When was the last time you tweeted a picture of fresh strawberries or a pastry you ordered at a cafe? Whether you are an avid social media user or not, “eat & tweet” is becoming a pop phenomenon. So how can retailers capitalize on these digital trends?
Across all industries, consumers are searching for a memorable experience – but most are not finding it. With the increased connectivity, there is an exponential increase in the number of interactions a consumer can have with a brand. Retailers are challenged to meet these heightened expectations while maintaining efficient and high-quality processes.
One place to look for inspiration is the grocery industry. Here, razor-thin margins and increasing competition have fueled an accelerated pace toward the creation of a digital core, giving grocers a complete view of the customer and landscape.
Being able to transform into a digitally driven, customer-centric operation will help retailers deliver the personalized experiences that consumers demand – the type they are already starting to see in the grocery segment.
Expansion through Digital Investments
Grocers have historically expanded through the development of new stores and locations, as well as incremental improvements to operational systems over time. But this strategy will no longer support continued growth. It’s just not enough. Today, smart grocers are expanding by investing in innovative and memorable customer experiences, driven by technology.
Brookshire Grocery Company, based in Texas with 150 stores in the Southwest United States, recently completed phase one of a three-phase project designed to modernize the company’s stores. They were looking for expanded visibility to better understand their customer’s habits and preferences. By viewing shopper behavior and store data in real time, companies like Brookshire can respond to consumer needs, and proactively adjust offerings and inventories to meet demand, thereby increasing customer loyalty and satisfaction.
Beyond increasing memorable customer experiences and loyalty, growth can occur by simply modernizing traditional business processes. For example, in-store stock replenishment affects all sellers from grocery, fashion to convenience. However, inefficiencies in merchandise planning can threaten profitability and growth by undermining customer satisfaction and impacting sales.
Updating merchandise planning based on data-driven sales forecasts helped ALDI Nord’s associates capture consumer insights for optimal stock and merchandise-replenishment. Through predictive analytics, ALDI Nord’s processes were digitally aligned for greater visibility, and informed, strategic decision-making. A modern, digital company like this can increase sales and optimize business planning across the board by using new tools.
Harnessing Customer Insights
With a predicted 75 billion connected devices by 2020, companies of all sizes will need a clear strategy for leveraging the Internet of Things and all the data that comes with it. A recent survey from Penton Media noted that 79 percent of retailers and grocers surveyed agree that big data is important for their business. However, do they have the tools in place to leverage the data for actual customer insights?
For many companies, the answer is no. From the same study, 39 percent of respondents stated they were uncertain about their company’s ability to analyze and respond to consumer insights. Companies cited a lack of qualified personnel and a perceived fear of time-consuming changes in order to create the ideal customer experience.
But grocers have jumped into big data head first – prompted by the enormous potential value to the business. Grocers are using customer behavior and transaction data to analyze, in real time, promotions, staffing and merchandising decisions, among other operational functions.
Brookshire utilizes data insights to drive personalized promotions to the company’s mobile app, which are automatically loaded to shoppers’ loyalty cards. By utilizing customer history and preference data, Brookshire creates more convenient and personalized shopping experiences. Their goal is to know each individual customer and communicate with them in the store rather than online.
Building a Digital Core
Creating the ideal customer experience goes beyond offering online promotions or directing shoppers to a website. While there is significant data to show a more mobile trend with consumers, data insights can also help drive shoppers to brick-and-mortar operations for a more memorable in-person experience.
Debate among industry leaders often focuses on the future of brick-and-mortar. For the majority of grocers, their entire business model is based on physical stores. To overcome the changing consumer landscape, grocers are taking advantage of mobile technology to bring newer customers into their physical stores.
While trends for mobile and online purchasing continue to grow and evolve, companies that understand customers’ preferences can take charge of their stores by utilizing consumer insights. All of these changes are based upon a digital core to better plan, predict and adapt to growing customer needs and preferences.
Benefits of a digital business core do not stop at just improving the customer experience. Lidl, a major European grocery chain expanding in the United States, found that by investing in a standard process to analyze live inventory data, it could focus on expanding the business rather than worrying about merchandise planning. They can make store-level decisions through a visible, sales forecasting platform, which speeds up merchandising decisions and removes some of the daily burden.
A digital core also provides companies with the data and insights to react to shopping patterns and align the entire enterprise from floor associates to inventory planning. Creating intelligent and strategic business decisions through the use of data helps grocers to expand and continually provide memorable shopping experiences.
All of these innovations have led to a dramatic digital transformation for grocers. Implementing standardized systems for merchandise management, sales forecasting and customer insights lead to a seamless process for increased performance and profits for stores of all sizes. Retailers can learn from the recent innovations from these companies to not only invest but to enhance their customers’ experiences and overall business plan through a digital transformation.
Lori Mitchell-Keller is Global General Manager, Consumer Industries at SAP.