It's safe to say that choice is the name of the grocery game in the U.S. today, as even a casual jaunt down store aisles will prove. From cola to marinara sauce, it's not unusual to find numerous options to choose from for staples that are ultimately the same product.
And at the front of the store where customers go to check out, an increasing number of supermarkets are supplying patrons with a plethora of payment possibilities - with mobile POS in particular gaining traction.
With consumers tethered to their mobile devices, supermarkets have taken a cue from their regulars by entering the digital era, more than they ever have before, utilizing mPOS systems that are compatible with contactless purchase programs like Apple Pay and Google Pay, among others. Indeed, this past December, The Kroger Co. announced its partnership with Chase Pay to give customers more convenience and hasten the purchase process.
8 percent increase in mobile payment usage
While cash remains the primary means by which consumers pay for goods and services, the tide is shifting, at the grocery store, too. Eighty-seven percent of Americans used cash in 2016 - the most recent year for which data is available - which is down from 93 percent in 2015, according to Blackhawk Network. But alternative payments are rising in frequency, up 8 percent in 2016 from the previous 12 months.
Chris Hjelm, chief information officer at Kroger, said the company was jumping aboard the mobile bandwagon because the paperless era has arrived, and is here to stay.
"Technology is transforming our customers' experiences and greatly influencing how we are reimagining the store of the future," Hjelm explained. "Mobile wallets enable a more seamless shopping experience for our customers and at the same time, can help us drive cost out of our business."
"Digital affects 56% of all retail transactions today."
The influence of digital on shoppers is apparent well before they walk through their grocers' doors. According to consulting and advisory services firm Deloitte, there's been a 300 percent increase in digitalization since 2013, affecting 56 percent of all customer transactions, up from 14 percent among all retailers.
The ability to buy online is another way customers are cashing in on mobile payments, in effect checking out without ever actually getting in line. Approximately 1 in every 4 shoppers say they have bought grocery store products over the internet, according to polling statistics from the Food Marketing Institute. Shopping at food stores that sell online exclusively has risen rather notably as well among consumers, up 6 percent from 2016. This is particularly true among millennials, who represent the largest generation. Generally defined as individuals ranging between 18 and 35 years of age, millennials are leading the online shopping trend, done by 40 percent of people who fall in this demographic, based on data from the FMI.
Barb Renner, Deloitte vice chairman and consumer products head, indicated buyers who prefer to shop in store still go online, but use it more for informing when they're perusing.
"The majority of food and beverage purchases still happen in the store, but consumers' online or mobile experiences impact those purchases much earlier in the shopping journey," Renner said.
Mobile payments are making transactions quicker and checkout lines shorter.
Grocers slower in mobile pay adoption
Renner added grocery stores' adoption of mobile payments and digital capabilities are taking place a bit later than other companies, such as food establishments, many of which are using POS systems for restaurants. Furthermore, grocers haven't adopted mobile in as large of numbers as other retailers have.
"Consumer products companies and retailers who create those digital touch points have a much better shot at getting the shopper's attention and loyalty before competitors, many of whom aren't even in the game yet," Renner advised.
Americans may not be regulars at certain specialty retailers, but they certainly are at food markets, whether independently owned or franchised regionally or nationally. In 2016, supermarket sales in the U.S. totaled $668 billion, according to the FMI. Around 38,500 supermarkets dot the nation's landscape, each producing an annual average of at least $2 million in sales receipts. Investing in mobile payment systems can allow grocers the ability to improve sales performance by catering to customers' preferred way to pay.