Tag Archives: grocery trends

Necessity & Innovation

Nearly everyone we ask says that they want to be innovative — the best returns come to those who are first to market with a new product; those who innovate new and better processes can provide much better quality at much lower costs; those who can create a management system or culture that constantly is clicking on all cylinders can have a powerful advantage.

But how often do they happen, and why?

In our experience and research, we find that innovation is truly enigmatic:

  • Large organizations have more wherewithal to invest in systematic innovation, but smaller organizations seem more capable of capitalizing on innovative ideas.
  • Most innovations come not from visionaries at the top but from people closest to the work. Yet paradoxically, strong leadership and vision at the top of the organization are required to create an environment that fosters innovation and risk taking. Without strong leadership, organizations become bureaucratic and risk-averse.
  • Outsiders often have the most innovative ideas, but insiders’ know-how and buy-in are required to get them implemented.
  • And possibly most relevant during the current pandemic, adversity or “necessity” often brings about innovative solutions.

A recent SupermarketNews article notes that current world challenges have been exceptionally tough for supermarkets, and that the associated difficulties have brought about significant and innovative improvements in how stores are being run… now and possibly in the future!

“The first hint of the virus reaching our communities ignited the shock of an overwhelmed supply chain,” said Randy Evins, Senior Principal and Industry Advisor.

“A couple of weeks later, the consumer experience was further diversified with online pickup services, home delivery and special hours reserved for vulnerable shoppers. Some local grocers have also installed plexiglass protectors around their checkout stations and added floor markers to help ensure shoppers are standing six feet apart while waiting in line.

“There’s unquestionably a lot of ingenuity happening in supermarkets right now. But there is one area of the business that still requires attention — especially if grocers want to continue surviving this constantly evolving time as well as the eventual rebound to come.”

The article goes on to stress the importance of leveraging digital technology to ensure that all variables are considered in “real time” when making inventory management and ordering decisions.

“Digital strategies must go even deeper to cover the entire value chain — addressing the need for connected processes, real-time transactional data and immediate visibility into store-level inventory,” Evins said.

“Supermarkets can no longer afford to order new products and additional inventory blindly. They need to know what is available on their store shelves, store backrooms and distribution centers — by SKU and quantity and in light of forecasted demand.”

In support of this perspective, the article cites predictive data indicating that 25% to 30% of a grocer’s sales volume will consist of digital orders by 2025, compared to 6% to 10% today.

Evins went on to say that the use of technology, as described, will enable store employees to “have the visibility and insight they need to work more efficiently, safely and productively while keeping consumers happy and coming back over and over again.”

Certainly, given today’s circumstances, necessity has truly been the “mother of invention.”

Read related newsletter…

Pros & Cons of a 2020 Grocery Trend: Delivery

A recent article published by datecheckpro.com cited a Coresignt study indicating that “36.8% of internet-using adults polled bought groceries online in the previous 12 months, up from 23.1% in their 2018 study. That equates to approximately 93 million online grocery purchases using U.S. Census data.”

Interestingly, according to SupermaketNews, the majority of these purchases came from Walmart and Target, followed by Kroger. Walmart and Kroger have more than doubled their online grocery shopper numbers over the past 12 months, their report said. This alone translates to adding about 20 million and 6 million online customers, respectively. In addition, and as we all know, Amazon has become active in selling groceries. So, all things considered, it’s a fair assumption that online grocery shopping and home delivery are here to stay.

It’s also fair to say that, before long, consumers will demand online shopping and delivery from smaller independent stores as well.

For retailers, there are pros and cons to offering this service.

According to the article, top reasons in favor of offering online ordering and home delivery are:

  • It satisfies consumer demand for convenience.
  • It enables a retailer to get on the bandwagon of what is clearly a trending service in the industry.
  • Since the transactions are all digital, retailers get more insight into customer shopping habits and preferences – good data!

On the negative side:

  • Delivery is not easily accessible for all grocers, especially smaller stores in more rural America. Bigger chains like Walmart, Target, and Kroger have success with their grocery delivery services because they have the financial, operational and people resources to handle the complicated logistics.
  • The first “con” leads to the fact that smaller grocers will likely need to outsource the delivery portion of the equation, thus losing a good deal of the control associated with that piece.
  • Costly initial investment

Read the full article…

5 Emerging Trends That Demand Improved Supermarket Efficiency

“Shifting consumer lifestyles and habits are creating new challenges for food retailers,” says Topco in a recently released e-book.

The book goes on to suggest that supermarkets must successfully improve efficiencies and reallocate indirect spend monies to areas that will yield the highest returns for their needs in the face of today’s rewritten grocery industry landscape.

The authors list the following five trends with the greatest potential to affect your profits:

1  Experiential shopping
2  In-store restaurants
3  Digital marketing
4  Online grocery shopping
5  Gourmet, organic, and sustainably-sourced foods

See e-book… 

Increased Demand for Advanced Food Packaging

According to an article posted on fooddive.com, changes in food processing methods are impacting packaging needs.  Manufacturers rethinking operations to meet FSMA requirements may address issues of food safety by using more advanced packaging for their products.

The article listed several key issues, including:

  • Three factors driving this growth are demand for hygienic packaging, development of innovative packaging solutions, and consumer engagement.
  • Food safety, shelf life, use of fresh and/or natural ingredients, and smart packaging may come into play for manufacturers when making decisions about advanced packaging and materials.

 

Grocery Retailers Among the Most Trusted Companies!

A recent article posted on LinkedIn Pulse referenced a report by The Temkin Group that listed grocery retailers as being among the most trusted companies in the country!  The report was based on data from an online survey conducted in January 2015 of 10,000 US consumers.

Wow – nice going, guys!

The article’s main theme, however, focused on the concept of customer-driven pricing, which seems like an impossible objective… after all, one might think that, if given the choice of setting a price, customers would tend to suggest zero dollars.

But the article addresses this issue, and also goes on to more specifically define the concept of customer-driven pricing. Author Graeme McVie also suggests that “…customers are sufficiently knowledgeable about the way the commercial world operates to realize that retailers need to make a profit to stay in business, and, as such, the retailer needs to charge them something rather than nothing.”

While the piece went on to present several ideas on pricing models and to pose a number of additional questions, there were no clear conclusions drawn about the best or most effective pricing strategies for supermarkets.

However, McVie stated that these questions would be addressed in upcoming articles and discussions on LinkedIn within the “Grocery Executive Network” group.

Maybe you’d like to join the group to see what comes up next?