The year 2022 helped crystalize what the connected grocery shopping experience looks like — consumers will not abandon shopping in-store, but will increasingly rely on digital shopping. 

Online grocery shopping is expected to reach up to 35% in the next four years, but grocery retailers will still make a large portion of their sales in-store. 

Looking ahead, shopping will be hybrid, blending in-store and digital shopping experiences. Given that omnichannel consumers outspend traditional in-store consumers as much as two to four times, providing hybrid experiences can bring a big boost to retailers’ bottom lines. 

Staying competitive in retail requires delivering the end-to-end experiences consumers want, from in-store inspiration to multiple choices in fulfillment. Retailers should stay ahead of the trends in order to thrive in the present and prepare for the future. 

We’re here to help — starting with a review of the top retail innovations in 2022 and highlighting what we can expect in 2023 and beyond.

Retail innovation #1: Unifying the commerce experiences, both online and in-store

Integration across channels is key in 2023. Separating in-store and digital operations — or even worse, trying to “manage” them using multiple different systems — is no longer an option. Instead, retailers are incorporating technology that seamlessly unifies the online and in-store shopping experience.

This includes several new features for consumers and retailers, including:

• AI-powered smart carts equipped with scales, sensors, and touchscreens to help consumers navigate the store without manually scanning each item, while simultaneously streamlining checkout

• Electronic shelf labels that make it easier for consumers to find products and discover new ones, while reducing the need to rely on associates to manually update pricing

• Out-of-stock data that simplifies the shelf-stocking process by informing retailers when items need to be replenished

Retail innovation #2: Expanding fulfillment options to deliver both speed and efficiency

Fast delivery is not enough. Grocery retailers realize they must deliver speed and efficiency. Why?

There’s no “one-size-fits-all” grocery basket. Shopping baskets vary from person to person, and even differ for the same consumer from occasion to occasion. It’s exceedingly difficult trying to narrow your range of products in order to deliver products faster.

Consumers want and expect options. Establishing and streamlining virtual convenience stores was one trend in 2022 that helped retailers deliver multiple fulfillment options to consumers. 

With virtual convenience stores, consumers get quick delivery and a broad selection of fresh groceries, pantry, and household essentials. This solution streamlines the shopping experience by giving customers access to nearly the entire catalog, all with same-day delivery or pickup in as fast as 30 minutes.

Retail innovation #3: Competing with food service businesses across the entire meals spectrum

For grocers and other food retailers, the competition across food service is fierce. Grocery retailers have found opportunities to compete using real-time ordering. However, there has been a catch: real-time ordering has historically needed to be managed manually and through a separate platform. 

Not anymore. Real-time ordering technology incorporates made-to-order and same-day meal service platforms into the same system. 

This technology offers several benefits, including:

• Limiting the number of systems teams rely on, in order to reduce errors
• Reducing the time needed for staff training
• Eliminating manual steps within in-store operations 
• Empowering retailers to compete with restaurants and other made-to-order food services

What can we expect in 2023, and beyond?

These retail innovations defined 2022 and will shape 2023. But what comes next?

According to the Bureau of Labor Statistics, food prices rose by 10.4% in 2022. Good news for grocers is that in recent months grocery delivery has been more resilient than restaurant delivery, growing at +16% year over year from Q4 2021 to Q3 2022, according to Instacart and third-party data, while online restaurant delivery experienced slower growth of +5% year over year, according to the US Bureau of Labor Statistics and US Department of Agriculture. However, given experts expect inflation will remain as high as 3.5% in 2023, we predict that consumers will continue to prioritize value. Affordability will be a key factor driving product and channel purchase decisions. 

New technology helps retailers find the pricing “sweet spot” to optimize margins, while still making the grocery shopping experience more affordable for consumers. AI-powered pricing and promotions technology gives retailers the opportunity to transform pricing strategies and promotions to serve all consumers. 

It’s equally important for retailers to offer EBT SNAP payments on their e-commerce platforms. 

Given that an estimated 30 million consumers will continue to rely on SNAP benefits in 2023, this is a crucial way to increase access to healthy food for more customers.

In addition to seeking value, consumers are also focused on leading healthier, more nutritious lifestyles. Last fall, the White House Conference on Hunger, Nutrition and Health hosted a variety of retailers, nutritional experts and organizations to address the accessibility of healthy food choices for consumers. Groups in attendance laid out a wide variety of plans to fight hunger and diet-related disease, highlighting the important role of grocers and tech providers in the industry. As part of Instacart’s work in the space, we recently launched Instacart Health, which is designed to deliver the ingredients for healthier living, with grocery innovations that include new partnerships, cutting-edge research and public policy advocacy.

Finally, we predict that retailers will need to continue offering multiple shopping options for consumers, while prioritizing efficiency. For instance, pickup will continue to be optimized to improve efficiency, reliability, and speed. With hybrid fulfillment spaces, retailers can set aside common items for fast delivery of small orders, while still maintaining a full inventory space to meet full-basket orders. However, given there will never be one single fulfillment strategy that meets the needs of every retailer, it’s important for retailers to find a flexible technology partner that can provide working solutions for every step in the fulfillment process.

We’re here to help retailers stay a step ahead of these trends

While 2022 gave us more clarity, we know the retail landscape is constantly changing. Staying ahead of retail trends is critical.

At Instacart, we’re spearheading ideas, insights, and innovations to help retailers quickly respond to a continuously evolving landscape, better serve their customers, and compete — and win — in the marketplace.

See how Instacart serves retailers with the grocery innovations and solutions to grow their business – now and into the future. 

Instacart

Author

Instacart is the leading grocery technology company in North America, partnering with more than 1,400 national, regional, and local retail banners to deliver from more than 80,000 stores across more than 14,000 cities in North America. To read more Instacart posts, you can browse the company blog or search by keyword using the search bar at the top of the page.