Elevating the customer shopping experience Through digital technologies: How Wegmans Food Markets became a destination

Abstract

Wegmans Food Markets have been in the Northeastern United States since 1916 and have grown into a large chain with $11.2 billion in annual sales, a reputation among consumer as “America’s favorite grocery store,” and a business model that keeps them highly competitive in the market. While the stores have the feel of a European open-air market, Wegmans is using cutting-edge technology and modern philosophies to remain relevant and expand. This article discusses the history of Wegmans and how they are employing technology to benefit customers and their bottom line.

Keywords

Wegmans food markets automation robotics grocery retailing big data analytics digital technology forecasting e-groceries cloud computing home delivery food service

Introduction

For those in the know, Wegmans is more than a grocery store. People make special trips for the selection and the food finds they can’t get at their local store. They come bearing coolers to transport their delicacies home, up to an hour drive or more. It is also popular with local shoppers, those lucky enough to live in the region Wegmans covers. What makes the stores so successful? Can their strategy be repeated? This article will discuss Wegmans’ founding philosophy and how they are using technology to remain current and conquer the market.

Wegmans case study: A company focused on quality

Founded in 1916 in Rochester, NY, Wegmans is a family company focused on “employee satisfaction, customer service, quality, and ethics” that has been called “America’s favorite grocery store” (Green and Spadaro, 2014). According to the company Web site, the regional chain boasts 52,000 employees in 107 stores across New York, Pennsylvania, New Jersey, Virginia, Maryland, Massachusetts, and North Carolina. It is one of the largest private companies in the US with reported 2021 annual sales of $11.2 billion.

According to Forbes, Wegmans is one of the 100 largest private companies in the United States. When they opened their first store in Massachusetts in 2016, 2000 people were lined up and waiting. What do they have that other companies don’t? One article puts it succinctly: “Wegmans is good at doing all the stuff the world can see just a little bit better and great about doing all the stuff no one sees a lot better” (PYMENTS Staff, 2017).

Wegmans stores are between 75,000 and 140,000 square feet with 50,000 to 70,000 products in the largest stores. The average supermarket is 38,000 square feet and, according the Food Marketing Institute, carries just over 40,000 items. They aim to feel like a “European open-air market” with fresh produce, artisan breads, imported cheeses, and international foods, along with the staples every shopper needs on a weekly basis. In addition, they boast a Market Café, with delicious selections good enough for date night, including daily fresh sushi; the Buzz Coffee shop; pizza, subs, and bakery; as well as foods to meet every dietary need, including organic and gluten free.

Wegmans has received many awards for excellence as an employer, in community service, and as a retailer. They have ranked #1 on FORTUNE magazine’s list of 15 Best Workplaces in Retail since 2015, made Forbes’ list of America’s Best Employers from 2015 to 2020, and were ranked #3 on FORTUNE’s 100 Best Companies to Work for in 2022. People magazine ranked them #1 in 2021 for 50 Companies That Care, and many more highlights that are listed on their Web site. Green and Spadaro (2014) determined that Wegmans’ successful competitive advantage would be “costly to imitate.”

One part of that cost is Wegmans’ prices. In 2015 an independent analysis by Washington consumer group Checkbook found that Wegmans prices were 13% lower than Giant or Safeway (Ferdman, 2015). In 2021, organic food from Wegmans was found to be comparable to Whole Foods, but Wegmans offers lower prices overall and has a much larger selection (Choi, 2022). They are able to accomplish this, in part, due to their vertically integrated supply chain. They control the distribution process with centers in New York and Pennsylvania. They also have their own label that includes organic and gluten-free products, which partners with local farms and appeals to “price-sensitive but quality-conscious consumers” (AG, 2015).

Not only do they do it right on the business end, but they also invest in their employees and care about diversity and inclusion for both shoppers and staff with many programs to accommodate people with disabilities. “The company worked with its vendor in designing a customer checkout counter that was accessible to employees who were wheelchair bound and who worked in that position” (Spechler, 2017). Wegmans reports that they donate over 14.5 million pounds of food to local food banks and soup kitchens annually and has a reputation for giving back to the community.

It is hard to find many people who have anything negative to say about Wegmans. Their fans have been described as “Wegmaniacs,” and Forbes reported that they have 90% positive conversations surrounding them on social media with only 6% that are negative. Their motto, “Helping you live a healthier, better life through food” seems to encompass their values, which include community giving, feeling your best, and sustainability. See Figure 1 for the values listed on their Web site.

Figure 1.

Wegman’s values. https://www.wegmans.com/values-in-action/.

Their stated goals on their Web site include “consistent low prices on the items families buy every week” with Family Pack sizes throughout the store; “exceptional levels of charitable donations,” including donating over 26 million pounds of food in 2021; and “strong employee benefit programs, including an employee scholarship program.” Wegmans provides over $5 million each year to help employees with tuition, and has awarded $135 million in scholarships to more than 44,000 employees since the program began in 1984.

