Technology of the Week Group 2 – New Ways of Grocery Shopping
For our class about Information Strategy we were asked to write a report about two innovative technologies and their strengths and weaknesses. We chose to discuss the online grocery shopping experiences at Albert Heijn and Tesco´s subsidiary Home Plus. Industries are changing heavily due to shifts caused by the Internet and so is the grocery shopping industry.
There are a few top trends that are changing the grocery shopping landscape. First of all, consumers are shopping for food and beverages across multiple channels, including newly launched e-commerce stores. Additionally, shoppers want more product curation. Consumers do not longer need a choice of 30,000 products when they only need 30 of them (Business Insider, 2014). Furthermore, according to The Week (2014), mobile purchasing will go mainstream and your phone will become your wallet. Couponing will go high-tech and big data will give access to more dynamic pricing.
The grocery shopping industry is trying to take advantage of the trends by extending their brick-and-mortar stores to an online experience. In this report you will read about the online grocery shop that Albert Heijn launched in the Netherlands and the QR code-enabled shopping at metro stations created by Tesco in South Korea.
Since 1997 Albert Heijn started with a formula for online-grocery shopping. This was a first step in moving from just brick-and-mortar stores to an online shopping environment. It was a radical change in the Dutch supermarket industry. This radicalism also stems from the fact that 1997 was the year that Albert Heijn launched their website in the first place. Right now there are about 22.000 products offered in the online store. Customers can choose whether they want their groceries to be delivered at their homes or to pick them up in specially assigned Pick Up Points (Albert Heijn, 2014). Currently, AH is operating twenty-five Pick Up Points throughout the Netherlands, although they are mainly concentrated in the Dutch conurbation.
The use of QR codes that is discussed for the Technology of the Week-report is the use of QR codes to create virtual supermarkets. Home Plus, a Korean subsidiary of Tesco, has found an innovative way to adapt itself to the needs of their customers. According to Tesco, Koreans are one of the hardest working people in the world (Bergen, 2011). As time for leisure is rare and a considerable amount of people spend many hours per week commuting, Home Plus has thought of an innovative way to make the time spent commuting more useful. This is how it works (Jordan, 2011):
- Billboards on the platforms of the underground imitate the aisles of a supermarket. Each product has a QR code on the price tag.
- While waiting for the metro, people can use the QR code app on their handheld device to scan the QR codes of the products they need.
- After the virtual check-out, the scanned products are sent to the buyer’s home on the same day.
The following table summarizes strengths and weaknesses identified of both technologies:
The conclusion is that both technologies look promising looking at the future. If Albert Heijn can reduce the delivery prices and increase their geographical coverage it could expand their market share greatly. However, Albert Heijn should consider its upcoming competitors and regulatory issues concerning privacy as well. Perhaps it is a possibility for Albert Heijn to introduce the QR code-enabled shopping as used by Tesco in the Netherlands to keep innovating.
- Business Insider, 2014. 4 ways American grocery shopping is changing forever. Retrieved from: http://www.businessinsider.com/trends-that-are-changing-grocery-stores-2014-4
- The Week, 2014. 10 trends changing how you´ll shop in 2014. Retrieved from:
- Albert Heijn, 2014. Feiten en cijfers. Retrieved from: http://www.ah.nl/albertheijn/feiten
- Bergen, J. 2011. Korea’s Tesco reinvents grocery shopping with QR-code “stores”. Retrieved from: http://www.geek.com/mobile/koreas-tesco-reinvents-grocery-shopping-with-qr-code-stores-1396025/
- Jordan, M. 2011. Virtual underground shopping. Retrieved from: http://www.brandexperience.info/virtual-underground-qr-grocery-shopping/