The grocery business is changing—well, it may be a bit more accurate to say it has changed. To remain relevant and succeed in a hypercon- nected era, change is inevitable. There is no magic bullet in terms of which technology or tac- tics grocers should capitalize on, as it willdepend upon each customer’s preference—some may prefer in-store shopping, others primarily order online and some look for mobile apps. The key,
however, lies in the business’s ability to be agile enough to
cater to each individual customer, and that requires placing a digital core at the heart of the business.
Going digital, however, is not quite that simple. For
years, grocers have been delaying investment in the
GROWING YOUR BIZ
technology needed to become a truly digital company.
They’ve been masters at solving business problems with
great people and optimizing at the siloed process level.
They’ve not been able to see their way to the larger benefit of a connected enterprise. For example, great supply
chains are very good at managing the metrics for success
in their process, but are not necessarily great at ensuring
the ultimate scorecard: shopper satisfaction, retention
and loyalty. Great category managers are skilled in gross
margin, sales and assortment—but not concerned much
about the effect of their strategies on supply chain costs.
Store operations has to deal with the culmination of all
these myopic processes landing in their backrooms and
on their shelves.
But the digital world has little patience for this disconnected business model. Digital is fast, it’s demanding and
it’s easy for the digital shopper to move on from those
that do not deliver. And it’s coming at the grocery industry whether it’s prepared for it or not. Digital revenue is
predicted to spike from 3%-6% today to 30%-75% in five
to 10 years. Whatever the number is, it will be substantially greater than it currently is. One thing is for sure: It’s
a pretty extensive change, and taking the first step toward
establishing a digital core is necessary.
The Case for Change
Yes, change can be hard, but there are some very compelling reasons to drive for total digital transformation, get
out of manual mode and get to a connected digital enterprise. Here are a few areas of implementation, along with
compelling reasons to make the change:
Store operations. Technology allows for automation of
repetitive tasks, enabling store associates to change their
focus from sales-enabling tasks, such as price checks,
out-of-stock management and stocking shelves at night,
to sales-generation tasks such as individual customer
service, meal solution management and fresh production
management. In addition, digital customer knowledge
increases the ability to “know” the shopper, moving store
associates away from administrative tasks and toward
enhancing the shoppers’ experience. Innovative technologies are also transforming consumer engagement
with applications such as smart shelves that connect to
your phone, smart shopping carts and in-store assistant
Supply chain. If you know your shoppers’ needs (and
you do at 30% to 50% of digital orders), you can drive
inventory efficiencies across all aspects of the supply
chain, including safety stock reductions (both store and
warehouse), stocking labor reductions, increased service
levels and increased accuracy in supplier collaboration.
Randy Evins is senior
principal for food, drug
and convenience at SAP
America, a developer of
business software solutions.
A New Day at the
Retailers must stay ahead of demand and provide innovative,
convenient shopping experiences. By Randy Evins
Expert views on retail strategy, talent management and leadership development