Shoppers increasingly demand the convenience of fresh and center-store delivery, and their options for receiving rapid delivery are proliferating. To compete, grocers are investing more in the in-store experience, offering a greater variety of enticing prepared food items, expanding the range of produce, including more organic choices, and offering special events like cooking demonstrations. All of this is important – but increasingly, instead of putting you ahead of the competition, it’s table stakes just to hold on to your existing market share and basket size.
The real challenge lies in the pace of change continuing to accelerate. We’ve all seen how shopper preferences today change at the speed of social media. An item or category that scarcely registered on the public consciousness a month ago suddenly becomes all the rage, and if you haven’t stocked it as quickly as your online and brick-and-mortar competitors, your shoppers go elsewhere. Brand loyalty long ago flew out the door, and the race to remain relevant starts anew each and every day.
Focusing on the right changes
How can you know which moves you need to make to keep up with your shoppers’ fast-changing habits and preferences? How can you avoid costly and resource-consuming investment in the items that aren’t relevant to your business? Fortunately the proliferation of data means that shoppers freely give insights into their real-time demand signals, through their online and in-store behaviors. Competitive data and market data also exist in rich array and reflect real-time trend, elasticity and market shifts.
The key, of course, is being able to effectively comb through all that data, separate the true demand signals from the noise, and gain those insights quickly enough to be responsive in ways that are meaningful for your customers. We long ago passed the point where manual processes could keep pace with the speed of change and the quantities of data from multiple sources. Fortunately, technology innovations have given us the ability to do highly sophisticated analytics on even the most massive datasets in near real-time. Better yet, machine learning algorithms are finely tuned to sense changes in shopper behaviors, the competitive landscape or market conditions and adapt so that you stay ahead of the curve – and of the competition. Finally, software-as-a-service delivery models make the speed to deployment and time to ROI extremely rapid and ensure that you always have the latest and greatest features and capabilities at your fingertips.
What Sets Apart the Leaders from the Laggards?
Today’s grocery innovators are leading the market with increasingly automated pricing and promotion practices that resonate with their customers and ensure leadership in the race for relevance. One of my favorite examples is the story of Delhaize America, which has been using Revionics Price Optimization to act more strategically across its portfolio by market and category based on shopper customer needs. As their Director of Pricing Services noted, “We’re now implementing more shopper-centric pricing along with enforcing our rules and allowing our pricing strategies to come fully alive at the shelf.”
If you want a jolt of grocer executive adrenalin, I recommend this video interview of Lowes Foods CEO Tim Lowe with Progressive Grocer’s Editor-in-Chief Jim Dudlicek, where Tim describes his company’s strategic focus on center-store and applying Revionics technology for more dynamic pricing.
Where do we go from here?
The retail landscape for grocers has evolved and the pace of change is accelerating at an unprecedented rate. The grocery shopping experience is being redefined by the growing on-line presence of grocery, the non-loyal, well connected, and highly price sensitive shopper, and a competitive environment which is becoming more and more saturated and hostile every day. Add in the demand for complex grocery pickup and delivery services and it’s no wonder why grocers are struggling to remain relevant.
At Revionics, our mission is to help retailers deliver a data-driven omnichannel merchandising strategy. We work alongside retailers with complex business models to improve both their top-line revenue and gross margin percentage points. We’ve helped retailers such as Family Dollar, Holiday Stationstores, Delhaize America, BigY and Lowes Foods Stores achieve anywhere from 8-18x ROI. Contact us today to learn more.