June 1, 2016 | Written by: Asad Ahmed
Categorized: eCommerce & Merchandising
Share this post:
New, innovative business models are disrupting the traditional way the food retail industry conducts business. There is no fixed channel anymore. The consumer decides in which channel to buy. Newer options such as Click and Collect, Buy in Store and Deliver, Online Service Delivery, and the increasing reliance on mobile devices to obtain shopping information, are creating a paradigm shift in the industry which has always focused on physical stores for their sales. A leading grocer based out of North America already has 2-5 % of its sales from online shopping. And this number is growing. Retailers have to make use of digital technologies to be competitive and capture new customers in an increasingly competitive and diversified consumer market.
Let’s look at the some of the trends & challenges that food retailers are facing today.
Consumers have started to expect a greater amount of personalization. As consumers are evolving, they expect retailers to catch up with them and cater to their personal needs. Retailers must harness the right set of information collected from a variety of data sources to understand the shopper better. How is the shopper behaving? What percentage of products does he/she buy online versus buying at a store, and which products tend to be purchased in which channel? How has his/her shopping pattern changed over the years? Some of the important questions to be considered are:
- Are there any particular brands to which they are loyal?
- How do customers respond to different types of promotions?
- What products can be paired and promoted together?
- Are there specific products that consumers tend to buy online?
- What points have to be considered for shelf rationalization?
IBM Shopper Insights can help retailers and vendors answer questions like the ones just mentioned to better understand shoppers’ habits and preferences. These data-driven insights will help retailers create personalized customer experiences, and ultimately enhance the retailer’s revenue.
Customers are King, but price matters even more today
With continually evolving technology providing demanding consumers with multiple ways to research, select, and shop for the best deals, creating the right pricing strategy still remains a challenge for many retailers. For a long time now retailers have been relying on spreadsheets and homegrown systems to manage their pricing, but these cumbersome and time-intensive methodologies don’t facilitate a quick response to the fast-changing competitive environment. With an increasing number of nimble competitors and consumers who are more price sensitive than ever before, any misstep can hurt profitability and customer loyalty.
- Manage the domino effect of pricing strategically—built on a strict discipline of forecasting, tracking, and analyzing
- Automate pricing processes: A price adjustment/maintenance process that helps to react quickly to changes in a quick, targeted fashion without re-pricing the entire category is critical.
- Be quick to develop promotions based on emerging trends
Agile Pricing solutions from IBM can help retailers efficiently manage and execute prices for every product in every location, helping to drive revenue and margin, and improve customer loyalty.
Another big challenge facing retailers is efficiently managing relationships with vendors and suppliers. Without a robust mechanism to track the deals/contracts with your vendors, you could be lost in spreadsheets manually tracking every deal and missing insights from your promotional history to build more effective, profitable promotions. IBM Deal Management enables retailers to:
- Improve the process of managing vendor funded promotions with collaborative online planning, reducing the retailer’s cost of managing a deal by 80 %
- Eliminate errors and inaccuracies, decreasing time spent by your internal audit teams by as much as 65 % and reducing external fees from post-audit processes by up to 47 %
- Gain visibility and control in support of SOX compliance
- Develop promotions that better drive category performance, improving accuracy around forecasts and enabling retailers and vendors to create win-win trade plans.
To learn more about how each of these three solutions can help you successfully address the the latest trends in the quickly changing food retailing marketplace, please join us at FMI Connect 2016 in Chicago at booth #1132.