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Coming through with the goods

Grocery StoreIncreasing competition from white label or home brand products of major retailers is putting a lot of stress on consumer goods suppliers to deliver more innovative offerings.

Retailers are also placing requirements on consumer goods suppliers, as they are being driven by calls from consumers for something new and surprising as part of their shopping experience.

In an effort to continually capture the attention of consumers, retail stores are transitioning to much more experimental business models.

They are constantly looking to update the product range they offer consumers, as well as better target consumers by looking at demographics to cater products specifically to the local market.

They are also downsizing their brick and mortar stores to have limited shelf and cooler space that is only capable of holding a small number of each product in their expanding range.

The flow on effect is that 48 per cent of Australian and New Zealand Direct Store Delivery (DSD) operators recently surveyed by Honeywell say consumer demand for new products and packaging options continues to place pressure on their supply chain and delivery operation.

This pressure is caused by consumer goods suppliers now needing to carry more products to supply a wider range to individual stores and the different products ordered by stores based on the variance in local demand.

These increasingly complex orders and wide range of products are putting significant pressure on consumer goods suppliers’ distribution and selling systems.

The hopportunities are endless

There is no better demonstration of multiplying and more complex product ranges than beer, which is the most profitable sector of the liquor manufacturing industry in Australia.

Research by the Brewers Association of Australia and New Zealand in 2013 highlighted that the amount of craft beer produced in Australia is increasing by six per cent every year.

The proliferation of craft breweries and the subsequent effort by the large brewers to release their own wide selection of beers, is causing beer wholesalers to struggle to keep up with new product trends and to keep retailers stocked with the variety of beer now on offer.

For instance, well known Australian liquor chain, Dan Murphy’s, has a staggering 632 different beers for sale online.

This wide selection of beers would have been unheard of a decade ago and wholesalers are now having to make difficult decisions about what products to offer retailers.


Keeping a finger on the social media pulse

In order to make decisions about which products they should offer retailers and keep ahead of their competitors, it is critical for consumer goods suppliers to stay abreast of what is trending amongst consumers.

Many consumer goods suppliers are now turning to social media, often with the addition of employees specifically assigned to monitoring social media,  to tune in to consumer sentiment towards the products they stock, as well as emerging and rapidly shifting trends that influence new product introductions.

In fact, 50 per cent of Australian and New Zealand DSD operators who were surveyed as part of the Honeywell research said they were increasing the feedback and data gained from social media to make faster and more frequent changes to their product ranges and volumes.

Delivering more for less

Consumer goods supplier warehouses, which have long been used to dealing only with a small selection of products, are now busting at the seams and struggling to cope with the dramatic expansion in product variety.

In response, warehouse operators are having to concentrate on becoming more efficient and productive in order to do more with what they have and cut costs to become more competitive.

The Honeywell research revealed  the top five areas Australian and New Zealand DSD respondents thought they could save money, and the average annual savings amounts that they thought available, were $1.6 million in delivery receiving/check in, $1.3 million in beginning of day activities, $1.2 million in merchandising, $1.1 million in selling, and $1 million in delivery.


They also said they could potentially save significant amounts of time spent in paper management, data entry, and truck loading.

Additionally, less than half of Australian and New Zealand companies were satisfied that their current systems were capable of supporting their future needs and many were looking at the technologies that could help them overcome wasted time and money.

The top five technologies that Australian and New Zealand DSD operators believed would deliver a positive return on investment (ROI) included warehouse / truck loading automation, tablet computers, barcode scanning, retailer data sync and collaboration and wireless WAN communications.

This technology list is largely shaped by the need to arm varied worker roles – consumer goods supplier distribution centre (DC) workers and field workers (sales, merchandising and delivery) – with the right tools to make them more efficient and productive.

Another major factor when it came to technology choice was longevity, as many Australian and New Zealand DSD operators are looking to cut costs by keeping their equipment for longer periods.

The Honeywell survey results showed that 41 per cent of Australian and New Zealand operators keep their technology for two to three years and 28 per cent keep their technology for four to five years.

Important considerations when looking for technology that will stand the test of time is ruggedness and future proofed technologies.Ruggedness is important for both DC and field workers who need technology that withstands knocks, drops,  and hot or cold environments. Investing in future proof technologies is also vital in a fast moving DSD and technology climate.

Brian Schulte is industry marketing director at Honeywell Scanning and Mobility.

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