of the digital world on shopping and shoppers. This “wide-angle refresh” is more than
just making space available to accommodate
the expected increased utilization of the local
store as an e-commerce warehouse and picking
center; it involves rebalancing the entire store
to better prepare to serve the changes consumers have undergone as a result of their worlds
having taken a new trajectory in the digital age.
That will a;ect everything from amounts and
kinds of products in them to the size and skills
of the sta; who work in them.
To a degree, “phygitalization” ;I think I just
did make that up; is something of a thread
stitching together any number of events big
and small, positive and negative, that are shaping the industry today. Albertsons, for example, noted recently that it anticipated a ;;;
decrease in competitive openings this year.
That’s pretty signi;cant, and can be explained
in part by companies such as Kroger joining
Walmart in new-store austerity. Investment
that at one time might have been going toward
constructing new sites—in Walmart’s case,
hundreds and hundreds a year—instead is
being used to address what’s going on inside
the ones they already have.
Kroger in particular is making a huge bet this
year on what it calls “rede;ning the customer
experience” as an element of its Restock plan.
The Cincinnati-based company said it would
boost the percentage of its ;eet seeing changes
inside from about ;; to ;;; in a typical year
to ;;; to ;;; over the next three years. Kroger said it would utilize its proprietary data to
execute a “macro space optimization” of those
stores that will likely result in a quarter of its
categories decreasing in size; the integration
of previously segregated natural and organic
foods; the expansion of space devoted to growing categories, such as snacks and prepared
foods; and the addition of technologies to help
the store become more e;cient and behave like
the digital world it inhabits—such as the Scan,
Bag, Go program headed to about ;;; Kroger
stores this year.
It’s ambitious, and can be risky if all those
changes disrupt stores enough to rattle consumers. But it’s probably going to be a necessity in a world where, according to Gildenberg’s
description, growth in ;;;; is coming from
“uncomfortable places,” with equally uncomfortable words to describe them.
Except in those cases when I make up fake words myself, I’m typically not comfortable using them, but I ought to apologize in advance: You’re probably going to hear the word “phygital” fairly frequently this year. Indeed, the buzzword, describing the ;ects on physical environments as they adapt to the omnichannel world, came
up in Kantar Retail’s recently published ;;;;
In that report, Bryan Gildenberg, Kantar’s
chief knowledge o;cer, predicts that this year
will largely be de;ned by a move among brick-and-mortar retailers to reinvent their physical
spaces to re;ect the transformative in;uence
Omnichannel in;uence will change store environments
as it has changed shoppers. By Jon Springer
Jon Springer is executive
editor for Winsight Grocery
Kroger is expanding its
Scan, Bag, Go program
to 400 stores this year.