Rimi Baltic Group

Anton Antonenkov

Just like any industry, the retail sector is also feeling the impact of various global processes, affecting shoppers' habits and forcing retailers to adapt fast in order to remain competitive. In the age of digitalization, familiar solutions are increasingly being replaced bynew innovative technological products.

Technologies - the panacea for all challenges?

At present, the biggest challenges facing the retail sector can only partly be resolved with the help of technology. This is firstly due to the fact that energy prices are soaring not only in Latvia, butthroughout the Baltic States. According to our customer survey, 88% of people are worried about whether they will be able to pay their bills this winter. High inflation is also impacting food prices and shoppers' habits: Baltic consumers spend over 20% of their monthly income on food. Right now, shoppers are increasingly scrutinizing how they can save, what products to buy, and whether they can afford purchases with the exception of everyday staple goods. Demand for value-for-money products is growing, and over 40% of shoppers are seeking cheaper alternatives to their favourite products. Needless to say, this also impacts retailers' product offerings, forcing them to seek a growing range of new solutions.

Secondly, the industry is still experiencing the effects of Covid-19, exacerbated by the war waged by Russia in Ukraine. These effects are manifesting themselves in the form of disruptions and breaks in logistics chains resulting in delayed deliveries, more expensive products, increased scarcity of certain raw materials, rising production and, thus, retail costs, all of which impact business results. In these circumstances, the challenge for retailersis to find ways to make their operations more efficient and to cover rising costs, at the same time minimizing their impact on customers. This is where technology plays a key role, with stores and warehouses introducing varioustools for time planning and keeping track of product “sell by” dates, along with sorting machines and other AI and RPA robotic solutions that facilitate process automation and more efficient operations. Artificial Intelligence helps to predict the products that shoppers will buy and ensures the optimal use of resources: if the system calculates the shortest delivery route, less fuel is consumed and fewer harmful emissions are released into the environment, while precise product planning cuts food waste.

A new trend – the unstaffed store

One trend that emerged during the pandemic, and is becoming increasingly popular globally, is the concept of the unstaffed store. In the Baltic States too, the first unstaffed stores are already in operation, where shoppers register via a special app, sensors register the products they choose, and, on the way out, all they have to do is pay automatically. The store format is a bit different in terms of its design, but essentially similar.A staff member is present only during the busiest hours of the day when the number of shoppers in the store is at its height, whereas the store is automated during the quieter morning and evening hours. Rimi too is considering the "unstaffed store" model, but for the time being only at a conceptual level,because first of all it is important to as certain whether shoppers in Latvia, Lithuania and Estonia are ready for such a service. Even the most innovative technology is only an ancillary tool.The most important element is still people. Moreover, it is hard to adapt this concept, which works well in small shops with a small product offering, to hypermarket format stores, and therefore we await new technological solutions that will make it possible to also introduce it in bigger stores.

Technologies for saving and sustainability

However, technologies can also help shoppers to make considerable savings. Shoppers increasingly appreciate self-service options that allow them to control their shopping. For example, instead of filling up a big grocery basket and getting an unpleasant surprise at the checkout in the form of the total bill for their shopping, shoppers can use a mobile scanner and keep track ofthe cost of the products in their basket on an item by item basis. Mobile and self-service scanners, as well as e-shopping, enable shoppers to control the total cost of theirshopping and plan whether they can afford all the items they wish to buy.

"This is where technology plays a key role, with stores and warehouses introducing various tools for time planning and keeping track of product “sell by” dates."

Globally, various planning tools are also becoming increasingly popular, which not only help you to save money, but also resolve long-standing sustainability issues. The majority of food waste is generated by house holds - families in the Baltic States waste over EUR 300 worth of food every year. In response to this challenge, among the solutions offered by Rimi to shoppers is the Empty Your Fridge app, developed in collaboration with the Danish start-up Plant Jammer, where an AI chef concocts a recipe from products that have got "stuck" in the fridge. Overall, the collaboration between the retail sector and start-ups is a major step in the development of technological solutions. Rimi is now in its third year of involvement in the Future Hub sustainability accelerator programme, which has devised solutions such as the a forementioned Empty Your Fridge app. As of now, at a conceptual level, work is also ongoing on the development of sustainable packaging for e-commerce and a solution to encourage shoppers to consume more fruit and vegetables as part of their daily diet. Another great example of how digitalization can help to cut food waste is the functionality introduced in the Rimi app, where users can see great value discounted final day products on sale in their nearest stores.

Although sustainability challenges are among the most important globally, and the European Union has set ambitious targets for reducing CO2 emissions, there are not that many technologies that can help to achieve them. Therefore, our doors are always open to start-ups offering innovative solutions to sustainability and retailing challenges.

Only today does the future seem like science fiction

With the long-term in mind, it is likely that Q-Commerce or quick shopping solutions are going to become increasingly important. Already extremely popular in the Asian market, this growing trend reflects the desire of a lot of retail customers to receive their goods immediately. They consider even a waiting time of one day to be too long. One way to meet demand from customers in a hurry is fast deliveries from e-stores with the help of digital solutions, as well as e-shop lockers from which customers can collect their orders without the involvement of store staff. All over the world, technology companies are testing drone, robot and self-driving car solutions, andin all probability they will allintegrated into every retailing in the not too distant future. Most likely, we will encounter certain obstacles, including climate-related challenges. For example, delivery robots could find it hard to traverse snow drifts or large puddles, and at present street infrastructure cannot facilitate these future technologies for every member of the public. However, our experience already tells us that different challenges and disruption to traditional order of things compel the rapid development of technologies thatis one positive outcome of  various crises.