The grocery sector is a technology hotbed. Data is being collected and analysed at every point from farm to fork. When used effectively, this data is helping to create a more intelligent, profitable and sustainable business and a better experience for the end customer.
The opportunity and necessity for innovation in the sector is clear. The UK food and grocery market is forecast to grow by 14.8% between now and 2023, making it worth £218.5bn. But it’s no longer about the Big Four supermarkets. For example, discounters are projected to achieve the biggest cash gain in sales over the next five years (30% of the total) as they open new stores and fine tune their format. Non-traditional grocery outlets like Amazon Fresh stand on the side-lines, ready to disrupt the industry. But even with a slew of upstarts, online sales will remain the fastest growing channel.
Historically, the sector has been reactive in responding to the digital age; getting by with solving the problems of the new world with old solutions – hiring great people and optimising technology at the siloed, process level. But things have changed. These old solutions will no longer work on their own.
New intelligent technology advancements allow for automation of repetitive tasks, freeing up employees to shift from sales-enabling tasks like price checks, and manual inventory management, to sales-generation tasks, like individual customer service and forecast-driven product replenishment. These are the value-add tasks that drive customer satisfaction, business innovation and a more sustainable supply chain.
Having worked with hundreds of retailers going through the digital transformation process I know that the results speak for themselves. I also know that good things don’t always come easy. What I have learned is that the businesses that are able to rapidly implement new technologies and begin seeing business gains, have four things in common:
1. They approach change as a constant and implement tools to help them adapt
Digital is transforming our world, and it’s not just about one change, it’s about constant and rapid change. Self-service kiosks are the perfect example of a customer innovation that was adapted quickly by grocers and has made a major impact on the bottom line.
Changes like these can seem daunting, especially when employees are accustomed to working with legacy systems they know, trust and understand. But all businesses need to adapt or die. Biscuit and confectionary maker Pladis is a great example. Last year, it implemented a new cloud ERP system which helped it move beyond paper-based, manual business processes to run a more efficient supply chain. Now, product managers can see real-time data being generated from production to sales. They have access to a single version of the truth, standardised data and timely and accurate brand-product-customer profitability analysis which helps them make better, more informed decisions and improves their demand and supply planning.
Pladis didn’t approach digital transformation as just a practical implementation, it was a mental shift too. Flexibility, openness, agility; these are the things that allowed Pladis to embrace innovation.
2. They always focus on customer experience
Retailers that add services, but don’t focus on experiences, stand to lose, rather than retain customers. Grocers need to know what their customers expect them to deliver; whether that’s quality, cost effectiveness, variety or increasingly, an ethical and sustainable mindset. Retailers based in multiple regions also have the added challenge and complexity of fulfilling different customer expectations in each location.
Recently, UK grocer, Co-op implemented intelligent learning and data analytics tools to help it identify patterns and trends; like understanding that customers in quiet villages make time for conversation with store colleagues whilst busy Londoners prefer to get in and out efficiently and anonymously. Knowing customers’ tastes and habits helps the grocer to reduce waste and tailor the store to its local community.
By monitoring the performance of different product ranges, Co-op can track which items work best in which stores so it can standardise its supplies where possible, but still give customers a sense of familiarity. Customer loyalty can spring from something as simple as offering a locally produced jam. Being connected and data-driven can help retailers understand and react to what their customers really want.
3. They show commitment at every level
Once a business has embarked on a digital transformation programme, it’s critical to keep focusing on the end results (this gets easier once you start to experience benefits). That means transformation leaders need buy-in from senior management and 100% commitment from the outset, even when there are unavoidable challenges along the way.
This commitment is not just from company leadership, but everyone from the ground up – from store staff and warehouse workers to IT support and logistics operators. For truly successful technology implementation, you need the support of the people who’ll be implementing it and those who will be working with the technology, and with customers, every day.
4. They do their homework and choose the right partner
Even a great system is only as good as the people helping to set it up. Choosing the right integration partner is critical to the success of a new technology project, and this choice needs to tick some basics.
The right partner should have industry expertise, committed resources to the project, tools and capabilities that go beyond basic implementation to help shape a future digital strategy. They should also have the vision and financial stability to keep investing in new technologies such as blockchain, IoT, artificial intelligence and conversational commerce.
With the right people guiding you, the road to digital transformation not only feels easy, it feels inevitable.
The grocery landscape is fundamentally changing. Processes like optimised replenishment, pricing and waste management need to change as well. But digital transformation shouldn’t be looked at as moving away from the way things are in this moment. Rather, it should be approached as moving closer to what the customer wants… today and in the future.