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By ECRS / a retail automation solutions provider
Chaos happens. No matter the size of your enterprise, no matter the skill of your staff members, nor the depth of your war chest—it won’t always be smooth sailing in your stores. Still, there’s no need to sink beneath a sea of troubles. Measures can be taken to combat the slings and arrows of Murphy’s Law. With the right approach, you can minimize chaos and (when it does appear) crush it quickly.
To reduce your own operational woes, you’ll first need to know where chaos most commonly occurs in your stores and where to expect it in the future. It must be stopped at its point of origin. Below are six of the most commonly encountered pain points in grocery retail today—and how to cure them.
No. 1—Dumb, slow cash registers
The pain point:
You might be able to find a “budget” point-of-sale provider to handle in-store transactions, but if all you’re buying is a glorified cash register, you’ll end up paying more for your upfront frugality. The adage “you get what you pay for” applies.
Cumbersome systems that lack an easy-to-use interface can slow down cashiers. Consumers that get caught up in a slow-checkout timesuck aren’t likely to keep coming back. It may take too long to look up a customer account or an inventory item, and systems relying on third-party payment processors can slow down transaction processing. If your slow checkout lines are creating cranky customers, are you really saving money?
The cure:
In grocery, it’s no secret that margins are tight. It’s imperative to manage cash flow well—but that doesn’t always mean that the cheapest solutions are cutting your costs. If your self-checkouts and cash registers are causing chaos, they’re costing you cash. As far as store investments go, your POS platform should take primacy.
You should seek out a POS technology that acts as a fulcrum to the rest of your store operations, collecting and collating information at the checkout to fuel “smart” operations in the back office, on the sales floor, online and in the supply chain.
Seek out a POS platform that’s based on best-practices, not customizations. Your best bet is to install a system that is unified-commerce-capable and backed by a reliable vendor who is established and proven.
No. 2—Stockout and inventory management costs
The pain point:
Stockout or out-of-stock (OOS) scenarios are costly on multiple fronts. Missed sales opportunities are bad enough, but losing the confidence of your customers may be even worse, resulting in the loss of once-loyal shoppers. If a consumer continues to encounter situations where they feel they’ve had their time wasted, they’ll go elsewhere.
It’s increasingly important for grocers to keep their shelves full—but never too full. Zero movement items, spoilage and expired inventory all mean lost profits too. Some stores are carrying tens of thousands of SKUs. That’s a lot of product to manage, and managing a product mix that wide can be difficult and costly. Even the big guys have problems with this.
Lastly, independent retailers often find they don’t have the same purchasing power as big box stores because they lack adequate supply chain management. Stores without electronic data interchange (EDI), for example, will have extreme difficulty securing certain product vendors.
The cure:
When you’re selecting your commerce system, you need to make sure it includes robust inventory automation functions and computer-assisted ordering.
In today’s retail technology market the cost threshold to achieve EDI capability and perpetual inventory is lower than ever. In an age where customers expect retail experiences in real time, EDI is a critical component in all successful retail platforms, for all successful retailers—national, regional and local.
Life for grocery managers becomes exponentially easier when they’ve automized their inventory operations, replacing the time-consuming guesswork of hand-made purchase ordering with scientific formulae.
No. 3—Competition from big box and online retailers
The pain point:
Amazon gobbled up Whole Foods in 2017 and opened their first Amazon Go store to the public in January 2018. Walmart acquired e-commerce site Jet.com to cover their digital side. They’ve both been aggressively experimenting with movement into local, hometown grocery markets.
These global giants have the capital and the resources to last, and they’re actively curing their own pain points in their stores. They’re dedicated to redefining the consumer experience and they’re fueling those experiences with data. Grocers stand to lose a lot of ground if they can’t keep up with these big box behemoths and find ways to counter their moves.
The cure:
Things change at a quick pace in the digital age, and grocers need to be nimble to keep up. Independent, local and regional retail operations can outperform global giants by embracing an agile approach to grocery technology. Technical agility—the ability to quickly implement and integrate disruptive and innovative technologies—ensures that grocers can keep tight data on finances, operations and inventory. With good data, your shoppers will tell you what they want to buy and what price they’re willing to pay. Amazon and Walmart already have these tools, and you need them. Escaping siloed systems and replacing them with full-spectrum solutions that can be easily improved upon is key.
Amazon and Walmart have deep, deep war chests. But they’re also impersonal and robotic. By unleashing automation to handle your financial, operational and logistical tasks, you can leverage your brand’s human touch. Shoppers will go the extra mile and even pay the extra dollar to stores that provide them with a superior experience.
No. 4—Blame-shifting silo vendors
The pain point:
Most so-called unified commerce platforms…aren’t. If your traditional checkout lanes automatically process a transaction but your mobile application needs to talk to a middleman to do the same, your commerce touchpoints aren’t in harmony. If you’re running your retail operations on a platform that relies on multiple vendors, you also have multiple points of failure.
