Who could have predicted that the burning question grocers would face in 2020 would be whether or not they had enough TP, hand sanitizer, or facemasks stocked up to keep up with customer demand? COVID-19 has upended the grocery industry with 75% of consumers trying a new shopping behavior since its start according to McKinsey’s Consumer Pulse Survey.
Grocers that want to stay competitive will need to evolve to the changes in how, what, and where consumers buy. Harnessing the power of data analytics can give grocers the results they need to meet their strategic goals. Here are three issues grocers can tackle with analytics:
1. Are You Overstocked or Out of Stock?
Across the globe grocers experienced (and still are experiencing) extreme disruptions to their supply chains. With the demand for some products exceeding normal trends, while others sit on the shelf, the ability to quickly adapt was critical. In order to keep up with the demand, grocery stores have been providing feedback to category managers about product sales regarding seasonal/regional differences, and as stores continue to transition to the “new normal”, retailers now know their most valuable product mix.
Adopting the right analytics platform allows grocers to visualize stocks daily and automate recommendations to respond to meet demand. With the right technology grocers can consider both historical sales activity and forward-looking signals, such as sales forecasts or marketing plans to get a real-time “sensing” of demand. This can help them move stale inventory to locations where it will be best used and quickly understand reorder points.
Amway, one of the world’s largest direct selling companies, uses analytics technology to automate over 20 business processes, eliminating over 350 hours of data prep and giving Amway the ability to run these workflows daily to deliver up-to-date insights. Reducing the run time of inventory reports can open a whole world of possibilities for grocers from accurately seeing inventory by product to getting an alert when it’s time to buy.
2. Are You Meeting Customer Delivery Expectations?
Because of COVID-19, many grocery shoppers have started to order groceries online either through delivery or pickup services. The flood of orders has put a strain on grocers. A survey by Emeals found that of the respondents who ordered online, 28% saw delays or cancellations and 51% didn’t have their orders live up to the same-day or next-day fulfillment.
With analytics grocers can better fulfill customer delivery expectations and make sure they aren’t being overcharged for longer than necessary drive times. For example, by augmenting data and adding spatial coordinates grocers can visualize inventory locations, calculate drive times, and optimize routing times. With supply chain visibility grocers have a better overview of cost and distribution bottlenecks so are able to optimize how to fulfil customer delivery expectations while reducing carrier costs.
3. Pricing, Promotions, Product Launches, Profitability: Do You Have the Ps of Personalized Marketing Down?
Using social media, loyalty programs, and personalized marketing is key to changing consumer sentiment and behavior and staying relevant. They can help increase demand and profitability for products and services. Retailers that use personalized marketing have seen sales uplift of 10% to 30% and as much as 5% improvement in customer acquisition.
Analytics is pivotal when it comes to personalized marketing, allowing grocers to A/B test and validate promotional assumptions before launching a new incentive or price reduction. With the ability to verify customer sentiment and the potential impact on inventory, grocers can shape promotions to be more effective to manage inventory conditions such as overstock or stock-outs.
These are just three of the issues grocers can tackle with analytics, but there’s a whole market of questions waiting to be answered and optimized. What problems are you ready to conquer?