Helping Specialty Stores Battle Grocery Goliath

In today’s tech-driven world, attracting modern consumers can mean offering the latest technology.

According to recent industry research, consumers, particularly millennials that are accustomed to shopping on digital channels, expect merchants like supermarkets to offer technology that gives them more control over their shopping experiences.

Tapping into consumers’ desires for new technology, online giants like Amazon are looking to disrupt the space and take business away from traditional grocers with its unstaffed grocery stores — which are designed to let customers skip checkout lines and securely process transactions through an encrypted mobile wallet using sensors and other technology. And Kroger, the largest grocery store chain in the country, bringing in more than $100 billion each year, has embraced similar sensor technology to stay ahead of the technological curve.

But for small grocery stores and specialty food and beverage chains, keeping up with those heavy-pocketed Goliaths can be difficult. Even other well-known national chains like Whole Foods bring in less than a quarter of Kroger’s revenue. For smaller businesses, it can be tough to keep pace with the resources and tech offered by large chains.

But there are solutions that can help these smaller businesses stay on the cutting edge and compete with the big players in the grocery game. In a recent interview, Burt Aycock, director of design for ECR Software, a company that develops solutions for smaller grocery and specialty food and beverage merchants, told PYMNTS that these smaller businesses can use technology to offer secure and personalized solutions that give consumers a taste of the control and convenience offered by larger chains.

Personalizing for Control and Convenience

According to a recent report, nearly 50 percent of grocery store shoppers both in the U.S. and around the world make decisions about where to shop based on convenience. And some of the biggest players in the shopping world are starting to use self-service technology to make trips to the store faster, more convenient and safer than ever.

While smaller stores may not be able to compete with the resources of Amazon and Kroger, specialty and local merchants can offer customers a more personalized experience that gets them in and out of a store relatively quickly. But it doesn’t have to be all or nothing — small grocers and specialty stores can still offer some of the technological advancements that have become (and are becoming) highly valued by shoppers.

Aycock said that smaller chains and stores can invest in technology like self-checkout terminals to satisfy consumers looking for more convenient experiences. He also said that online sales systems can give smaller chains a big boost when it comes to competing with larger national names.

Aycock’s team at ECR recently released an online shopping module designed to allow smaller stores the ability to accept online orders that can be picked up in-store by consumers, similar to services being offered by large national chains.

“That’s really just another POS lane when it comes down to it,” Aycock said of online sales capabilities, noting that much of the same software and code that powers in-store sales can be used for online channels. “It’s really just about bringing that same sales technology from in-store to the cloud and putting a user-friendly interface on it so that consumers can make their purchases online in a simple fashion.”

Securing More Consumer Control

While consumers may want more convenience and control over their visits to grocery and specialty food stores, they don’t want speed to come at the price of security. Aycock said that consumers want the same control over their own personal data that they have over their shopping transactions.

“People have a lot of fear and uncertainty about security, so we always look to develop solutions that are obviously stringent and tough, but also easy for retailers and consumers to understand and follow through on,” he explained.

But that doesn’t mean security should remove simplicity from transactions, either. It’s a hard balance to strike, Aycock said, but consumers expect digital convenience and safety to go hand-in-hand.

In order to offer safe transactions without wasting customers’ time, Aycock said that merchants should look for solutions that combine speed with security. That includes biometric and tokenization features that can be embedded directly into a store’s payments system, such as the One Touch solution, a biometric fingerprint scanner that tokenizes data while cashiers ring up items.

The technology can be custom-designed to fit within a merchant’s existing payments system and can adapt to only offer the features that merchants can integrate without changing their POS technology. The system, Aycock explained, also gives a new, simpler way for cashiers to tally up cash and perform other auditing and reporting processes without having to shut down a cash register, which can suddenly land consumers in long lines.

Aycock said that a solution that combines security and speed should allow smaller grocery or specialty stores to compete with larger chains that can devote greater resources toward solving these kinds of problems.

“By combining biometrics and tokenization, it can be used solely for customer association for smaller retailers who want to ease in to new technology and [get] used to tokeniz[ing] debit and credit cards so that payments can be fast and secure,” Aycock said.

As technology continues to take forward leaps, merchants both large and small will need to invest in new developments that redefine their shopping experiences if they hope to remain competitive. And if smaller and specialty sellers want to find success, it may just be about finding the technological sweet spot of security and convenience.

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About the Tracker

The PYMNTS.com Developer Tracker, powered by Vantiv, provides the payments ecosystem with a view into how software developers are using new technologies to create innovative business opportunities and enable merchants to optimize the ways in which they engage with shoppers today. The developer community within the tracker is separated into three categories: Shopping and Payments, Operations and Marketing.