When something goes wrong, when a transaction fails, which of these multiple vendors will take on the burden of owning the problem?
The cure:
Grocers who have implemented a comprehensive commerce platform have escaped siloed systems. The solution to this asymmetrical approach to transactions is to ditch the mercenary middlemen. You should adopt a commerce platform that uses one transaction logic internally. Such a system is configured to process all transactions the same, free of additional vendors or “middleware.”
Such a move might seem like a Herculean task, but it doesn’t need to be. Even if your current commerce platform leaves you feeling tangled in a web of technical debt, you can escape without sacrifice.
No. 5—Inaccessible support and labor costs
The pain point:
Labor costs associated with onboarding and training employees are compounded by grocery retail’s incredibly high turnover rate. In a previous edition of The Shelby Report, it was found that the average grocery store spends $67,200 annually on costs associated with staff turnover alone. The same report cites findings from the Coca-Cola Retailing Research Council: The average cost to replace a store associate making $8 per hour is $4,200.
Time, money and labor are lost when associates struggle to solve operational problems or worse yet, resign from their positions. Relating back to the previous pain point, this chaos compounds further when your store staff needs to call multiple vendors to access training resources or technical support. With annual turnover rates of almost 50 percent for part-time employees (the bulk of grocery’s workforce), stores need to find ways to control costs and simplify onboarding, technical support, training and labor.
The cure:
The human component of what fuels turnover rates will need a human solution. The Shelby Report explored ways in which medical incentives like telemedicine services may entice employees to stay. That said, reducing the stress of an associate’s work duties through automation and simplification certainly won’t hurt. When there are similar openings in the job market offering comparable pay levels, automation and ease of job duties can become a positive QOL (quality of life) factor that incentivize your employees to stay.
Training and support costs can be controlled with a combination of technology and reliable service from your technology suppliers. Certainly, store operations need to be tied into a system that is easy to use, but more importantly, stores need to be able to easily and quickly access support and resources as soon as they have the need for them. You should be looking for a technology solutions partner that offers 24/7 accessibility, transparency and easy-to-access training resources like share groups, an online support portal and success consultation.
No. 6—Changing demographics
The pain point:
Melodramatic headlines about industries that “Millennials are killing” are so commonplace, they’re a running joke on the internet. Still, there’s no denying that new consumer trends are profoundly changing retail. Inspiring brand loyalty is increasingly challenging. A 2017 Gallup Poll revealed that brands everywhere are failing to capture the full engagement of younger audiences, with only 25 percent of Millennials qualifying as “fully-engaged” (read: attached) to any brand. Perhaps they feel they can’t afford brand loyalty; consumer confidence for those 35 or younger is lower than their parents’ generation. This is a first.
Younger consumers are also eating out more than preceding generations, ordering take out from delivery services like GrubHub and Uber Eats instead of preparing their own food. Studies show that they’re spending less on groceries; they’re wanting convenience, healthy choices and a seamless experiences both on and offline.
Most grocers have 20th century origins—they’re not “tech” companies, and they still lack the capability to properly parse through and assess consumer data in ways that will help them better market and deliver products to tomorrow’s consumers.
The cure:
Technology-fueled retail will be the only retail that can survive in a Millennial and Gen-Z world. Most grocers aren’t tech companies, but they’re going to need their help to survive and thrive in the wake of radical market changes.
The resolution of each grocery pain point listed above will get grocers one step closer to earning the ever-elusive dollars of younger generations. To cater to their preference for convenience, you’ll need to offer a unified commerce experience, and you’ll need data to determine a product mix that appeals to market demand.
If you’re beefing up your prepared-foods department for example, you’ll need a comprehensive commerce solution that integrates deli scales. If you want to offer further convenience, you’ll need a click-and-collect solution as well. In both cases, your solutions need to process transactions quickly and easily.
In short, you’ve got to power up your processes with a unified commerce platform that does away with middleware and technical debt, eliminates register time suck, finds items easily, keeps shelves stocked, tells you what your shoppers buy, markets to their needs, appeals to their preferences and simplifies transactions for staff and shoppers alike.
The panacea
There’s a catch-22 in trying to solve all of these pain points individually. Your efforts to crush chaos will worsen the problem if you make your store processes more complex. Modern retailers must commit to eliminating their reliance on a patchwork of multiple middlemen. Instead, you should be looking for a reliable, established technology partner who offers full-spectrum enterprise support.
A comprehensive commerce platform, backed by such a technology partner will ensure data is more accessible to the back office, inventory is free-flowing, employees are empowered and shoppers are satisfied. With your pain points alleviated, you can leverage high-touch customer service, superior transactional experiences and better product availability to drive costs down and boost your brand appeal.
Keep reading:
A (Biased) Grocer’s Guide To Choosing A Digital Commerce Partner, Or Why I Became CEO Of Self Point
H-E-B Creates Chief Digital Officer Position As E-Commerce Grows
