Our website uses cookies

Cookies enable us to provide the best experience possible and help us understand how visitors use our website. By browsing Essential Retail Magazine, you agree to our use of cookies.

Okay, I understand Learn more

Big Four Grocers Under The Microscope: Sainsbury’s ups the ante in digital convergence

Along with the other major grocers Sainsbury’s has a big challenge bringing all the separate components of its business together. Convergence is the key issue that it is grappling with and this comes under the broad heading of digital transformation.

According to Andrew Mann, former director of insight and loyalty at Sainsbury’s, the key difference between the big four grocers is the level of board commitment given to the transformation exercise and where it is prioritised in the business’ agenda. He suggests the highest digital commitment is from Sainsbury’s, with CEO Mike Coupe, fully on-board this strategic imperative.

Fundamental to this is having a single view of the customer across all channels and Mann says Sainsbury’s is at the latter stages of achieving this, with its recent acquisition of loyalty programme Nectar it is putting in place one of the final planks.

In Essential Retail's feature series looking at the big four grocers, we take a closer look at the technology Sainsbury's is developing to create a seamless business fit for the digital-savvy consumer.

Convergence

Bringing the store and online experiences together is a major focus and Sainsbury’s has been undertaking various trials. Its Scan & Go solution has been in operation in a few stores, offering a handheld scanner or utilising customers’ mobile phones via an accompanying app. This enables them to scan products as they move through the store and then check-out and pay without having to go through a till.

Linking this activity to customers’ online behaviour through the Nectar programme is also being tested on the Isle of Wight. Richard Lewis, UX design director in the design experience team at Sainsbury’s, says: “It shows there is a more mobile-led and digital-first approach that is being positively received. We can target customers with personal offers through their mobile phones and they are then more engaged.”

He adds: “If shoppers are in-store then they expect to be able to scan, pay and to have a loyalty link-up. We’re moving to having the various parts of the shopping journey come into the same place. There will be a big race [among retailers] towards this.”

Personalisation

The Isle of Wight trial is very much focused on personalising the experience for shoppers. Part of this involves Eagle Eye technology providing a more tailored Nectar scheme by allowing users to redeem digital offers and rewards across multiple channels.

Mann says this is very much a move away from traditional-style loyalty programmes as it is not based on giving points for how much is spent but instead on earning rewards for purchasing specific items and for certain behaviours such as a high frequency of shopping.

There is also a move to better tailor the online store to individual customers. Lewis says: “The grocery website is not very personalised as eCommerce is all about products. With Nectar it can be more personalised and be about certain products. Taking a Spotify and Netflix approach customers could go to the online store that’s very different to the [physical] store because it’s very personal to them. Why would they then go elsewhere to shop?”

Delivery innovations

Within dense urban environments Sainsbury’s has been improving its delivery proposition, which has included the launch of the Chop Chop app that can be used for delivering goods from a handful of stores in London in only one-hour. The company also announced in April that it was the first major grocer to trial electric bikes.

Simon Mayhew, online retail insight manager at IGD, says five bikes are being used at its Streatham Common store in South London to deliver around 100 orders per day. “They are three-times faster than vans and are also easier to park,” he says.

The big opportunity with delivery for Sainsbury’s will be to learn from the capabilities of Argos, according to Daniel Lucht, director at Research Farm, who says the general merchandise business can deliver a TV in only one hour to anywhere in the UK, but with food it is tougher: “It’s about the temperature and hygiene with food. It can be done but it’s more complicated.”

Sustainability

The use of electric bikes for deliveries is only one area that Sainsbury’s has an eye on sustainability. It is also using aerofoil technology, developed by Formula One engineers, to reduce the energy consumption on its fridges. It can help save up to 15% of energy usage by redirecting cold air back into the fridge units. The plan is to roll out the solution to all its stores during 2018.

Paul Crewe, head of sustainability at Sainsbury’s, says: “By looking outside our industry, and borrowing technology from an industry that is renowned for its speed and efficiency, we are accelerating how we are reducing the impact on the environment.”

Personnel

To deliver its strategy of convergence across channels Sainsbury’s has created the necessary structure around its people. Mayhew at IGD says the appointment of a chief digital officer has the primary objective of creating a seamless experience across its Sainsbury’s, Argos, Nectar and Sainsbury’s Bank divisions. There is also a chief customer officer with responsibility for customer data across the entire organisation.

This is reflective of Sainsbury’s taking more of a customer-centric view to its implementation of technology, according to Lewis, who says previously people acted in silos but today projects involve cross-functional teams – that could include designers, engineers, buyers, marketers and strategists – who have adopted agile ways of working that are focused on customer outcomes.


For more insight on the grocers' approach to retail technology, read the rest in our series 'Big Four under the microscope':

Asda

Morrisons - coming soon

Tesco - coming soon

What’s Hot on Essential Retail?