The core of Wegmans’ business model is strong, with emphasis on employee satisfaction, customer service, and providing quality and value.

Technology at Wegmans

Wegmans has been expanding digital and online shopping since 2018, with an enhanced Web site and programs like Meals 2 Go. Around the same time, Wegmans partnered with Aira to offer a platform that gives descriptions for blind or low-vision customers, the first to do so (Amato-McCoy, 2018). According to Apptopia, Wegmans apps, including Wegmans, Wegmans Meals 2GO, and Wegmans SCAN, had over 84,000 downloads in the last month (see Figure 2). Wegmans SCAN allows shoppers to scan bar codes as they shop and use self-checkout when finished, making a faster, easier experience. A shoppers club membership is required to use the app, which builds up “WDollars” rewards that work like cash.

Figure 2.

Wegmans SCAN app instructions. wegmans.com.

Wegmans uses technology to improve the customer experience, not only saving time, but turning a chore into a pleasure. (See Figure 3: Customer Activity Chain.) David Roberts (2016) explains how the technology helps the average shopper:

1. The shopper can find recipes on the Wegmans Web site to meal plan for the week, and the site will automatically assemble a grocery list for what she needs. (Recipes can also be found in a monthly magazine, free for Shoppers Card members).

2. The shopper can also generate a map of the store for the most convenient way to navigate the aisles to find everything she needs.

3. Wegmans offers “single point meal stations” that has all the components needed for a meal in one location and Ready-to-Cook E-Z Oven Packages that can be placed right in the oven or Crockpot.

4. The shopper can also use the SCAN app to add each item in the cart as she goes, paying at self-checkout when done. Coupons from the Shoppers Card will be automatically applied.

5. While in the store, some locations offer child care, but all locations have “child-friendly experiences” throughout the store, such as fun cart designs, entertainment in the Market Café, or cooking classes for kids.

Figure 3.

Customer activity chain. (robertsoninovation.com).

All these perks may seem like smart marketing, or good business decisions, but Wegmans is deliberate about their technological strategy. They focus on employee learning and improving skills, making continuous learning “part of the company’s DNA” (PluralSight Staff, 2019). They have been perfecting their best practices to use technology to drive consumer value for more than 20 years, one example being how they have used paperless procurement and payment systems for all vendors, large and small (Orgel, 2003).

How Wegmans follows best practices according to the literature

The challenge of retail is that making upgrades and improvements can be difficult as the store must continue to operate, providing daily service with narrow margins. “An immense challenge is making step changes while not simply discarding existing mission-critical infrastructure” (Morrison and Marcotte, 2019). Morrison and Marcotte explain that retailers must incrementally improve their existing systems—“operate with the capabilities they have for today while transforming for tomorrow.” While adding “digitally enhanced employees” or “pervasive data management” promise gains, their effectiveness could be limited if the underlying infrastructure is crumbling (Ibid.). Likewise the number of potential emerging technologies must be investigated and Weyer et al. (2020) recommend grocers “build up knowledge regarding [their] application” to ensure their investments “enhance their value propositions, improve processes, reduce costs, and therefore generate competitive advantages.” Wegmans has a strong foundation and is adding the technologies to remain up-to-date and relevant with today’s shoppers. Going deeper into the literature to analyze what factors make a grocery store chain (or other business) successful, it is evident that Wegmans scores high in several of the categories.

1. The Shopping Experience

2. Social Responsibility

3. Big Data Analytics

4. The Use of Automation and Robotics

The shopping experience

The first item on the list is the shopping experience, and it should be clear from the case study above that Wegmans is more that Saturday-morning errands. It is a destination, a treat—an experience. Kuijpers et al. (2018) explain that reviving grocery retail to drive customers into the shop requires more interactive elements. Some examples may be digital signage that offers product information, cooking demonstrations or recipes, health-and-wellness options such as organic, specialty or local brands.

Social responsibility

A 2010 study showed the link between corporate social responsibility and trust. The use of an attractive and interactive corporate Web site makes customers more likely to pay attention, which contributes to their feels that the company is socially responsible. This interaction and positive impression enhance customers’ relationships with the company and fosters a feeling of trust. Trust then leads to positive word-of-mouth recommendations, which directly positively affects the company’s bottom line (Hong and Rim, 2010). Wegmans’ Web site very clearly spells out not only all the offerings in the store, but also all the interactions and contributions to the local community.

Big data analytics

Investing in big data analytics allows companies to create an online shopping experience for the customers, digitalize service from operations to delivery, and enhance the shopping experience—leading to “customer loyalty, revenue, and ultimately profit” (Abbu and Gopalakrishna, 2022). Big data has “profound consequences for wages, working conditions, race and gender equity, and worker power” but may not always be “obvious or even visible” (Bernhardt et al., 2021). One example is the employment of mHealth and using technology to offer accurate dietary data (Fuchs et al., 2018). İpek and Göktürk (2021) spell out the benefits of big data, saying it “can increase the visibility across the industry, ensures an integrated view of customer interaction and operational performance, and provides real-time insights to companies.”

