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Parsys 1
Future of Food Retail
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Estimated Channel breakdown of FCMG by global value share by 2021
Shoppers’ appetite to use technology within the grocery store. 85% Want to use technology to help with their grocery shopping in-store. 39% want to use technology to find out about offers in-store. 37% want to use technology to find products in-store.
A ceiling to the online food retail industry
Productivity - In-store, Store backroom, Supply chain; Convenience - Omni-channel, Payments, Range; Customer experience - Quality, Loyalty, Inspiration

1. Productivity

Brick and mortar food retailers can provide value beyond discounters and online-only sellers by improving productivity. Highly digitised supermarkets can operate with about 40% fewer labour hours, freeing staff to provide ‘value-adds’ such as tasting counters or cooking classes; robotics and artificial intelligence (AI) in warehouses and backrooms create more efficiency, while AI and machine learning can provide better forecasting and stock control. Improving sourcing and supply chain logistics can also reduce time-to-shelf, keep inventory fresher for longer and reduce wasted produce.

2. Convenience

Customer demand for convenience can be met through an omni-channel experience by combining in-store, local and online options, as well as providing an innovative, more efficient and quicker checkout and payment process for busy customers. Brick and mortars can also optimise their range of products, maximising the benefits of selling more of the ‘urgent’ and ‘inspection’ items and reducing the floor space dedicated to ‘stock-up’ items, such as toiletries and detergent.

3. Customer experience

Food retail stores can ensure the perception of their brand’s product quality by investing in fresh foods, especially in-store where customers like to seek inspiration, and by offering customer inspection. Keeping up with popular food and beverage trends can influence perception, as can innovative advertising campaigns. They can also attract and retain shoppers by offering high-quality, branded products under their own labels, as well as loyalty programmes to help convey brand identity, boost customer loyalty and potentially increase gross margins.

Current and future uses of technology in food retail
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Feature

Headwinds to growth: A ceiling to the online food retail industry 

While e-Commerce is expected to continue to grow within the food retail industry, Barclays Research anticipates that it will hit a market share ceiling.

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