Exploring how Finnish grocery retailers see the role of In-store technology

Abstract

The retail industry is undergoing significant transformations due to technological advancements, which influence both retailers and consumers. New retail technologies allow retailers to enhance their operations, while consumers are offered increasingly more choices and instant access to information. Studies suggest that taking advantage of new technologies is vital for retailers to maintain a competitive advantage and succeed in the future (Inman & Nikolova, 2017; Grewal et al., 2020).

One field of retail technology is in-store technology. According to a definition by IGI Global (2023), in-store technology refers to technology that businesses use in a physical environment to assist customers in purchasing goods and services. In-store technology can be seen as particularly relevant in the grocery trade, which is still heavily dependent on brick-and-mortar stores despite the rise of e-commerce.

This qualitative study aims to explore how Finnish grocery retailers see the role of in-store technology. The approach of the study is defined by a theoretical framework that addresses in-store technology through different dimensions. Empirical observations were collected through interviews with five Finnish grocery retailers that represent the majority of the Finnish grocery trade market.

The results of this study indicate that in-store technology has a two-dimensional role for Finnish grocery retailers. The primary role of in-store technology is to improve operational efficiency, which is expected to result in cost savings, for example by automating routine tasks and increasing work efficiency. The secondary, yet important role of in-store technology is to improve the customer experience by providing increased convenience and better service to customers.

The importance of in-store technology is widely recognized among Finnish grocery retailers, yet many retailers currently use a limited number of in-store technologies. When it comes to the current in-store technologies, two categories emerge: established and experimental solutions. Despite different types of in-store technologies, both categories share common objectives – enhancing operational efficiency in stores and increasing customer convenience.

Technological, organizational, and environmental factors affect the decision to adopt in-store technology. Cost-benefit analysis, long-term perspective, organizational size, and resource availability are seen as key factors affecting the decision-making process. Macroeconomic factors, such as inflation, also emerged as triggers for in-store technology adoption, especially for electronic shelf label technology.