August, 2023
Grocery industry leaders understand how fiercely competitive a market can be. In the past decade, discounters and tech innovators have disrupted the industry, reshaping its landscape and forcing the large traditional grocers to rethink their business.
In combination with inflation and labor shortages, profit margins in food retail are chronically thin, hovering between 1-3%. In this strained market environment, food retailers also see customer expectations are quickly evolving, new competitors are emerging, and sustainability questions need answering. How are technologies enabling food retailers to maintain the competitive edge?
Intelligent technologies
Today’s consumers demand more than just products from their local supermarket; as we covered in a previous article they expect convenience, personalization, and sustainability. The growth of instant delivery services in other sectors, including food services, confirms the popularity of retailers that offer their customers instant gratification. Uber Eats has rapidly expanded to 6000 cities worldwide since launching 10 years ago - a staggering achievement! In food retail, another innovation inspired by evolving consumer expectations for convenience, personalisation and sustainability is the intelligent fridge.
Smarter inventory management
A new generation of fresh food fridges and retail units are being enhanced with digital technologies to enable automated inventory management and unmanned sales. Intelligent fridges are already being embraced by companies to offer their employees fresh and healthy food as an alternative to a traditional catering service, and by the hospitality sector as smart vending solutions.
Pilots have shown retailers with unmanned store concepts can add up to 15% extra sales per day with extended opening hours, and hospitality venues can sell up to 20% more during peak hours without the need of adding extra personnel.
[source: Husky Intelligent Fridges research]
Every product in the fridge has an RFID label, and when taken out it is automatically scanned and charged, and the transaction is logged by the inventory management system for fulfillment. It’s quick, easy, and with no sales personnel, highly efficient. The game changer for operators is the data generated, and the opportunity it offers leaders to optimize the fulfillment process, and to develop personalized customer experiences.
“New convenience concept retailers are arming fresh food fridges with RFID to automate inventory management and bring delicious fresh food to their customers in highly efficient unmanned business models.” — Tim Oldeman, Husky Intelligent Fridges
Success starts with data
In food retail the established industry leaders have a unique advantage, with direct oversight and influence over the entire food supply chain. They can be inspired by success stories like Chipotle restaurants who have shown how to maximize supply chain advantage. They can also leverage their vast pools of customer data to experiment with future food retail concepts.
The key to success is traceable products in the supply chain, and in the point of sale.
“...Nestlé China Supply Chain is leading with breakthrough digital capabilities, emerging with broader visibility for its inventories across the value chain, reducing waste, maximizing the satisfaction of our customers’ needs...” — Mr. Arik Mo, Head of Supply Chain for Ice Cream business, Nestlé Mainland China
With more item-level identification, retailers can not only create faster, more personalized shopping experiences, but also drive efficiency, reduce waste, and improve sustainability.
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.