For grocery retailers, growth has traditionally been slow and hard to come by; in terms of products offered, store formats, shopping experiences, etc., not much has evolved in the space over the past 50 years. The last major inflection point of change was the introduction of big box stores like Wal-Mart and Target (News - Alert), which put even more pressure on traditional retailers to innovate in order to grow their businesses.
In January 2006, The Harvard Business Review published “Competing on Analytics” by Thomas H. Davenport. In this seminal article, Davenport discusses how applied data is being used to transform the customer experience.
Retailers are facing unprecedented pressure to increase sales, decrease costs and retain customers. And grocery retailers are no exception; the industry has reached new competitive heights thanks to the rise of omni-channel and new store formats. As a result, the battle for profits and shopper loyalty has never been more fierce.
Shifting market conditions and increasing competition continue to hit pressure points for retailers as a whole. Grocery is no exception. The age of omnichannel is well underway providing more options for consumers. New store formats seem to pop up on a regular basis. Shopper loyalty hangs in the balance and all signs point to its continued erosion. Intercontinental competition is about to escalate. One approach to overcome some of these challenges is retailer-supplier collaboration leading to operational excellence in the store.
Great groceries rely on an underlying infrastructure of knowledge, insights and collaboration to better serve the customer. The fuel powering great grocery is often linked to important aspects of operations - supply chain, merchandising, planning and daily execution. The tactical side of operational efficiency is strongly tied to the shopper experience through promotional effectiveness, new item introductions and on shelf availability. For all of this to work, a unified supply chain and data visibility needs to support retailer-supplier collaboration.
Baseball’s great accidental philosopher Yogi Berra once said, “If you don’t know where you are going, you might wind up someplace else.” In the retail business, knowing where you’re going means understanding sales, inventory, promotions, pricing, and assortment.
How to foster consumer-centricity
When suppliers and retailers discuss “collaboration,” what do they really mean? Is collaboration about coordinated planning or much more? A panel of experts at FMI Connect discussed this topic. As the session evolved, it became clear that some attributes of collaboration are obvious and others more subtle.
The first installment of a three-part series.
I walked into a Tuesday morning breakout session at FMI Connect 2015 and noticed about 20 people in the room 20 minutes before the start of the event. Attendees continued to steadily flow in. Just prior to session kickoff, an estimated 100 to 120 filled the room – at 8 a.m.! After that, I didn’t look back from my perch in row three. My eyes were glued to a stellar panel of experts spanning retail, supply, technology and analytics.
Analytics, the use of computer models to produce insight for decision making, is increasingly the key to competitive advantage in grocery retail. In this new world, data is the fuel that powers the engines of data science. How can consumer goods suppliers and retailers identify and use data to produce business insight?