficacy that we’re hearing about?” If the end of store capacity restrictions and lineups are in sight, it may not seem worth the investment.

He points to how temperature-checking technology and thermal cameras to detect fevers were a hot idea early in the pandemic, but never really took off as the months wore on. Due to expense and impracticalities (not everyone with COVID has a fever), “those ideas came and went in the early days.”

Overall, Weintraub believes grocers would be wise to invest in technologies that were attractive prior to the pandemic but have now become more crucial, such as “reducing friction at the checkout, whether that’s scan-and-go, or touchless, or robots;” or shelf-level tech— “on-shelf availability was important before, and guess what? It’s even more important now,” he notes. That said, one new concern brought about by the pandemic that he does see sticking around is hygiene—so sanitizing robots, cart cleaning tech and the like. “Even if vaccines roll out, and even if efficacy is high, people will still be what I call ‘a little bit OCD’ on cleanliness for some time after the pandemic goes away.”

This article appeared in Canadian Grocer‘s February 2021 issue.