The Hershey Company isn’t just talking about the future of food retail. Through Lina Yang, the futurist at Hershey’s Advanced Technology Lab, and Brian Kavanagh, the senior director of insights driven performance and retail evolution, the chocolate company is trying to create its preferred future and getting its new ideas into stores.
Yang’s team looks at what is coming, both through trends and technology, then works to make prototypes to show future opportunities. Kavanagh is working on a three-year innovation pipeline to transform the retail experience. His group takes what Yang’s team builds, as well as what the consumer shopper insight department finds, and tries to test some of those shopping ideas into retail partners.
Last month, the two food futurists talked with Food Dive about what’s coming next for food retail and how grocery stores can address some of the challenges heading their way.
Food Dive: What do you see as the biggest trends in grocery retail for the year ahead?
Yang: Specifically, we are seeing the meal vs. ingredients. You see a plethora of meal delivery out there and that is going to really force everyone to follow suit. If you think about it, that’s a much more natural way for someone to want to shop for food than just going after ingredients. I think that’s going to continue and something that consumers will find great benefit from.
Another piece is the whole frictionless piece, and this is not to confuse with convenience. Everyone wants convenience, but frictionless is making an experience so it’s seamless.
Kavanagh: If you think about it, I don’t know how many people are super-jazzed about going out and getting their groceries. It’s not like going to a mall or department store where it’s truly experiential. You look at click and collect and other options that are coming out now, and while they may not be the most ease and frictionless solution today, they are driving to creating something that takes some of the routine out of the shopping experience.
Food Dive: A lot of technology is playing a role in how people shop for groceries today. Can you cite some of the new tech you see as having a major impact on shopping in the year ahead?
Yang: I think payments are going to be big. If you look at Amazon Go and its concept store, you can just walk in and out and there is no payment. For years people have been envisioning this and I think the fact that they are doing this in a physical store where you can experience it, that will really accelerate how the other experiences will have to follow suit.
Kavanagh: If you think about from a traditional perspective, everyone is talking about what is the checkout of the future. When you’re online, it’s not really a check-out anymore, it’s more about the check-in. If they have all your information before you even build your basket online, how do you transfer that to the physical brick-and-mortar world. That alleviates one more pain-point in the process.
Yang: I’m really excited to see how artificial intelligence and machine learning will help support exactly what Brian is talking about, and what starts to come out from leveraging that type of technology.
Food Dive: Why is it so important to innovate and make things easier. What are consumers looking and asking for in their grocery experience?
Kavanagh: The way we look at it is we are in a retail revolution right now. The old blueprint of “stack them high and watch them fly” has gone by the wayside. You have the impact of the digital experience and all these online options. The retailer has to do something in the brick-and-mortar sphere to retain some of their shoppers and retail some of their baskets. The one thing you can offer in that physical space is an experience and an engagement—something more fun, social and that they can share with others.
Yang: They have every opportunity to become a destination experience. My vision is that in 10 years, we’ll be telling people who were born today that there used to be shopping carts and we went up and down the aisles and got these individual ingredients and put them into the cart, and they’ll be like, “No way!”
Food Dive: What was the genesis behind Medley, the interactive, multi-tech experimental grocery store that Hershey Lab has in its Global Customer Innovation Center?
Yang: At the Hershey Lab we did a study on the future of smart shopping and the question was, let’s take a look at all the trends and all the signals and technology and say, “What would consumers want the shopping experience to be?” We wanted to forget about the current infrastructure and pretend it did not exist. Knowing about current technology today and knowing what’s coming in the future, how would somebody want to shop? That’s how we conceived it, and then we worked with Brian on how that affects the in-store experience and coming up with those concepts.
Kavanagh: We set this up and frame up the start of our meetings as “what if…” What you’re about to see on this day as we walk you through are solutions for your business. We’re not only thinking about the problems of today but we’re keeping an eye on what could happen in the future. This allows them to bring down some of those barriers that are in their heads today.
Yang: Medley was built as a storytelling concept to really spark discussion about what the future of retail could look like and the people we are meeting with have the absolute ability to shape that future.
Food Dive: How do you use the analytics and data you collect to help Hershey’s in its mission to innovate and grow?
Kavanagh: The way I look at it is just about everything we do internally at Hershey and what we come up with from our product to innovation is all based on insights and how we’re connecting with our shopper and consumer. Whether it be traditional research methods or leveraging any type of machine learning through any type of new technology is out there. We have a lot of folks in the building that are harnessing the data that we have and that’s a key connection to being successful in the future—being able to tap into the vast, numerous data sources that are available today to continue to hone these ideas and concepts.