The COVID-19 crisis has quickened the advance of e-commerce and a range of other technologies important to food retail.
Baking companies need to stay abreast of the changing landscape and embrace technologies that further build their retail businesses, according to Gary Hawkins, founder and CEO of the Center for Advancing Retail & Technology (CART).
“The pandemic has accelerated nearly everything that’s been happening across retail over the last several years,” he said on American Bakers Association’s podcast, Bake to the Future. “It has literally accelerated the growth of online shopping probably by five years in the last five weeks. Similarly, we’re going to see technologies like augmented reality and virtual reality coming into the market very quickly. All this opens up fascinating opportunities for brands, so companies need to begin to move in these directions.”
Hawkins was interviewed by Katie Juhl, ABA’s Director of Communications and Marketing, and Hailey Blumenreich, Marketing and Communications Coordinator.
New Online Shopping Landscape Emerges
A surge in e-commerce during the pandemic has altered the trajectory for online shopping.
“I've talked to many retailers that have seen their online shopping, double, triple, quadruple, and in some cases even go up ten-fold,” he said. “So there have been massive increases.”
This development has led retailers to consider improved ways of fulfilling orders. One result is a growing interest in micro-fulfillment centers as faster and more efficient alternatives to in-store picking of products, he said.
Micro-fulfillment centers “are automated centers in which, effectively, robots pick individual products to fulfill an order,” Hawkins explained. These centers are typically about 5,000 to 10,000 square feet in size, and can be standalone or attached to an existing store site.
Packaging, Logistics Need to Adjust
Bakers need to consider new implications for product packaging that result from the e-commerce surge. Most packages were designed for products to sit on a store shelf.
“That may not any longer be the best design if the product now has to go in a tote for pickup at the store parking lot or for delivery to a home, or into a box to be shipped somewhere,” Hawkins said. “So I think we're going to see a lot of manufacturers, including across the baking industry, really reassess their packaging with a view to making it e-commerce friendly.”
Packaging and logistics will increasingly need to adjust to the needs of micro-fulfillment centers. The goal is to enable more efficient unpacking and handling at the centers.
Manufacturers are already “reassessing how their product is being shipped in to make loading up these automated fulfillment centers that much more efficient,” he said.
New Technology Supports Brand Messaging
Baking brands have new opportunities to boost messaging by leveraging emerging technologies, including virtual reality and augmented reality, Hawkins said. Virtual reality has the ability to make products “almost come alive” in the store aisles.
“Using virtual reality, that package of bread or cookies can all of a sudden become animated,” he said. “There can be information that virtually appears above it, referring to the baking process, all natural ingredients, a recipe idea, or other types of things.”
Benefits of Location Services, Digital Ads
Meanwhile, location service technology can be used to promote baking products to users of a retailer’s app.
“Let’s say in the store bakery they've just had a batch of fresh baked bread come out of the oven, or cookies or whatever,” he said. “The retailer can message every shopper within a mile of that store about a new batch of product. It’s really marketing in real time.”
Hawkins urged brands to explore how they can better collaborate with retailers to present relevant digital ads to enhance the online shopping experience. It might be as simple as an ad suggesting a purchase of a bun after a shopper has put a hot dog package into an online basket.
Opportunities to Boost Shopper Engagement
In the post-pandemic environment, messaging related to wellness and safety will be important for shopper engagement, Hawkins said.
“We're seeing a fast growing interest in keeping the immune system strong,” he said. “Messaging on the role of baked goods in a healthy diet could be really powerful at this time.”
Also important is messaging that boosts confidence in food safety. Manufacturers might benefit, for example, by producing short video messages that “show a production facility and how the cleaning is done.”
Hawkins underscored the need for strategic shifts in technology and communications in the post-pandemic period.
“Things that people thought were going to be years off may now happen in months,” he said. “So I would encourage everyone to really be aggressive in looking at new ways to communicate with shoppers, and new ways to work with your retailers around marketing, messaging, and all these types of things.”
More Bake to the Future
During the Coronavirus pandemic, Bake to the Future has been featuring in-depth conversations about the impact on the baking sector from industry leaders and the most up-to-date information from our experts at ABA.
- Listen to and read about Episode #8 with Bill Paterakis about leading a baking company during this crisis.
- Listen to and read about Episode #9 with Paula Marshall about leading when the unexpected happens.
- Listen to and read about Episode #10 with Jim Antrup about communicating during this crisis.
- Listen to and read about Episode #11 with Bob McGuire about safely delivering products during this crisis.
