Connected produce: Think outside the grocery bag
The grocery store is the last stop between the farm and our forks, and although it commands a consistent portion of our retail spending, the margins for grocers are tight.
Grocers have the challenge of providing a necessary product that is often a commodity. So, what is the local grocer to do? How does it ensure it can drive traffic and continue to capture revenue, while managing its razor-thin margins? The answer is more connectivity. As grocers become more connected, and not simply at the store level, new avenues for revenue, cost control and customer experience will present themselves.
Looking for clarity
Grocers of all kinds are looking to gain greater and more detailed insights into their supply chains. Where is product coming from? What are the steps each product takes to get to its final destination? What are the details of the suppliers that are part of the network? Locally sourced, organic and sustainably made food is no longer just a trend – it is now the norm. Consumers want to know their food’s journey from farm to fork, and they are willing to pay a premium for it. By using technologies like IoT and radio frequency ID, grocers will be able to better tag and track products at every point across the supply chain.
Greater in-store connectivity
Store space is precious, and every square metre needs to be optimised to ensure profits. Store shelf allocation is an enigma that has haunted grocers since the dawn of time. What is the right mix? How can grocers ensure store shelves are always stocked? What product is misplaced? What inventory is in the storeroom? Once the physical stores add connectivity at the store shelf level, the back storage room and even at the logistics points, grocers will start having a complete view of what is happening within their four walls. Connected store shelves with connected inventory promise no more empty shelves.
Better customer experiences
Once grocers have a better handle on their inventory and their store, they can be more perceptive about how to use that store and the space within. Can you make the bakery larger? What about a free-sample station? With greater store connectivity, coupled with connected consumers, grocers can analyse and react to what is happening within their stores and make near-real-time changes to meet customer expectations. Grocers are already using greater connectivity to employ such simple cost-savings as turning off lights in aisles when they are customer-free. But when a grocer puts a free-sample station in a certain location, is that the optimal location? Or should it look to move it around the store depending on traffic data it can ingest from connected cameras showing the heat chart of traffic?
Smarter products, smarter usage
Connectivity does not have to end at the cash register. What about pulling more information from connected products as they are being used and consumed in the home? Grocers, as well as their suppliers, yearn for greater insights into exactly how their products are actually being used. Yes, it is important to gather point-of-sale data of what is being sold, but how are those products then actually being used? That is the key to providing the complete picture. As more home-consumer products are connected – refrigerators, ovens, kettles and beyond – our kitchens are getting on the grid. Grocers can now aspire to get greater insights into how their products are being used, not simply that they were purchased.
Consumers will always look to grocers to provide the essentials for our daily lives. As more grocers look to enhance the way they serve us, as well as better manage their businesses, connectivity is one of those aspects that will play an important role. Think outside the grocery bag: how can greater connectivity drive deeper into the consumer supply chain and further back into the supplier network? With so much competitive pressure coming from other grocers and shopping-from-home services, now is the time to look to the supply chain for greater insights and better customer connections.
Helen Masters is senior vice-president and general manager, Asia Pacific, at Infor. This article first appeared in the July issue of Inside FMCG magazine. Subscribe to print and digital magazine here.