Now that vacations are over and the kids are all safely back in school, solutions companies are fully into “Conference Season Part 2 “. And thus it was that I had the opportunity to speak last week at Symphony Retail‘s Xcelerate Forum in Las Vegas. The focus of my talk was about the things grocers can do to “become indispensable ” in the face of new pressure from eCommerce giant Amazon following its successful acquisition of upscale U.S. grocer Whole Foods. I was mulling over the nature of the threat to grocers that Amazon/Whole Foods poses in a Retail Paradox Weekly piece just a couple of weeks ago, but the net of it is that fast moving consumer goods ( “FMCG “) retailers are now finally faced with the same disruption that general merchants, fashion, hardgoods, specialty, and (of course!) music and video distribution and book sellers have been struggling with for years.

Simply put, a new player has figured out how to boil down the value proposition to consumers into two basic ingredients: extremely competitive low prices and really fast direct-to-consumer deliveries – and traditional merchants have to respond. There is a way! Taking a lesson from history (in particular, when Walmart revolutionized supply chain mastery to deliver highly optimized assortments at remarkably low prices in the mid-1980’s), retailers that want to successfully compete against the new 800-pound gorilla need to… excel at something the gorilla can’t do.

Almost as if on cue, the news came out last week that American supermarket giant Kroger is planning to open a new restaurant concept, Kitchen 1883, this fall at the grocer’s newest marketplace store in Union, KY. With the new concept, Kroger joins a host of other traditional grocers, including Coborn’s supermarkets (Pizza Ovens), Lucky’s Markets (The Kitchen), Wegmans (UpMarket Café), Hy-vee (Grille), and H-E-B, among others. In April 2017, USA Today reported on the trend, noting that in-store restaurants (or “grocerants “) generated 2.4 billion visits and $10 billion in sales in 2016 by promoting restaurant-quality freshly prepared foods, and the trend is upward.

The Kroger strategy is certainly timely. Recent consumer data^[1] shows that consumers are increasingly experimenting with new ways to buy and consume food. Consumers’ upsurge in interest in home-delivered groceries and meals, meal kits, and food trucks speaks to their desire to spend less time shopping for food and more time enjoying it. And their interest in farmer’s markets, locally produced foods, and specialty markets speaks to their desire for fresh, healthy food. Taken together, these consumer trends set up a golden opportunity for grocers – to become a destination not just for food, but for a good meal.

Symphony Retail’s Xcelerate Conference

That brings me to the Xcelerate conference last week. The conference was intended for customers of the Symphony Retail suite, an amalgam of the Symphony EYC solution, Symphony GOLD, and now the Symphony Retail Cloud offering. The tracks were essentially divided into two themes, one for the supplier perspective and the other for the retailer perspective. Since the majority of Symphony’s customers deal with fast moving consumer goods, that’s a perfect combination. Grocers in particular have very close working relationships with their category partners, and they’re both dedicated to the smooth flow of consumables from the point of manufacture right to the dinner tables of consumers. But even the most vocal advocate of that model now knows that the days of “stack ‘em high and watch ‘em fly! ” are over. Today’s consumers demand much more relevance, and don’t want to be bothered by anything else.

The event’s master of ceremonies Patrick Fitzmaurice (Managing Director of the Path To Purchase Institute in Atlanta) kicked things off with the declaration: “It’s time to fight back against Amazon! “, and that was indeed the underlying theme of the whole event. Dr. Pallab Chatterjee, Chairman of Symphony Retail Solutions & CEO of Symphony EYC, and John Lucot, the former COO at Giant Eagle, underlined the importance of that theme with some consumer facts:

• 66% feel “time starved “
• 81% have smartphones
• 83% do not know what’s for dinner at noon that day
• 49% decide what to have for dinner less than one hour before the meal
• 76% are buying prepared food instead of cooking

If there was ever a more clear set of indicators that grocery needs to change with the times, I haven’t seen it. The speakers made a series of tactical recommendations, such as removing the center aisles to make room for a prepared foods section (Mr. Lucot shared a “Store 2020 ” floorplan that was barely recognizable as a grocery store, having much more in common with a marketplace concept). They suggested new ideas like online-subscription based consumption, special products sections for locally available and popular items, and even recreating a “farmer’s market ” in each store (as a competitive response to U.S. newcomer Lidl).

These concepts are important tactics for grocers to employ to become more indispensable to consumers. Let’s face it, consumer behavioral shifts are impacting the grocery industry in a big way. More of us are either live in or near urban centers, and want less inconvenience since we have less time, and (maybe) less money. Consumers have a desire for healthier lifestyles, and that means fresh, healthy, responsibly produced, organic, delicious food. And of course in this fast paced world, consumers want it now!

As I mentioned above, several prominent grocers in the U.S. are moving in that direction already, and the rest need to get on board. But just punching back at Amazon with these tactics isn’t going to be enough. There are cultural things to be learned from the Seattle eCommerce giant (and newly minted grocer) too.

Those cultural attributes were highlighted by John Rossman, the former Director of Enterprise Services at Amazon and author of the book, The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company. Rossman itemized what he called Amazon’s “agility playbook “. Here it is:

• Have a customer obsession
• Re-invent the customer experience
• Technology process enablement is essential
• Keep it simple
• Measure everything
• Be accountable
• “The best service is no service “
• Be relentless – shoot for perfection
• And remember, there is no “no “

Final Thoughts

As I listened to the various practitioners at the Xcelerate event talk about how to improve category management techniques to tailor assortments to consumers’ changing tastes, how to use such things as augmented reality for collaboration, and how to use new analytical insight engines to understand sales, profitability, and customer satisfaction, it struck me that the essential thing for retailers in general and grocers in particular to understand is that consumers are experimenting to find better solutions to their lifestyle needs.

So the question simply is, are retailers experimenting too?

“Acquiring products ” has been commoditized – that decision is now almost exclusively won by lowest cost and/or fastest delivery. The best way to win is to change the game: solve consumers’ problems in ways that become so ingrained in their lives that the barriers to compete are very high. It’s time to accelerate!