retail grocery challenges

BI, Analytics & Reporting

- 3 min read

How to overcome the challenges of modern grocery retail

Few industries have changed as much over the last year as grocery retail. As COVID-19 affected everything from personal eating habits to the way we shop for food, both supermarkets and small stores were thrust into new and previously unexplored territory. It’s clear that many challenges from the pandemic will remain for some time to come. And likewise, many of the solutions retailers have come up with have set new customer expectations that must be met going forwards. 

This is the ‘new normal’ and the question for grocery retailers now is, what will it take for us to thrive in this environment? This blog explores a couple of ways the pandemic has changed the grocery sector, and what that means for retail businesses.  

Demand was sky-high (and now it’s down to you to keep it that way) 

No one anticipated the impact COVID-19 would have on our day-to-day lives. For grocery retailers, things changed overnight when lockdowns took hold and restaurants closed their doors. This, along with people spending far more time at home, meant an increase in home cooking. And that in turn meant a surge in demand for grocery products – especially for frozen foods, which saw a 21% increase in sales 

The challenge for retailers now is keeping that custom as the world returns to business as usual. It’s hard to say whether the future will see more lockdowns, but what we do know is that home cooking might be here to stay. Recent reports show that 71% of people in the US plan to cook more even after the pandemic ends 

This is great news for grocery retailers, providing an opportunity to tap into a new market with the right products and offers. The key to doing this, as with many things in modern retail, will be in collating and analyzing the data that provides insight into what customers want and when. This could be anything from weather patterns that affect seasonal food production to healthy eating trends and sentiment analysis on social media.  

It’s likely that those who think outside the box when it comes to gathering these insights will stand to gain a major advantage. 

eCommerce is key…

The other major trend grocery retailers have seen since the start of the pandemic is a decrease in footfall and huge demand for online shopping. A big part of this was born out of necessity, as people were urged to stay home as much as possible. The resulting influx in home delivery requests was a change in business model that many stores simply weren’t ready for.  

Delivering perishable goods is always challenging, but doing so on the scale required during a global pandemic proved more than difficult. Going forward, retailers can expect to see demand for these services remain to some extent, with some sources indicating that an estimated one in three customers will continue to shop online for food.   

The key for retailers here is making online experiences as frictionless as possible for those who plan to shop this way, and ensuring that the entire process, from ordering to delivery, is scalable enough to meet any future peaks or troughs in demand. Again, the right data and analytics processes will go a long way to predicting these peaks and troughs before they happen.   

Likewise, continued investment in perfecting eCommerce platforms may prove especially important as major players like Amazon continue to hone-in on their own home-delivery grocery services.  

…But so are modern, in-store experiences 

With competitors like Amazon in the industry, focusing wholly on eCommerce could be a big mistake. Especially as so much sales success in grocery stores comes from customers browsing items and discovering new products and offers in person. 

One key element of success going forwards will be finding ways to encourage people back into stores, and that will require creating unforgettable customer experiences. From personalized offers to cashless checkouts, there are a host of innovations that are transforming physical retail for market-leading players – and they can provide a measurable advantage in what is becoming an increasingly competitive field. 

In short, now is the time to start reinventing the grocery store experience; the sooner the better to achieve a larger advantage over the competition. 

At the heart of all of this is integrated planning and analytics 

In today’s grocery market, there’s no choice but to embrace change. Central to all of these topics – whether it’s ensuring seamless logistics processes, elevating eCommerce, or providing unforgettable in-store experiences – is digital transformation.  

It’s important for retailers to approach transformation in a structured and integrated way – and that means making sure that data, planning information, financial processes, and strategic roadmaps are accessible to everyone that needs them from a standardized location.  

With an integrated approach to planning and a holistic digital transformation strategy, grocery retailers can prepare their businesses for the challenges of today – and those of tomorrow, too. 

To learn more about what these challenges are, and how to overcome them, download our latest grocery retail eBook.

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