Countdown to Groceryshop 2018: Startup Pitch Competition Participant Profile, Part 1—Locai Solutions
The Coresight Research team will be attending and participating in the Groceryshop 2018 conference, which runs October 28–31in Las Vegas. The team behind the Shoptalk retail and e-commerce conference founded this new event, which will cover the disruption of the grocery, consumer packaged goods (CPG) and related industries.
- The conference is expected to bring together 1,000 attendees and more than 150 speakers. Discussion topics will include the transformation of the retail industry, including convenience stores, supermarkets and e-commerce, and changes in the production and distribution of CPGs across multiple retail verticals. Additionally, the event will cover shifts in consumers’ shopping behavior and how they want to shop in the future in both brick-and-mortar and online formats.
- On October 28, Coresight Research CEO and Founder Deborah Weinswig will emcee a startup pitch competition featuring12 innovative, early-stage technology companies that provide solutions to solve major problems in e-commerce, grocery retail, and/or the food or CPG sector.The participating startups are Adrich, Forager, IceCreamLabs, IntraPosition, Locai Solutions, Nextuple, Observa, Packyge, Shelf.ai, Simplista, Tastry and Tochize.
- In this report, our first in a series of daily Countdown to Groceryshop 2018 reports, we profile Locai Solutions,whose turnkey e-commerce platform is specifically designed for grocery retail. The fully customizable, end-to-end solution combines an engaging shopper-facing front end with fulfillment management software. The front end provides personalized product and recipe recommendations as well as endless-aisle capability.
The Coresight Research team will be attending and participating in the Groceryshop 2018 conference, which runs October 28–31 in Las Vegas. The team behind the Shoptalk retail and e-commerce conference founded this new event, which will cover the disruption of the grocery, CPG and related industries. Coresight Research has previously partnered with Shoptalk to host that conference’s annual startup pitch competition.
Groceryshop is expected to bring together 1,000 attendees and more than 150 speakers. Discussion topics will include the transformation of the retail industry, including convenience stores, supermarkets and e-commerce, and changes in the production and distribution of CPGs across multiple retail verticals. Additionally, the event will cover the rapid shifts in how consumers discover, shop and buy—from the use of new technologies and business models to the latest trends in consumer behaviors, preferences and expectations.
According to Zia Daniell Wigder, Cofounder of Groceryshop and Chief Content Officer of Shoptalk, Groceryshop was created to meet the needs of a sector on the verge of a massive shift. The percentage of grocery sales made online in the US is only 2%–3%, significantly lower than for other categories, such as apparel and electronics, where e-commerce accounts for about 20% of sales, Wigder said.
Over the next few years, new omnichannel grocery offerings will likely go mainstream, providing consumers with new experiences as well as more convenient delivery and pickup options. Digital platforms that offer the best mix of price, selection and convenience will see increased transaction volume, while physical stores will experience change and likely play a key role in online order fulfillment.
Startup Pitch Competition
On October 28, Coresight Research CEO and Founder Deborah Weinswig will emcee a startup pitch competition featuring 12 innovative, early-stage technology companies that provide solutions to solve major problems in e-commerce, grocery retail, and/or the food or CPG sector.
Each company will present its business to a panel of judges from the investment community and to the audience. Two winners will be announced, one chosen by the panel of judges and one by audience vote, and each winner will be awarded $10,000.
Groceryshop curated the participating startups based on their solutions to some of the most pressing challenges that grocery, e-commerce, food and CPG companies are facing. All of the participating startups have less than $3 million in funding, provide business-to-business (B2B) solutions and were founded in 2014 or later.
We categorized the 12 companies into four buckets of retail disruption:
- Sourcing, Merchandising and Cataloging: Shoppers are demanding more grocery choices than ever before, and grocery retailers face challenges in keeping their assortments up to date and in sync with consumer demand.
- Enabling Grocery E-Commerce: Providing engaging and personalized online experiences while meeting consumer expectations regarding fulfillment and delivery is crucial for retailers.
- Improved Shopping Experiences: Shoppers are demanding intuitive and more seamless grocery experiences both online and in stores.
- Tracking, Measurement and Insights: Digital technology is creating new metrics and capabilities for gleaning insights for grocery retailers and CPG manufacturers.
Below, we profile Locai Solutions, one of the companies participating in the startup pitch competition at Groceryshop, which we categorize as being in the Enabling Grocery E-Commerce group.
Locai Solutions offers a turnkey e-commerce platform specifically designed for grocery retail. The fully customizable, end-to-end solution combines an engaging shopper-facing front end with fulfillment management software. The front end provides personalized product and recipe recommendations as well as endless-aisle capability. Some of Locai’s features are also available via APIs for integration into other e-commerce platforms.
Online grocery sales represent a relatively small part of the overall grocery retail market, but e-commerce is among the fastest-growing segments in grocery. Most online suppliers in the US provide same-day delivery options. In recent years, more and more firms have tried to enter the e-grocery industry, where existing operators include AmazonFresh, FreshDirect, NetGrocer, Target, Walmart and Safeway. According to Nielsen, in as few as five to seven years, 70% of consumers will be grocery shopping online. By 2022 or 2024, US shoppers are expected to spend an estimated $100 billion, or $850 per household, per year on online grocery purchases.
What Problem Is the Company Solving?
Online grocery is growing and evolving quickly. Retailers need to reassess the entire digital grocery experience and have full control of their brands through every aspect of the customer journey in order to retain customers and profitably scale their operations. Selling food is vastly different than selling other types of products, yet most e-grocery platforms are built on an antiquated, transactional experience that few shoppers consider very engaging or personal.
The Locai platform is designed to make personalization an integral part of the customer experience. Product listings, search results, promotions and recipes are all tailored to each customer’s dietary preferences, likes/dislikes, past purchase data and shopping behavior. Locai’s meal-planning feature, for example, offers customers one-click convenience when shopping a grocer’s online catalog.
As demand for online grocery offerings increases, success depends on efficiently scaling beyond current in-store fulfillment models, while also increasing customer satisfaction. For retailers, the infrastructure and resources required to deliver goods are complex and expensive. For example, perishable items require more investment in storage and delivery infrastructure (refrigeration). Grocery retailers need diverse fulfillment options to meet shifting consumer demands. Locai’s SaaS platform can support a spectrum of fulfillment formats and provide shoppers with a real-time view of a retailer’s inventory.
Locai’s fee structure includes nominal integration and setup fees based on the level of platform customization as well as recurring monthly platform license fees based on the retailer’s online volume.
CEO and Founder Mike Demko has more than 15 years of senior management experience in digital and e-commerce businesses. COO Scott DeGraeve has more than 20 years of executive management experience in the e-commerce grocery space.
The Locai tech stack is proven, with more than 1 million orders delivered. In terms of product development, the company plans to continue to use the abundance of data available in online grocery to inform its artificial intelligence and machine learning algorithms in order to further enhance the customer experience and improve its operational tools to drive down fulfillment and delivery costs.