Is there a path to profitable grocery delivery?
Through a special arrangement, presented here for discussion is a summary of a current article from the blog of Oliver Guy, senior director, industry solutions, Software AG. The article first appeared on Total Retail.
Despite dramatic growth in grocery deliveries due to the pandemic, grocers are not necessarily making higher profits.
The rapid acceleration in delivery demand has caused major delays, sold-out items and operational glitches — mostly stemming from siloed technology. At the same time, low-margin products and additional costs associated with hiring more delivery staff have eaten into profits. And online growth looks set to continue strengthening.
Addressing these challenges to drive operational efficiency requires becoming a truly connected retailer.
Below are three ways to move forward to a more connected, efficient and safe grocery experience:
- Liberate data: Multiple silos of data from customers, products and inventories create multiple perspectives that are confusing and limit efficiency. They must be connected, aligned and made available in real-time regardless of the data’s location. This liberates the data and allows for improved process flow and decision-making.
- Operationalize. Real-time access to data can then paint a picture of what is happening right now, giving actionable insight and the ability to automate decision-making — allowing retailers to respond to issues and opportunities. Combining real-time data from stores and supply chain operations, along with predictive models and emerging technologies like AI and IoT, can enable a truly connected store. Store associates can be proactively directed to where they are needed. Time-consuming tasks, such as inventory management or price and promotion execution, can be automated. Operationalizing data in this way can also improve visibility or shelf-level demand in the upstream supply chain, thus improving in-store availability.
- Align processes: Leading grocers are becoming more process-centric, seeking improvements in operational efficiency by undertaking time and motion studies of store operational tasks. This is a great start, but there’s so much more that can be done, like enabling task-centric data collection that can be used for process mining to drive continuous improvement.
Data silo elimination is key as it becomes the foundation to unlock the potential of emerging technologies like IoT and AI. Together these will drive insight, automation and improve decision-making that can redefine operational efficiency for retailers.
- Making Grocery Delivery Work – LinkedIn
- Operational Efficiency in the Grocery Industry is Vital as Demand for Delivery Accelerates – Total Retail
DISCUSSION QUESTIONS: How critical will eliminating data silos be to driving grocery delivery profitability? What unique challenges does the grocery model face in reducing silos?