Mass disruption in retail is sweeping headlines, and we all know why: the rise of mobile, greater access to data, transparency due to the internet and so on. But what about grocery? Grocery shopping still commands a third of our discretionary spending and remains a key part of our budget and time, but the consumer’s experience is changing with the rise of digitization. Here are three ways digital is impacting not only the grocery industry, but the food supply chain as well.
The Rise Of Digital and The Demand For Data
Consumers expect more data, demanding more information while making their buying decisions. Rather than blindly trusting what big brands say, they have been trained to research what they are purchasing. Not only are consumers researching the brand, but they now also expect access to more knowledge of the product than ever before. Simple labels with calorie count and ingredients will not suffice; buyers want to know where it was sourced, how it was transported and if it meets certain sustainability requirements, to name a few. This is where savvy grocers and food manufacturers will latch onto digital to provide these details to their consumers.
Connecting to Consumers
More savvy consumers translate to greater opportunities for grocers to connect with their customers. In the Digital Age, grocers and those in the food supply chain now have an opportunity to better connect, better understand and become more intimate with their end customers.
Could the likes of Campbell’s Soup or Kraft Foods create smarter labels that allow an interaction to happen with their consumers? Yes, just look at the smart tags Johnny Walker added to its Blue Label whiskeys. These bottles are empowered to better communicate with the store systems, while providing the consumer with an additional digital layer of communication. In addition, Diageo—the company that owns Johnny Walker—can send personalized messages to the purchaser of the Blue Label spirit.
Soon, consumers could receive a digital message from Kraft Foods about specific recipes associated with a purchase, or dairy producers such as HP Hood or Land O’Lakes could add smart labels that communicate with a consumer’s smartphone, warning when a product will go bad.
The Food Supply Chain Gets Smarter
Greater digitization of the food supply chain will ensure greater safety, traceability and overall efficiency. Like with many supply chains, increased used of added technology also leads to greater visibility, which translates to better management and a more efficient supply chain.
The challenge with the food supply chain, however, is that it is moving many perishable items that react to outside forces such as weather, vibration and handling. Grocers and their suppliers need to lean on increased digitization to better regulate and handle the fallout of such events. For example, a banana being harvested in Ecuador will embark on a long journey to the shelf of Kroger in Decatur, Georgia. Throughout this journey, it is handled, placed in containers, shipped over the ocean, sat on docks, routed via truck, and stored in aging rooms until it finally ends up on the store’s shelf. The trick is for that banana to arrive on the store shelf at the optimal time. Imagine if this process were closely tied together via digital assets, so that Chiquita could ensure the maximum number of bananas reach the store shelf at the right time.
While technology is not a magic bullet, it is no surprise that it has impacted all forms of business. When it comes to the food and the grocery business, it stands to make this supply chain more efficient but, most importantly, safer.
Guy Courtin is the vice president of industry and strategy at Infor. He has more than 15 years' experience in the technology arena, specifically in supply chain. He is responsible for thought leadership and strategy for Infor Retail’s Industry and Solution team.