Image courtesy of Hy-Vee
Hy-Vee, a prominent supermarket chain with a peak revenue of $12B in 2022, has seen continual success in its innovation strategy by implementing new digital technologies and taking chances to find out what works best for its customers and stores.
As a chain with a history of diverse and continually expanding services–including food court areas and even in-store pubs–experimentation has served Hy-Vee well in finding the goldilocks combinations of tech innovations that meet their needs.
Like the rest of the industry, it is all part of an effort to digitize store operations as a whole in order to both compete with a growing eCommerce sector and keep up with rapidly evolving and demanding consumer expectations.
Strategically, some stores have focused on creating frictionless experiences for their customers, making the customer journey more transparent, seamless, and personalized, or ‘digital-first.’
This also extends to the technologies designed to make employees lives easier while freeing up time and resources that go towards better customer engagement, a pain point for customers that has grown since 2019.
Indeed, notes Tina Potthoff—Senior Vice President, Communications at Hy-Vee—in a sit-down with RETHINK Retail, “When you look at some of the digital aspects that we’ve added into [our] stores, they’re meant to save our employee’s time so that they can then be forward facing with the customer…versus stocking or changing prices on a shelf or taking orders.”
She continues to provide the example of digital shelf tags, “something…that saves a ton of time from a manpower perspective. It also allows us to be able to put those customers that are shopping in our stores in direct contact with our employees, so they can continue to have conversations.”
In other words, Hy-Vee’s digital strategy sets a compelling example for retailers. Rather than aiming to replace employees, the grocer focuses on utilizing technology to empower and enable them to take on more customer-facing roles that require genuine human interactions.
It’s an evolution both in terms of in-store tech, and of how the store associate is conceived and, ultimately, trained.
In that vein, few roles have historically dominated associates time and attention more than the checkout lane, an often largely ‘mechanical’ role that keeps associates from interacting with customers out on the store floor while they are still making the majority of their purchasing decisions (in a study of 3,000 shoppers, it was found that 82% of purchasing decisions are made in-store, at shelf).
It returns to the concept of a ‘digital-first,’ store: “With the digital-first mentality…you will see that there are more screens in the stores. You’ll see that there’s more self-service in the stores, more customization in the stores, and also more departments,” continues Tina.
These efforts directly respond to recent data on consumer preferences: according to the February 2023 Global Consumer Insights Pulse Survey by PWC, consumers seek physical digital and in-store experiences, with 42% indicating that they prioritize in-store kiosks, while 50%–the top category–prioritized knowledgeable sales associates, associates who are in turn supported by said digital innovations.
However, for stores looking to digitize or advance their existing digital implementations, knowing how to proceed can be daunting.
Yet, with the industry’s growing digitization has come a growing roster of proficient third-party providers, such as Diebold Nixdorf’s self-checkout technologies, kiosks, and consultancy services.
“We also have, of course, the self-checkout and different self-checkout stations across our store. That’s another experience too, where it puts the onus on the customer…So it really comes down to providing people options when they walk in the store, when they’re able to shop,” notes Tina.
In-store ordering kiosks can be useful touchpoints for customers in places other than checkout as well, such as at the bakery counter to customize cake orders in a way that is less prone to error and more clearly delineated for the bakers.
Some strategies may work better or worse than others; Tina emphasizes that the willingness to try things out is at the core of an innovator and that this informs the ‘Innovator of the Year’ awards Hy-Vee so often receives: “We do try a lot of new innovation to see what’s going to work for the consumer.”