Opportunities and challenges of Retail 4.0 in grocery stores: a conceptual framework

In recent years, the concept of Industry 4.0 has been extended to the retail world, leading some authors to introduce the notion of Retail 4.0. This paper highlights that the current understanding of this concept is not limited to omnichannel retailing, but rather is driven by the use of key 4.0 enabling technologies such as Data Analytics, Machine Learning, Augmented Reality, Virtual Reality, Cybersecurity, and Robotics. While some sectors of the retail industry have experienced a rapid transition to e-commerce (Retail 3.0) and are now moving to Retail 4.0, grocery retail is still concentrated in bricks-and-mortar stores. Some of them are losing revenue and being forced to evolve due to changing consumer habits and competition from other service providers. The aim of this paper is to investigate how 4.0 technologies could be implemented to help small grocery stores to overcome their daily challenges. To this end, the Soft Systems Methodology is used, a method based on systems thinking that provides a structured process for dealing with situations that are perceived as problematic and in need of improvement. The initial stage of the method, known as Rich Pictures, allowed to frame the problem situation of technological innovation in grocery shop management based on interviews with stakeholders. Subsequent stages, including the so-called CATWOE analysis and conceptual system modelling, allowed for the construction of a descriptive baseline model of the current service. This model was then aligned with the 4.0 Retail technologies to determine which phases they could be integrated into, and with the problematic aspects identified in the first phase, evaluating feasible innovation paths. Among the various technologies, electronic shelf labels emerge as the most feasible and useful technology for initial implementation. It is also desirable to introduce some application supporting home deliveries, which has also a social value within ageing customers in rural areas.