Groceries, Health Care, Data Integration: High-Tech Feeds Growth at Loblaws

By: Lee Rickwood

April 28, 2021

Canada’s number one grocery store is on a mission to be a one-stop shop, not just for food, but digital health and related services, too.

High-tech tools and technologies can not only integrate the physical grocery store experience with online food shopping, they can be used to tap into accumulated transactional data and shopper behaviours, using sophisticated machine learning algorithms that can cross-reference other retail services and activities, including those offered at pharmacies and drug stores.

But it’s not just Loblaws, the leading grocer in Canada: other leading Canadian food chains, along with their digital solutions and technology partners, are a big part of the burgeoning grocery tech sector, or what’s called “the deep grocery” experience.

Take Toronto-based Danavation Technologies Corp., for example. The self-described Internet of Things (IoT) company provides micro e-paper display technology, such as its Digital Smart Labels solution now rolling out at Sobeys food stores.

old photo shows grocer's truck with man sitting on roof

Frank H. Sobey, a second generation grocery pioneer, sits on top of a truck loaded with sheep. The company is now using sophisticated digital tools and technologies to spur innovation, build revenues and provide new services to in-store and online customers. Provided image.

Farm Boy Inc, a fresh food retailer subsidiary of Sobeys, has a pilot project with Danavation to eventually see its Platform-as-a-Service (PaaS) solution used in more than 30 locations across Ontario. Smart, interactive food labels can be used to quickly, easily and consistently update product and pricing information, standardize in-store signage and help grocery store managers avoid potentially costly pricing errors.

Sobeys, by the way, recently announced its purchase of 51 per cent of the specialty grocery retailer Longo’s. Sobeys, in turn, is wholly-owned by Empire Company Limited, a Canadian food retailing and related real estate conglomerate with approximately $28.4 billion in annual sales and $15.0 billion in assets.

Meanwhile, Mercatus, another Toronto-based company providing high-tech solutions to food retailers, is now supporting Brookshire Grocery and Weis Markets, two U.S.-based companies, with its digital commerce solutions that analyze shopper data touch points in grocery and other retail verticals.

online shopping cart screen with snack food choices

Machine learning algorithms serve in programs from companies like Mercatus up personalized product suggestions based on shoppers’ basket, past purchase and adjacent profile data. Provided image.

The Mercatus AisleOne personalization intelligence engine generates personalized product catalogs and online search results tailored to each individual shopper. It uses proprietary machine learning algorithms to serve up personalized product suggestions based on shoppers’ basket, past purchase and adjacent profile data, while giving store operators full transparency into and control over their customers’ data and product recommendations.

While these and other developments show how closely online and physical grocery store shopping experience can be united by data, it is Canada’s number one grocery store, Loblaws (a subsidiary of Loblaw Company Ltd.), that is lining up at the cash register for an even wider integration of some rather essential services, including (but not limited to) pharmaceutical, prescription and health care.

The Brampton, ON-based company operates more than 2,400 stores across Canada. The retailer reported a 6.9 per cent year-over-year revenue gain in Q3 2020, reaching nearly $12 billion. Pretty good for a pandemic, but not surprisingly, the company’s online sales grew by 175 per cent across its grocery, pharmacy and apparel e-commerce platforms, including front-store items from its Shoppers Drug Mart and Pharmaprix pharmacies.

Loblaw delivered strong operating performance in the quarter, while investing in providing exceptional value, safety and convenience,” Galen Weston, Loblaw executive chairman, said as the results were announced. “We continued to build for the future, expanding our digital network and leveraging our PC Optimum loyalty program to create even more value for Canadian families.”

The grocer reports investing nearly $65 million in COVID-19 related safety and security for customers and colleagues in the quarter.

During that period, Loblaw/Shoppers also spent $75 million for a minority stake in Canadian telemedicine company Maple Corp., which has developed a smartphone or computer application to connect people with doctors and medical specialists.

Loblaw, as well as the Shoppers chain and its in-store pharmacies, also owns electronic medical records company QHR and virtual care service provide Medeo, giving it a fully-stocked shelf in the health care section.

PC app shown on smartphone screens

New features and functions in the PC Health app include virtual physician care with live chat, health care resources and support, nutrition guidance and personalized programs with daily activity monitoring. Provided image.

So services available through the company’s PC Health App, now available now in Atlantic Canada, Ontario, British Columbia and Alberta, are going to expand nationally over the coming months. Additional features and functionality include virtual physician care with live chat features, health care resources and support, nutrition guidance and personalized programs with daily activity monitoring (of course, customers earn PC Optimum loyalty points by completing those activities).

The PC Health app was developed in partnership with a U.S.-based health operating system technology provider, League.

And together with LifeScan, a U.S.-based diagnostic platform provider, Shoppers has introduced a digital diabetes management pilot program.

Launching at 10 select locations in Ontario, the six-month pilot program will connect with patient/customers through both the data-driven technology of the LifeScan OneTouch Reveal Plus digital diabetes platform, and personalized guidance and support from Shoppers Drug Mart pharmacists. The FDA- and Health Canada-approved digital app also provides AI-driven insights to patients, providers and payers.

Making sure it can communicate and promote its many new services to online shoppers, Loblaw late last year acquired a digital advertising technology developed by a subsidiary of Torstar Corp, known as Eyereturn Marketing.

But just in case you may have thought Loblaw was forgetting about food in the midst of its product and service expansion, fear not!

food delivery truc in front of grocery store

Gatik announced a new partnership to deploy autonomous delivery vehicles for the Loblaws grocery chain. Provided image.

Following a ten-month trial, Loblaw has a new agreement with autonomous vehicle startup Gatik to create a fleet of self-driving delivery vehicles. Gatik, with offices in Toronto and California, has a similar agreement with U.S. giant Walmart.

And don’t think that the company’s digital initiatives do not include its own community: Loblaw recently won an industry award for its in-house network, an intranet that serves more than 200,000 people, including staff, partners and affiliates.

Known as (fl!p), the grocer’s intranet has a single mobile entry point and central information hub to support streamlined communication and increased efficiency among employees. Usage is focused on innovation built upon analytics and business intelligence, and its developers emphasize the future of intranets as including effective integration with third-party applications like Microsoft Teams.

Be it for the employees or the customers or the bottom line, integration among the traditional grocery store and other modern conveniences collectively known as the “deep grocery” is being driven by new retail insights gathered by digital technologies and online applications.

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man pushes grocery cart down aisle

The physical grocery store experience is being ‘digitized’ as providers use sophisticated technologies to cross-reference other retail services and activities. Provided image.

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