The COVID-19 pandemic has been a major disrupter across the food industry. In some cases, such as restaurants, the disruption has had a negative impact on their bricks-and-mortar locations as well as their supply chain partners. But the grocery segment is a different story. Both online and in-store sales have seen a significant increase. This rapid surge has shone a spotlight on major challenges as consumers shift their grocery shopping to online platforms. Some of challenges that the pandemic has exacerbated are:
In this white paper, we’ll discuss the state of the grocery industry and explore how RFID addresses these challenges, including:
Ways in which grocers are using RFID to reimagine their supply chain operations, to offer better — and more socially distanced — consumer experiences while gaining unprecedented inventory visibility to bolster their e-commerce platforms.
How RFID bridges the physical and the digital world, enabling retailers to have a more connected and agile supply chain, improving traceability and transparency.
Explore insights into the latest innovations making RFID a compelling next-gen technology for a post-COVID-19 landscape.
Experts say this number will likely remain at the higher level because many customers have downloaded apps, tried new services, and discovered their conveniences. A telling historical example of this effect can be found in the 2015 MERS outbreak in South Korea. During this outbreak, out of all product categories, food and drink recorded the highest rate of e-commerce sales growth at 30%, more than double the rate of growth of the previous year.
Today, the country has one of the highest rates of online grocery penetration in the world. 1
A survey by strategic advisory firm Brick Meets Clicks shows online grocery purchases continued to grow in May, with demand spurred by the COVID-19 crisis lifting sales 24% month-over-month to $6.6 billion. These gains further reflected increases in both online grocery order and household penetration. 2
The numbers are expected to stay at this level or increase, suggesting there is even more opportunity for retail growth. According to the same Brick Meets Clicks survey, 26% of the households that had not bought groceries online in the last 30 days said that they were extremely or very likely to try online shopping in the next three months. When asked how likely they were to continue using a specific online grocery service after COVID-19, 43% of the survey respondents indicated that they’re either extremely or very likely to do so. 3
To stay relevant, grocers need a new strategy and better processes to tighten up their supply chain, track their in-store inventory, and delight their customers to ensure continued loyalty.
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Source: 1. PASSPORT - THE GLOBAL STATE OF ONLINE GROCERY IN 2020, JUNE 2020
Source: 2. SUPERMARKET NEWS
Source: 3. PROGRESSIVE GROCER
By adding a unique identifier and online connectivity to every item in any inventory, Avery Dennison RFID-enabled intelligent labels let grocers dramatically improve inventory management, efficiency, traceability, sustainability, and customer satisfaction.
Our food solutions enable inventory optimized for ustomer demand, greater product transparency, faster and more precise traceability during recalls, and the recapture of profits currently lost to waste.
RFID tagging delivers huge, easily demonstrable benefits for grocers. It can enable frictionless experiences like cashierless or frictionless checkout for shoppers. It also provides atomic levels of visibility into your inventory and supply chain, so you know exactly what you have, what’s coming, and where it all is — no more gaps, dark spots, or question marks.
RFID tagging also supplies the who, what and when of a product’s provenance with certainty, so that every product can be digitally documented by blockchain or other means, enabling you and your customers to see the product’s whole, true-life story with a click.
RFID tagging also enables you to waste less, sell more, and helps ensure freshness and shelf life. It conjures new possibilities for frictionless customer encounters while letting you allocate labor more wisely. In all, RFID tagging sits beautifully at the intersection of what customers want and what grocers need at this pivotal moment in the industry.
Inventory management at center store or fresh continues to be a high touchpoint area and a significant source of labor spend for food retailers. By using RFID at item level, grocers stand to gain increased inventory accuracy while eliminating or reallocating valuable labor away from inventory tasks. For online ordering, RFID can assure the right product is in the right place at the right time.
By encoding the expiration date directly in the RFID label, retailers can quickly scan hundreds of items in a matter of seconds and know the number of products on the floor and remaining shelf life for each individual item allowing for improved expiration management, production planning, and predictive analytics.
SUPPLY CHAIN
By adding RFID via in-line highspeed production processes at manufacturing, food retailers can leverage unique digital identities, including lot information, to better track and trace products throughout the supply chain.
This can be done at the item, case, or pallet level. RFID can also be used to automate information into blockchain systems.
FOOD SAFETY
Every day customers put their confidence in retailers and brands that they know and trust. They expect that the products on store shelves are fresh and safe to eat. When a recall happens, it sends shockwaves through the entire supply chain from source to consumer. Not only is it a safety concern, but it’s a costly logistical nightmare that shakes the confidence that a retailer has built.
As soon as a recall is issued, “the clock starts ticking” and all focus turns to how quickly a retailer can respond. All companies have a recall response plan, but identifying, isolating, and disposing of affected products can be a manual, laborintensive, complex process. Studies have shown that locating affected products can take days, weeks, and even months. With every second that goes by the risk increases that a consumer may be impacted by a recalled product.
