Every industry hits a tipping point where everything seems to have become standstill for a long time, and all of a sudden forces of change build-up, where everything shifts at once. The grocery industry is experiencing the same shift these days. With the advent of digital transformation, several brick and mortar grocers are seen adopting artificial intelligence, machine learning, to streamline stocking their stores, pricing their products, and being competitive with online retailers like Amazon.
Speaking of which, the company recently announced its acquisition of the Whole Foods grocery chain, but the basic trajectory was already long underway.
In the present scenario, the grocery sector is considered as a technology hotbed. From farm to fork, everything seems to have taken off in a big way- all thanks to the emerging digital assistance. The fact is data has become the lifeblood of every business where it is collected and analyzed to create a more intelligent, profitable, and sustainable business and a better experience for the end customer. Unlike a conventional grocery ecosystem, one can easily eliminate silos of information and enable business processes to evolve and adapt to current conditions quickly. In addition to this, it also provides near-instant insights into the profitability of existing and new processes — long before they reach enough scale to appear on traditional reporting systems.
Now have you ever wondered what a supermarket might look like in 2050? Imagine you are walking through a fully supplied and functional forward-looking grocery store that features around 1,500- 2500 products, powered up with over 250 or 350 Kinect devices and the latest digital technology. Interesting isn’t it!
“According to Gabriele Tubertini, CIO of Coop Italia, Supermarkets will still physically exist in 2050, but they will be transformed into places where people will go not only to shop but also to meet other people and find relevant information about the high-quality products theyâ€™re looking for.”
Unfortunately, not all retailers are able to catch up with the accelerating customer demand for online access. Due to a lack of awareness or accessibility, these retailers end up losing customers in no time. As a result, a difficult conundrum for the average brick-and-mortar retailer regarding the basic identity of the enterprise. So in such a situation how can they obtain the competencies and talent necessary to become something they arenâ€™t, and almost immediately compete at an extremely high level?
Table of Contents
Here the digital transformation comes into play!
1. Improved customer experience
With the help of new digital platforms, organizations, retailers, can gain more significant insights into their customer needs. Several social media channels are seen providing relevant demographic, geographic, behavioral insights into what their customers like and donâ€™t like. In addition to this, brands are able to communicate directly to their customers to resolve disputes and build lasting relationships.
Digital initiatives are also transforming customer touchpoints. I mean think of fast-casual restaurants that are seen utilizing online ordering through an online portal or phone app. Customers can easily go to the location and pick up their orders. They are no longer required even to have a word with a single employee. This leads to a severe increase in sales due to convenience and shorter wait-times in line.
2. Operational Process Transformation
Digitalization decreases the amount of time and resources needed to maintain operations and to innovate. It may quite interest you to know that several accounting departments have implemented digitalized workflows for employees to self-service purchase order requests and invoice processing. This has a streamlined approach to billing that saves valuable employee time and improves the accuracy of record-keeping.
Several companies are seen enabling workers to make the most of digital tools which improve collaboration, similarly, decreasing the need to be in the same physical location. Tools such as WebEx is used for screen sharing and file collaboration worldwide. Whereas, Intranet like SharePoint creates a central repository for business files and communication. Another interesting tool is Slack that has around 8 million active users as of April 2018 and provides a simple way to create collaborative groups online within an organization.
With the automation of data, decision-makers can also streamline their operations. Starting from location management systems to track deliveries, these IoT sensors can also be used for inventory tracking in warehouses and store locations as well.
3. Transformed business models
As I said before, several companies are seen transforming their traditional businesses- all thanks to emerging digital modifications. In a few years down the line, you will see grocery markets allowing customers to order groceries through an app or online (any medium of their choice) and then pick up in the store or deliver at their doorstep. For instance, Carvana is innovating the car marketplace by offering customers the delivery of a car purchased online instead of at a dealership. Customers can return the vehicle at no cost if theyâ€™re not satisfied with the purchase.
Challenges of Digital transformation
There is no doubt in the fact that digital services have indeed come as a boom, but they even have a fair share of controversies as well. Letâ€™s find out what they are?
1. Resistance to change
Any change whether itâ€™s major or minor is not easy to adopt. Digital transformation is something that requires a change at the fundamental level to drive innovation. Unfortunately, several organizations are seen resisting such change because it disrupts the way things have always been. So those workers who have been working for an extended period might find it challenging to pursue digitalization. And god forbid if a large-scale project fails, the blame will be laid on them.
2. Lack of vision
There are times when we are unable to see the path to disruption in the market. Itâ€™s the time when a company is entirely seen focusing on itself and thinking of everything that worked in the past. Blockbuster had over 9,000 stores worldwide but filed for bankruptcy in 2010 because it failed to see customer demand for streaming services like Netflix.
3. Focus on process optimization vs. business model innovation
Of course, it is crucial to consider process improvement but having an appropriate business model innovation shouldnâ€™t be an afterthought. Several factors such as a lack of attention on competitors or changing customer needs will blindside companies. This has happened with Blockbuster.
In a nutshell,
With the major shift taking place in the digital landscape, the grocery landscape has to encounter change. However, one should not look down on this transformation as moving away from the way things are at this moment. Instead, it should be approached as moving closer to what the customer wantsâ€¦ today and in the future.
Featured image source: Freepik