Industry Insights: Grocery Stores are Becoming Smarter, and Grocers are Becoming Wiser

Before COVID-19, grocery was an industry we often took for granted. We walked in, got what we needed and walked back out. Nothing too crazy.

Then the pandemic happened. Suddenly large gaps appeared on shelves – and didn’t disappear for months. Grocers sold out of everything from paper products to bread and pasta to meat. Consumer packaged goods (CPG) organizations couldn’t make items fast enough to replenish them. With staff calling in sick or because schools and childcare centers were closed, grocers didn’t have enough associates available to match the heightened demand. And, as consumers, we felt the effects.

But, despite being stretched to its limits, the grocery industry weathered the storm. Grocers invested in smart technology, tightened their operations and somehow found a way to keep us all supplied. Many lessons were learned, though.

Here to reflect on some of those lessons are three Zebras who recently attended the Groceryshop conference in Las Vegas: Tim Kane, Frances Tasker and Laura Patte. They also share the things still keeping grocers up at night and where the industry is headed in the not-too-distant future:

Tim Kane: “Grocery Delivery is Getting Faster, But It’s Still Not Fast Enough”

“At Groceryshop, I was most struck by the determination of grocers to satisfy their delivery customers. We all saw grocery delivery rise in popularity during the pandemic, along with other omnichannel services. It was clear that consumers’ expectations were rising just as fast. Some of America’s largest grocers acknowledged that omnichannel customers want their orders delivered in 30 minutes. Does that sound ambitious? Well, consider this – all these grocers predicted that consumers will soon expect their groceries delivered in 15 minutes or less.

To stay competitive, all grocers must achieve ever-greater consumer expectations around delivery times. The very best way for grocers to do so will be through technology. Technology is their one means of combatting all the challenges that hamper deliveries, especially limited supply chain resources. There are a variety of solutions available, from leveraging robots to fulfill more orders, to using workforce management solutions to ensure sufficient labor is available and using prescriptive analytics to alert key decision-makers to opportunities for improvement throughout omnichannel operations.” 

Frances Tasker: “Sustainability Must Become Standard Practice”

“I noticed a huge push toward sustainability amongst both grocers and CPG organizations. Another attendee I spoke with said something that stuck with me: ‘As a grocer, you are either fully committed to being sustainable, or you’ve thought about it but haven’t yet.’ In other words, grocers fully understand and appreciate the value of being sustainable – it’s just a matter of whether they’ve taken action. Young consumers, in particular, gravitate heavily toward sustainable grocers, making corporate sustainability that much more desirable. And several methods of sustainability were discussed at Groceryshop:

- Ethics. The fair trade movement is one of the best-known examples of sustainability ethics, ensuring that farmers receive a livable wage for their goods. Other examples include limiting controversial chemicals and additives (like MSG or artificial coloring) in food, paying their own employees fair wages and donating to community initiatives.

- Environmental impact. Grocers are taking major steps to reduce their environmental footprints. From energy-efficient coolers, to increased recycling, to using minimal plastic in shipping operations, grocers are more environmentally conscious than ever before.

- Waste reduction. The grocery industry generates a fair amount of waste from various sources and is responding with renewed pushes to curb it. Grocers are trying to donate more unsold products, push reusable and/or post-consumer recycled-content shopping bags, and hone rotation practices to maximize sell through.

- Veganism. It seems like not too long ago that people were scoffing at the very concept of ‘plant-based meats.’ Now, grocery stores carry a huge variety of these meat alternatives, from burger patties, to sausages, to pre-seasoned taco filling. This is no coincidence – grocers have recognized the role these products play in their consumers’ sustainable, health-conscious and/or eco-friendly lifestyles and are all-in on keeping them on the shelves. The same commitment is shown toward all-natural and organic foods.

This means the most successful grocers in coming years will be those who act now, not later, to increase sustainability. I often tell grocers, ‘One of the fastest and easiest ways to beef up your sustainability initiatives is to target excessive waste – and that starts with getting better visibility of your inventory.’ An actionable analytics solution, like prescriptive analytics, can alert staff to a variety of issues that affect waste including:

- markdown non-compliance

- spotty rotation practices

- vendor errors

- poorly selling items still on order

- shelf gaps.”

Laura Patte: “Define and Live Your Purpose”

“At Groceryshop, it was clear that disruptive forces and changing consumer expectations are challenging all organizations, including grocers, making it imperative for them to become context-driven and purposeful. A new generation of employees, searching for new motivation and meaning in their work, is encouraging a wider debate about the responsibility of business and shopping patterns in society. There was a high level of consensus among executives that purpose matters. 

In this context, purpose is implemented as a lever to create teamwork and chivalry and connect employees to what they do on an emotional level. Grocery organizations are striving to become purposeful based on a bigger picture – how they and their people serve the community as a whole. They are embracing this concept of purpose to guide the organization’s positive value creation in a broader context. And beyond connecting personal and company ambitions, they connect with society and the environment.

Retail hardware devices provide a good avenue to help grocery employees achieve this sense of purpose. According to Zebra research, 85% of retailers agree that tech-empowered associates provide better customer experiences. This can be attributed to the technology making them feel more empowered, valued and adept at serving their customers. For example, some retailers have put their inventory events in the hands of their associates by working with self-directed scanning vendors. In rolling out the vendor-provided devices and program, grocers can emphasize the importance of inventory counts and the fact that they are entrusting this critical task to their associates. Employees feel valued and empowered when they are assigned such important work, especially when its disruption to their normal work is minimal. The employees enjoy their new responsibilities, while their employers enjoy cost savings. Everyone wins.”

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Related Reads:

• 5 Reasons Why It’s Better to Handle Your In-Store Inventory Counts In House

• Not Sure How to Get Started with a Self-Directed Physical Inventory Program in Your Retail Store? (Or Even if You Should?)

• Why Retailers Should Adopt the Millennial Mindset, Especially When It Comes to Managing Employees and Inventory Counts

• Why Now’s the Perfect Time for Retailers to Take Stock of Physical Inventory (Whether Open or Closed)