By enabling item-level traceability with RFID and blockchain, the timeframe to respond to recall can be significantly shortened from days and weeks to a matter of seconds.
Targeted recall approach = reduction in food waste
Order of magnitudes faster recall responses = protection of public health
Labor savings: eliminates the need for an associate to handle every item, every time
Improved visibility throughout the entire supply chain
Supply chain agility
Enabling technology for a more digitized supply chain
Consumers want total transparency in their food supply. They want to know who made it, how it was processed, and where it comes from, all the way back to the source. Food Safety Magazine offered some insight into the importance to consumers of traceability throughout the supply chain:
- “A recent study by Deloitte found that over the last two years, more than 60% of consumers increased spending on the fresh food category. Other research from the Center for Food Integrity found that 65% of consumers want to know more about where their food comes from.
- As consumers continue to diversify their diets, it will be increasingly important for food brands and retailers to provide trustworthy information, which leads to peace of mind. By prioritizing food traceability, the industry can work together to close the gap between consumer demand for fresh, healthy food and the industry’s ability to meet that demand with assurance of safety.“ 4
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Source: 4. FOOD SAFETY MAGAZINE
Frictionless grocery shopping isn’t “the future” anymore. It’s happening right now, as grocers, convenience stores, and upstart brands deploy it in the fight for stomach share, in a world where COVID-19 has suddenly made digitally-enabled shopping not just a convenience, but a life-saver. Of all frictionless solutions, RFID provides a less time-consuming, more socially distanced experience for shoppers while also transforming the back end of your business, in a way that’s easier and more costeffective to deploy.
Because, more than ever, consumers are demanding grocery shopping that is fast, painless, and light on unnecessary interaction. By adding RFID at the item-level, grocery retailers can enable new seamless consumer experiences and even extend their reach beyond the store as in the case of intelligent vending machines.
Save time and hassle for shoppers = customer loyalty and potential for increased sales
Enable new channels for fresh food sales, i.e. smart vending at airports, college campuses, corporate centers, etc.
Labor reduction due to cashierless models
When compared to vision and scan & go models, RFID provides friction-free experience, from start to finish while also being easier to deploy and more cost-effective
Learn more in: The Future of Frictionless Food - Deep Dive
Early versions of RFID were limited by cost, incompatible packaging materials, and the computing technology of the time. Today, the cost of RFID tags has decreased dramatically. And packaging limitations have been overcome.
It’s now possible to tag every item in a store — including metals, liquids and microwavables — due in part to Avery Dennison’s innovations in RFID tags. Also, improved tags and readers have dramatically enhanced accuracy and read rates. And mobile devices have put the power of Intelligent Labels into the hands of any employee and any consumer.
Finally, it’s possible to add RFID tags to items containing metals and liquids. Our on-metal inlays make it possible to extend the benefits of RFID to cosmetics, fragrances, lotions, housewares and items in metal foil packaging. Get unprecedented inventory visibility down to the last item, in stores and across your supply chain.
Add the awesome advantages of RFID to microwavable packages. Our breakthrough microwave resistant inlays, AD-251r6-P eliminate the fire risk from microwaving frozen or chilled RFID-labeled foods, while still providing highly accurate read rates and item tracking. AD-251r6-P tags deliver all the benefits of RFID, including improved inventory management, lower labor costs, and reduced waste.
New market challenges are driving groceries to find better, more productive ways to:
All of this can be achieved by creating a connected supply chain leveraging RFID technology. Avery Dennison’s integrated global RFID approach is proven to increase inventory accuracy, improve supply chain agility, and enhance visibility across all channels.
When you choose Avery Dennison RFID, you get field-proven inlay products, advanced research and testing capabilities, experienced engineering and technical resources, and, most importantly, a partner with a deep understanding of what it takes to make your application successful.
Are you interested in getting in touch with our team of helpful experts?
Find out how RFID bridges the physical and the digital, enabling food retailers to have a more connected, agile supply chain. In this white paper, we discuss the state of the grocery industry and explore how RFID addresses key challenges such as improving supply-chain operations and inventory management, enabling more socially distanced consumer experiences, while providing full transparency end-to-end.
By using Avery Dennison WaveSafe™ labels, Sodexo was able to maintain a convenient, cashless experience and ensure round-the-clock customer safety while still reaping the benefits of RFID technology.
A frictionless grocery shopping isn’t “the future” anymore. It’s happening right now, as grocers, convenience stores, and upstart brands deploy it in the fight for stomach share. In this report, we uncover true insights about the latest changes in the food industry – in a world where COVID-19 has suddenly made digitally enabled shopping not just a convenience, but a lifesaver.