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Why Grocers are Turning to Technology to Achieve Revenue Growth Despite Industry Disruption
Find out why grocers are using technology to accelerate revenue growth, minimize operational costs, and attract more customers.
The grocery marketplace has undergone tremendous change over the past decade, and the COVID-19 pandemic only accelerated it. Yet, despite the challenges the retail industry faced at the peak of the pandemic, the grocery marketplace came out strong, and retailers seem to have adapted quite well. The scenes of empty shelves, shortages of essential items, and fear-induced hoarding of toilet paper are tales of the past.
But how did the retail market adapt? What defined the brief disruption of the marketplace, and how did the grocers that survived the disruption recover?
No one was prepared for the disruption caused by the pandemic. The labor shortage, mainly due to lockdowns and supply chain issues resulting from disrupted transportation networks, caught everyone off guard.
Grocery Marketplace Post-Pandemic Opportunities
However, behind every dark cloud is a silver lining. In the case of the global retail market, the pandemic accelerated the adoption of new technologies and solutions to help solve basic business challenges. In the end, grocers that adapted and invested in new ways of doing business have seen a rise in their revenues and growth of their businesses.
As the world gets used to the new normal with the pandemic, the marketplace may never return to what it was. As a result, many retailers are exploring new avenues to improve their workflows and implementing new inventory management systems to deal with unforeseen challenges. Innovation will continue to remain at the center of the future of the retail industry— and specifically, in retail grocery.
What Challenges Do Grocers Continue to Face Today?
New consumer behavior and retail industry trends have completely disrupted the grocery marketplace. Businesses in the industry have no choice but to innovate, evolve, and transform to remain competitive. In general, the grocery marketplace faces a couple of major challenges today:
Research by the US Chamber of Commerce in November of 2021 revealed that over 53% of retail workers who lost their jobs during the pandemic were not keen to get their old jobs back. Consequently, about 74% of grocers report that the tight labor market is a major obstacle, according to a report published on Progressive Grocer.
It now appears that the labor shortage that was driven by the pandemic is a permanent problem for grocers. Groceries that survived the pandemic and the great resignation are turning to technology to ease the shortage of human resources. Their strategies include:
- Streamlining shopping procedures.
- Minimizing time-wasting errors and reworks.
- Integrating data-driven staff and shift management.
Supply Chain Disruption
At the start of the pandemic, the disruption of supply chains dealt a big blow to grocers and presented a challenge even the consumers did not see coming— delays in shipments, port shutdowns, and suspensions of cargo shipments.
Many retailers were left with empty shelves, and panicking consumers hoarding the few items left only made matters worse. Even today, the supply chain disruption of 2020 is still being felt. Grocers have had to introduce new measures and adopt new supply chain technology tools that give them increased visibility as they work to try to restore normalcy.
New Guidelines and Consumer Habits
The pandemic permanently influenced how consumers shop for food— especially groceries. For instance, more shoppers have made it a habit to choose frozen foods to make fewer trips to the store. In addition, the overall number of shoppers placing their orders online has risen, and stores have had to adjust to the shift in demand patterns to meet new consumer needs..
After decades of predictable shopping habits, consumers are now faced with fewer choices of their favorite products and brands, forcing stores to reassess their strategies. These new habits, combined with new health and sanitary regulations introduced to curb the spread of the COVID-19 virus, have become a big burden to retailers.
Costly Transition to New Technologies
While it would have been inevitable in the long run, the transition to new shopping technologies forced on grocers has been very sudden and costly. In the past, acquisitions and mergers have traditionally achieved growth and technology change in their marketplace. In the last two years, retailers have had to invest more in solving challenges despite shortages, a stagnant economy, shoppers with even more expectations, and increased health and sanitary regulations.
Grocers have experimented with online ordering, in-store automation, and checkout-free systems. Some have invested in better stock management and consignment software to minimize shrink and adapt to current consumer habits.
Digital Grocery Shopping
The convenience and personalized online grocery shopping experience have always appealed to both the grocers and consumers. However, the pandemic forced both the stores and the consumers to quickly embrace this new way to shop. According to a report by the Supermarket News, 46% more shoppers now buy their groceries online compared to two years ago. As many as 40% more shoppers use online pickup services, while 11% shop for groceries online and pick in person.
Retail grocers are quickly adapting to the new demands of an increasingly tech-savvy customer base. For instance, according to Progressive Grocer, to meet the new customer attitudes, as many as 21% of the grocers are currently implementing new e-commerce platforms. In addition, another 15% have plans to enhance their digital platforms over the next year, while 21% are allocating more capital expenditures on digital marketing.
The Future of Grocers
Customers looking for ease of use, efficiency, and convenience have flocked to the new digitalway to shop. The use of shopping apps, online delivery services, the implementation of self checkouts, and curbside pickups have become the new way to shop for groceries.
The new generation of shoppers are digitally savvy and have high expectations as far as shopping experiences go. Grocers are under high pressure to adapt to the new demands if they are to remain a part of the projected $1.9 trillion global grocery market by 2023. One thing is clear, though: digital grocery shopping is here to stay.
For retailers that have carefully navigated the pandemic and the great resignation, there are still a number of ways to boost your business's revenue, minimize operational costs, and attract more customers. The use of digital stock management and invoicing solutions are two solutions that are at the top of the list for any retailer. Visit iControl to request a demo of state-of-the-art digital solutions that your business needs to improve its bottom line and outdo the competition.