Grocery retailers have never had it easy; as consumer demands change, companies are on a constant endeavor to tweak their product strategies, refurbish their portfolio, update their product content, and modernize how they market and sell their products – across different channels.
Pandemic-driven lockdowns and social distancing norms look set to further change the retail landscape. As convenience, differentiation, and safety become critical drivers to attract customers, the demand for new-fangled Click and Collect delivery options like Buy Online Pickup in Store (BOPIS) and Buy Online Return in Store (BORIS) is growing at an unprecedented rate.
A survey by Shopgate revealed that 61% of the surveyed retailers saw BOPIS and BORIS at the top of their omnichannel plans and investments. As these new delivery options take over, grocery retailers need to think of new ways to meet customer demands while building and sustaining market dominance. For such companies, embracing technology to drive quick and timely actions may be the only way to increase sales, reduce operating costs, and fuel customer loyalty.
When it comes to achieving success within the grocery retail industry, a lot of effort is needed to transform grocery store operations, supply chains, and procurement processes. Companies need to strengthen their commercial offerings while optimizing pricing, promotions, and delivery. Yet, many hurdles lie in the way of success. If not addressed quickly, these can lead to long-term damage.
Here’s a look at the top challenges plaguing grocery retailers:
1. Changing demands: Consumer demands are constantly changing across every industry. But what makes changing demands so challenging for the grocery retail industry, one might ask! Sustainability and health concerns are at an all-time high, which has shaken the grocery retailer’s assumptions completely. For consumers advocating healthy, natural, organic, and vegan food options, retailers are forced to rely on local and sustainable produce – to meet these new-found “conscious” needs of consumers.
2. Product convenience: Modern consumers look for convenience at every stage of the purchasing journey This is especially true in the grocery retail industry where 63% of shoppers say convenience is extremely important. From being able to easily find products, to comparing products, evaluating reviews, and finding deals and offers that best fit their needs – today’s consumers want convenience irrespective of whether they are shopping online or at a brick-and-mortar store.
3. Product differentiation: For grocery retailers, product differentiation is often a nightmare. With hundreds (or thousands) of brands offering the same products in different categories, differentiating themselves from the competition is a Herculean task – especially as global retail giants eat up a giant share of the market. Building an outside-the-box product differentiation strategy becomes extremely critical, but difficult.
4. Safety, regulatory, recalls, and traceability: Given the nature of the industry, safety regulations have to be met always – irrespective of the products grocery retailers are selling. Product expiration has to be dealt with the utmost care, so is displaying the right production information including ingredients, calories, and allergens.
5. Rising operational costs: Running a grocery retail business entails several costs including manufacturing, real estate, employee salaries, inventory, maintenance, advertising, and more. Costs increase further for those that depend on legacy systems, manual processes, and redundant back and forth operations to carry out business operations. Rising cost pressures make it extremely difficult for retailers to sustain business and/or maintain profitability.
The benefits of digital transformation
In today’s highly digital world, Master Data Management (MDM) can become the backbone of marketing, commerce, customer service, and BI/Analytics. It can help grocery retailers to organize, categorize, and localize their data according to market requirements. It can also allow them to focus on marketing and operational strategies required to meet specific customer needs. The right MDM approach can bring data from across the retail organization together and set the foundation of omnichannel content syndication. It can ensure workflows are unified and content is consistent and attribute driven.
For grocery retailers getting crushed under the weight of operational and market challenges, digital conversion through robust MDM can greatly help in modernizing workflows, reforming merchandising models, and accelerating digital engagement and conversion.
With the right MDM tools and technologies in place, retailers can improve productivity and operational efficiency. This can also help them as they look to enter new markets while expanding within existing ones. They can deliver the right products at the right time at the right place and make sure every customer need is met with speed and precision.
Here’s how a digital approach to MDM to help grocery retailers overcome the growing list of challenges would work.:
- Carry out a foundational assessment that enables current state discovery and requirements capture.
- Understand existing issues and roadblocks that come in the way of retail success and build a roadmap that addresses those issues.
- Get a deeper insight into business unit needs and regional requirements and structure and differentiate content in a way that helps improve customer experience.
- Evaluate data readiness and build the right strategies for classification, attributes, and data conversion.
- Build a Center of Excellence to define standards, document them, enforce them, and abide by them.
- Build a robust governance design that looks at existing structures and helps strengthen future state global governance.
Creating exceptional customer experiences has become a priority for grocery retailers today. Although they face a number of challenges, going digital by focusing on MDM can enable them to reinforce their content foundation, enhance operational efficiency, and meet the fluctuating needs of the modern customer. All that while also reducing operating expenses and enhancing customer satisfaction.