Adapting to the Internet of Things (IoT) in Retailing

In an era where customization and personalization are the oper­ative words in retailing, the challenge to build closer connec­tions with shoppers has never been greater. Ubiquitous Internet connectivity is driving radical transformation of a retail world whose epicenter of consumer intelligence, long entrenched in the front end and back office, has given rise to a new ecosystem of data derived from interconnected devices, many of which enable consumers to shop for just about anything without ever entering a store.

Not only is it now possible for people to shop for groceries without leaving their kitchens; but their refrigerators have the ability to make up the shopping lists. “We live in a hypercon­nected world, where every device, from the phone to the fridge, is becoming connected to the Internet,” says Betty DeVita, of MasterCard Labs, a partner with Samsung in developing its Family Hub refrigerator. This “smart fridge” is equipped with the Groceries by MasterCard app, which “shows a major enhancement to the Smart Home environment by bringing consumers a simple and convenient way to shop for groceries directly from their kitchen.”

The Family Hub may be a game-changer for traditional grocery retailers, such as Wakefern Foods, which has been at the forefront with its popular online delivery and click-and-collect services. The supermarket cooperative—whose members oper­ate 250 ShopRite supermarkets in New Jersey, New York, Penn­sylvania, Connecticut, Delaware, and Maryland—has teamed up with MasterCard to integrate its online grocery shopping service, ShopRite from Home, with Groceries by MasterCard, which is preloaded in new Samsung Family Hub refrigerators and allows consumers to order directly from the fridge using a built-in screen.

ShopRite customers can use the appliance’s integrated tablet to order groceries from their own kitchens by schedul­ing in-store pickups or at-home delivery with a few taps on the Family Hub refrigerator. Using the Groceries app’s secure, easy-to-navigate interface, customers also have the ability to add products to a ShopRite shopping basket and pay online. Items are added to a cart and paid for in a simple, single check­out experience that accepts any U.S.-issued credit and debit cards. Orders are delivered directly by the merchants and aren’t dependent on a third-party or concierge service, making shop­ping more efficient.

DeVita notes that features such as cameras within the fridge and a companion mobile app will allow consumers to view contents and shop on the go using the device most con­venient to them, with the highest level of security. “Multiple members of the family can add to the shopping list and build a single cart over the week. Final approval and submission of the cart is secured through a four-digit PIN to allow more con­trol and avoid ordering duplicate items. Virtual-aisle shopping technology allows consumers to search for their favorite brands across multiple grocers. Since the app directly connects grocers, consumers are able to access deals and coupons, and there is no markup on delivery charges.”

The family cart is intelligent and learns from shopping habits, and MasterCard is continuing to work with partners to create simple and convenient experiences. “Consumers appre­ciate the convenience, and merchants value having another way to engage with customers and build their brands,” DeVita observes.

Groceries by MasterCard was developed in a partnership between MasterCard Labs and Samsung. At the 2016 refrig­erator launch, consumers were able to shop and select their needed items and favorite brands from leading online gro­cer and key integration partner FreshDirect, as well as from ShopRite. Groceries by MasterCard is creating a new chan­nel of consumer engagement for fellow online launch partners FreshDirect and MyWebGrocer, whose respective executives are equally pumped about the prospects for seamless consumer convenience.

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.