At the FMI Midwinter 2024 Executive Conference, the theme was “Seize the Change.” An apt description of the transformation taking place across the grocery retail industry as they address industry and societal challenges through technology.
The question for grocery retailers isn’t “Do I need technology?” but “How do I harness technology?” And when looking at technology solutions, there are a lot of options, but any solution must address four questions:
- Will it help increase margin revenue?
- Will it help reduce shrink?
- Will it make my in-store associates more efficient in their daily tasks?
- Will it provide my customers with a better shopping experience?
Invafresh was proud to be a Title Sponsor again at the FMI Midwinter 2024 Executive Conference. Lots of great conversations and sessions over the three days.
Here are our three key takeaways from our time on Marco Island in Florida.
- Artificial Intelligence
- Food Waste
The Expansiveness of Artificial Intelligence
It is near impossible to avoid “AI.” Even solutions that really don’t use AI use it as an adjective to describe their products. But for grocery retail it is both real and expansive, potentially reaching into every aspect of operations.
But AI itself isn’t the solution. It’s a means to an end. Retailers must first understand the problems they are trying to solve and the desired outcomes. A key takeaway for retailers is to start with documenting your problem statements. What are problems are trying to solve and determine how technology can address those problems. From there you can decide how AI can be applied.
There was much discussion about Generative AI, or retrieval augmented generation, a form of artificial intelligence that is designed to generate new content such as text, video, or images. There are many use cases for Generative AI in grocery retail, including demand forecasting, supply chain optimization, dynamic pricing, order tracking, customer segmentation & personalization, and expiry management.
Regardless of how AI is utilized, true value is realized when integrated into existing workflows, processes, and systems. It’s about augmenting labor resources – making in-store associates more efficient by reducing time spent on mundane activities and increasing time spent on high-value activities such as with customers.
The Dichotomy of Food Waste and Food Insecurity
Another key topic at this year’s event was food waste, including discussions on health and wellness. Food waste is fast becoming a significant issue for grocery retailers and society in general with reports suggesting 30-40% of food in the United States is wasted while, at the same time, nearly 42 million Americans (1 in 8) struggle with hunger. Two data points that are very much in conflict with each other.
While the majority of food waste – upwards of 60% – occurs at the household level, there is a role grocery retailers can play to reduce this figure. Today, many grocery retailers are working with local charities and foundations to address the issue and provide solutions. And there are technological solutions, such as markdown optimization and expiry management, to reduce the volume of food left unsold on shelves and divert it from landfills. Also, store merchandising programs that focus on healthy recipes that are portion controlled can also lead to both reduced food waste and healthier eating habits. A great example of such a program is The Fresh Market’s “Little Big Meal.” where their guests are provided recipes that are fresh, healthy, value focused, and portioned for a family of four.
And we are seeing governments and regulatory bodies getting involved to address these issues. The U.S. government has set a goal to reduce food waste by 50% by 2030 through the “2030 Food Loss and Waste Reduction Goal”. With more than 85% of greenhouse gas emissions coming from landfilled food waste, there is a negative impact on climate change from all this wasted food.
Analytics – The Science of Grocery Retail
Grocery retailers possess a wealth of data. The operational challenge is how to harness that data to provide a singular view of the business at the departmental level, the store level, and the enterprise level. Data richness provides a strong foundation for embracing technology and the change that comes with it.
Analytics plays a critical role in any business and grocery retail is no different. The challenge is to avoid data silos – or knowledge shadows – that can result in decisions being made on disparate data sets that conflict with each other and that hinder a retailer’s ability to achieve visibility through data.
The opportunity for grocery retailers is to turn data into meaningful action that improves revenue margin, reduces food waste, increases labor efficiency, and delivers the freshest experience for shoppers.
As January rolls around, we are always filled with hope and optimism for the promise that a new year brings. And FMI Midwinter 2024 is always a great way to kick off the year as some of the best minds come together to collaborate and inspire.
It is exciting to see the potential of the grocery industry and the transformation that is occurring, fueled by technology. As Leslie Sarasin, President & CEO at FMI, stated in her keynote, nothing is permanent except for change and “while change is accompanied by discomfort, it is necessary for growth because growth doesn’t happen without change.”
Seize the Change!