Analytics, safety, convenience, and waste reduction will be top of mind for food retailers.
Invatron was proud to be a premier sponsor of the FMI Fresh Forward 2020 annual conference from August 18 through August 20. Over three days, industry leaders in fresh across North America gathered to discuss the pandemic’s indelible imprint on sustainability, consumers, and supply chains.
Analytics Informing End-to-End Supply Chain Visibility
Underscoring these three topics was the key role of analytics in helping fresh evolve to meet changing consumer fears, habits, and demands. That key message was driven home by Brian Baker, Managing Director for Deloitte’s Retail and Consumer Goods Practice. Successful companies are driven by analytics. Senior leadership fosters a culture that embraces technology across the organization, encouraging communication and collaboration, understanding that data silos are their downfall. Leaders agreed end-to-end visibility of demand and supply chain availability is crucial to develop going forward.
Leading food retailers acknowledged fresh food operations need to both optimize current technology and seek out new solutions to address the shortfalls many experienced in demand forecasting and supply chain availability. The coronavirus pandemic has taught the industry it must plan for the unplanned and use technology to pre-emptively address these issues by understanding how products react to different demand drivers, diversifying relationships and products, and testing their playbook’s responsiveness to planned scenarios.
Food retailers identified a need for greater visibility into the end-to-end supply chain and to better understand demand and its causes, instead of making decisions with only a single reference point as guidance. Food retailers leveraging AI and machine learning can swiftly identify and align with the changing consumer purchasing drivers of health, safety, and convenience. Technology facilitates improved collaboration and communication between retailers and manufacturers as they work together to achieve greater flexibility when responding to emerging environmental and customer preference changes.
Brian Baker discussed how food retailers can get the insights needed to solve complex challenges by integrating structured (customer and supply chain data) with unstructured data (customer insights and sentiments) into a single platform.
In order for this to succeed, there has to be a shift away from the traditional way of thinking: relying on a store operator who ‘knows their store’ to make purchasing decisions and determine forecasting by experience and gut feel. A fresh food technology platform allows retailers to understand their historical data, so they can apply it to their operations and supply chain, bringing decision making from obscurity into the line of sight of teams across the organization.
Baker identified six things grocers must bring together in order to thrive in the new normal:
- Advanced analytics insights to drive productivity, efficiency, and dynamic decision making.
- Collaborative supplier relationships to share information and build capabilities.
- Innovative transportation models to increase speed of goods to customers
- Diverse sourcing for fresh items to adapt to customers’ ever-changing expectations
- Omni-channel fulfillment / channel mix to give customers what they want, when they want it
- Visibility and traceability across networks to provide end-to-end transparency
These action plans require a deeper and broader level of collaboration between groups and data systems. Collaboration is the determining role in food retailers’ future success as they strive to innovate, build purpose, and establish continuous communication from the manufacturer to the consumer.
SAFETY IS NOW THE SECOND MOST IMPORTANT PURCHASING DRIVER, BEHIND PRICE
Drawing Consumers Back to the Store
Dr. Patricia Buckley, Managing Director for Economics at Deloitte, presented recent US consumer sentiment surveys revealing that concerns about physical and financial wellbeing are now informing shopping behavior. Worries about health are more universally felt and are deeply entwined with feelings of anxiety. Traditionally price has been the number one purchasing driver, but now safety is a close second – a mere percentage point behind. She emphasized consumers are creating new baseline expectations, depending on retailers to ensure a safe shopping and work environment.
Consumers find shopping stressful and are shopping less frequently in-store, with a significant number reducing their trips to once every two weeks. This is also pushing them to alternative e-grocery channels.
The challenge for food retailers is that fresh remains primarily an in-store purchase, although confidence in e-commerce fresh purchases is increasing. In order to draw consumers back to brick and mortar retail, grocers have to shift people’s perceptions by making safety a vital part of the consumer experience, so they feel safe to shop in-store again.
To do so, attendees shared their safety protocols using signage with evidence or subtle signs demonstrating their efforts to keep stores clean and safe. Visual clues, such as employees wearing masks, sanitizing, and handling money correctly or smelling disinfectant upon entering the store, are examples of cues to help reassure customers.
GROCERS CAN ATTRACT SHOPPERS BY FOCUSING ON CONVENIENT SOLUTIONS LIKE MEAL KITS
New Ways to Get Food into The Home
With the challenging landscape commercial foodservice faces, there is a great opportunity for food retailers to improve foodservice sales by taking advantage of the recent gains in at-home eating, snacking, and celebrating. But supermarkets are competing against the more convenient and varied dining options that restaurants offer. Susan Schwallie, President of Food and Beverage at The NPD Group, emphasized food retailers who find new ways to get food into the home will win.
Supermarkets can attract customers by focusing on convenience, offering healthy full to half-prep meal solutions. Replacing current bar formats with pre-packaged alternatives and sharing information about how the food has been safeguarded addresses shoppers’ safety concerns. And lastly, food retailers need to make their offerings more accessible with digital ordering, click and collect, and third-party delivery options.
Sustainability and Food Waste Reduction: Committing to a Waste-Free World
Sustainability is an emerging concern for both consumers and food retailers, especially as 60 million tons of food waste is generated every year in the US, resulting in a $218 billion economic loss. In response, industry leaders like Wegmans, Albertsons and Unilever are committed to a waste-free world with aggressive food waste reduction targets by 2025-2030. Viviana Alvarez, Head of Sustainability at Unilever, discussed how reducing shrink to tackle source reduction of the Food Recovery Hierarchy is the most important and effective way to meet this goal.
This is the fresh food operations playbook for 2020-2021: technology, data and analytics to drive your business, emphasis on safety to draw consumers back to the store, easy to order foodservice, and a commitment to a waste-free world.