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By Stephen Midgley, VP of marketing, Invafresh
As VP of marketing at Invafresh, Midgley is recognized as an award-winning industry veteran with a track record of developing world-class marketing teams. With more than 20 years of marketing leadership experience, he is focused on marketing innovative technology that positively impacts people every day – every time they shop for fresh groceries. At Invafresh, Midgley is recognized for his ability to execute bold ideas that contribute to meaningful change.
How To Adapt To The Changing Grocery Industry
The grocery retail industry is drastically different today from what it was a decade ago. The industry is undergoing a massive digital transformation, and there is no arguing that technology is transforming the industry for the better, for employees and shoppers alike. The future of grocery retail will heavily rely on technology to increase efficiency, drive growth, support sustainability initiatives, and as a new generation of shoppers begins to emerge, create a next-gen shopping experience.
Technology must be a core foundation to successfully executing their business strategies. Now is the time for grocers to become good tech companies before tech companies become great retailers. And we’ve already begun to see this play out with Amazon’s acquisition of Whole Foods in 2017.
As many retailers execute their 2023 business strategies, the challenge will be to sort through the myriad of technology solutions available. Grocery retailers need to avoid the pitfalls of creating data silos that are caused by technology that doesn’t integrate. They need to build upon foundational technology, such as their ERP platform, and then ensure their other tech solutions integrate seamlessly. To ensure that all employees, regardless of role, are accessing the right data at the right time to make the right decisions. This article will focus on helping grocery leaders understand what their tech stack needs to look like.
Why automation?
In a recent survey of 100+ grocery decision-makers commissioned by Invafresh, 48 percent of respondents stated that cost reduction measures were one of the main reasons they chose to implement solutions that utilized AI and automation technology. However, automation can do far more than improve cost reduction measures. The use of automation technology has shown that it can enable retailers to reallocate in-store associates to support customers, optimize supply chain processes, and reduce food waste.
Investing in AI and automation technology is the basis of any good tech strategy. As many grocery leaders will attest, the driving force behind a profitable supermarket is its ability to predict stock accurately. This is truer than ever as current macrotrends, and a generational consumer shift has made it harder to predict what needs to be in stock, how much of it, and when, leading to excessive amounts of shrink and food waste.
Automated forecasting engines reduce the chance of human error and enable grocers to forecast with 100% accuracy across their entire operations, from stores to commissaries, reducing shrink and food waste. While the industry is making great progress in its efforts to cut food waste, there is a lot of room for industry-wide improvements and growth in this sector, and automation is proving to be part of the solution; and as consumers are more invested in sustainability than ever before, it will become increasingly important for retailers to operate sustainably.
Automation also plays a big role in helping retailers address finite labor resources. While the need for in-store associates in the grocery industry will always remain, technologies like self-checkout, security, demand forecasting, and automated ordering can relieve grocery retailers experiencing staffing issues and having difficulty fulfilling many of the required in-store functions. It also allows retailers to optimize labor to better serve their customers. Over a third of respondents to the above mentioned survey said that addressing labor shortages is one the biggest challenges that automation can solve.
To learn more about why automation is an important base for your tech strategy, read the full Grocery Retail Automation Report here.
Getting the right data
Another critical element of a retailer’s tech stack should focus on analytics. Data-driven decision-making is becoming more and more crucial for success. When looking at technology solutions, it’s important to work with a vendor that provides access to extensive real-time data. Analytics solutions drive excellence through feedback mechanisms that deliver continuous improvement through ongoing decision adjustment and impact assessment that will help retailers reflect and learn from the past, predict and adapt for the future, and optimize for desired future results.
Having access to the right data at the right time helps to create comparisons and identify improvement areas and if implemented correctly across the organization, analytics provides ears to the ground especially when trends are shifting at a rapid pace. Ultimately analytics should be employed to drive strategic focus by using the right KPIs that cut through the short-term clutter.
When investing in analytics software look for software that offers secure detailed dashboards, highlighting adoption, growth, and challenges. Indepth business insight across an entire grocery chain that can be drilled down to a single store will help retailers become more adaptable and better equipped to anticipate changing shopper trends and take action before it negatively impacts their business. Analytics can help inform how retailers anticipate demand, adjust pricing, develop promotions and more – not only helping to reduce costs in departments with lower rates of shrink, but simultaneously helping to boost sales and maximize margins overall.
The building blocks for success
The rate at which grocery retailers are adopting emerging technologies continues to accelerate – and as retailers optimize store operations, they continue to raise the bar on what it means to compete within the industry.
Among such technologies, data analytics and automation are at the forefront. The promise of these technologies is to deliver the best service and value across every channel and allow in-store associates to spend more time on the floor serving customers. From informing buying and merchandising to personalizing digital experiences, the technologies mentioned above are arguably the most powerful tools in the retailer’s arsenal.
Although the current landscape can be intimidating for leaders just getting into the world of technology and even for those looking to expand and improve upon technologies already in use, ensuring a solid foundation will be essential to success. With the right tech investment, time-to-value can be accelerated. It is crucial to be intentional and purposeful in where companies invest their time and money. When partnering with tech solution providers, the value they will add to your business should be clear and aligned with your strategy. It is no longer a question of embracing technology but transforming with it.
A robust infrastructure and a solid foundation are required to reap the full benefits of evolving with technological advances. A strong foundation includes good people and a positive culture surrounding new tech. Embracing technology doesn’t have to mean fewer people either – if anything, when done right, these systems can help to enhance your best performers and increase productivity and customer satisfaction.
As we continue to move forward, it is easy to see how grocery retailers are evolving into technology-centric organizations. One thing is sure; technology will play an increasingly important role in shaping the future of grocery retail. By placing importance on automation and data analytics, retailers are giving themselves the most significant opportunity to set the foundation for their tech stack. Once these essential building blocks are in place, the sky will be the limit of what is possible.
With a combined 500+ years of Freshology experience, Invafresh has enabled fresh food retailers to create extraordinary store operations performance and differentiated customer experiences. Invafresh is deployed in 300 grocery retailers spanning a global reach of 18 countries and empowers them with omnichannel demand forecasting, merchandising, replenishment, sustainability and compliance. Invafresh’s technology has contributed to $150 million annually in waste reduction and is used in $100 million worth of transaction daily.
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