The use of automation and robotics

In order to cut costs and allow associates to focus more on customer service, many chains are “working internally and externally to integrate…new technologies….improving efficiency and accuracy in operation from food safety all the way to the last mile of delivery” (Hofbauer, 2018). While other grocery chains (in the same region as Wegmans) have been in the news lately for their use of robots in the store to help identify messes and offer assistance, Wegmans has not yet employed any form of artificial intelligence to service their customers. However, they do employ automation and robotics in ways that may not be as evident. Just like the effects of big data analytics, the use of automation may not be obvious or visible but can have big payouts behind the scenes. Machine-learning technology can enhance the amount of network traffic and improve system flexibility, network quality, and customer experience (Mahmoud and Ismail, 2020).

Self-service

Most grocery stores have introduced some form of self-service, whether using self-checkout kiosks in the store or online shopping and delivery. “An important retail management question, therefore, is how these consumers divide grocery purchases across the retailer’s online and offline channel” (Campo and Breugelmans, 2015), and the preference for self-service is often divided by age. Older consumers have less experience with self-service technology, use it less often, are less willing to pay for express checkout, and “reported missing human interaction” (Dean, 2008). Similarly voice-activated artificial intelligent devices are a strategic and growing technology, but a framework of trust is harder to build when consumers feel a loss of “emotional attachment, self-connection and self-disclosure” (Singh, 2021). While there is some pushback, overall, consumers adapt these technologies readily, and “modernization of retail store methods has improved market solutions to speed up the process of checking out grocery items” (Abana et al., 2019).

E-grocers and online delivery

Bellamy et al. (2000) call online delivery “a powerful idea” within the grocery market. Almost everyone shops frequently and regularly, and adding web-based, online ordering with home delivery extends the power of the Internet to the local grocery store (Ibid.). Wegmans partners with Instacart and offers ordering and delivery through their Web site and app. The use of online technology is necessary to reflect how people are living their lives but also add benefit to the business in the consumer data that is available to them through each purchase (Quet and Dahdah, 2020).

Conclusion

Like many other segments of the retail population, food and grocery stores are taking advantage of technology to offer more to their customers. Some are easy to implement, such as smart shelf technology, which allows sensors to automatically track the inventory on the shelves, but other “digitalization potentials are widely known but hardly implemented in practice” (Kellermayr-Scheucher et al., 2022). Food retail has been slower to adopt options such as home delivery, which may be due to “food characteristics and regulations” (Lagorio and Pinto, 2021). However, now that the implementation of technology is being used across all sectors, it is not only reducing prices, helping in the innovation of food processing technologies, creating access to communications infrastructures, and improving storage, processing, distribution, marketing, and consumption, it also leads to a more “efficient and sustainable food supply chain.” Technology’s influence on the food industry allows it to become “more advanced, sophisticated, and efficient to cope with the challenges of food security, food safety, and food quality” (İpek and Göktürk, 2021).

Cloud computing can not only provide “substantial and significant” savings, but the collected data can also be used to “increase the visibility across the industry, ensures an integrated view of customer interaction and operational performance, and provides real-time insights to companies” that can help improve product quality and develop new markets (Ibid.).

Wegmans has shown their ability to maintain quality while evolving with the times to offer what shoppers want, delivered in the ways that work in their modern lives. The corporate office gets thousands of requests each year to expand into new markets. While they remain a family-owned business, they have retained the values of the founders while evolving to adapt to technology.

Application questions

1. What factors of the Wegmans shopping experience do you find the most attractive?

2. Do you think Wegmans’ atmosphere and deliberate efforts to emulate a “European open-air market” increases their perceived value?

3. Give examples of how automation and robotics can be used behind the scenes to improve the shopper experience.

4. Give examples of how big data analysis from Web site use, app use, and shoppers card membership can benefit Wegmans.

5. Give examples of how technology can create an equitable shopping experience for all consumers, regardless of limitation or disability (i.e. use of the Aria app for blind or low-vision shoppers and wheelchair friendly checkout lines).

Footnotes

Acknowledgments

The author would like to acknowledge the chief editors from the Journal of Information Technology Teaching Cases for allowing her to share knowledge and work experience with faculty and students worldwide. The author would like to also thank the anonymous reviewers for their insightful suggestions regarding the manuscript. She will continue to teach MBA classes in Spring 2023 and welcomes students to study at Gannon University, Erie, PA, USA. For more information about the MBA in Business Analytics program:

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Barbara Manko

Author biography

Dr. Barbara A. Manko’s interest in the fields of Business Management and Information Systems and Technology led her to pursue a Doctorate of Science in Information Systems and Communications from Robert Morris University after completing her MBA in International Business. She has taught university courses in digital marketing, human resources, business management, strategic planning, and computer science for undergraduate and MBA programs. Her recent research, published in 2021 and 2022, focuses on digital technology management, online learning for students, and how online university programs prepare students to work remotely.

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