Today’s grocers face a variety of trends forcing them to think differently about their operations. Consumer expectations of ecommerce delivery, population urbanization and demands for fresh, healthier products are on the rise. These trends bring to the surface new challenges regarding technology and shelf life that have many retailers scrambling to maintain healthy margins. By evolving with the transportation ecosystem, retailers can solve these challenges and improve their businesses.
1. Understanding the new face of retail
As people’s food-buying and consumption preferences evolve, transportation remains an integral part of the process. Desire for faster purchase cycles, more transparency into the sustainability and health content of food, and ethical considerations span the entire supply chain, from sourcing materials to manufacturing and, importantly, delivery. Changes in each of these sections of the product lifecycle have manifested in recent years, and the need for a complete loop will continue to bleed over into transportation.
It’s essential to be able to see and understand data and share it across the supply chain. Marketing, demand planners and transportation professionals need to be more integrated. Data around promotions and sales forecasts, as well as the ebbs and flows of product demand, can have an impact throughout the supply chain.
Although FMI – The Food Industry Association forecasts that online food and beverage sales will reach $1 billion this year, brick-and-mortar stores will always remain necessary. There will always be “last-minute” products that consumers need to pick up in person, and storage space – specifically cold storage – is an integral part of ecommerce delivery that brick-and mortar-shops can provide. Recognizing the need for an omnichannel approach that optimizes operations between these two realities will keep grocery shippers on the leading edge of change.
2. Forecasting accurately to manage transportation
Demand forecasting, instead of just inventory replenishment, is becoming more sophisticated. While still managing suppliers at the relationship level, grocers also need to manage product type demand (such as fresh versus canned). Because of differences in shelf life and replenishment schedules, transportation management can be very different on a product-to-product basis.
Trends in seasonality, consumer sentiment and anticipating fluctuations in individual products will create a more streamlined, lean and agile grocery supply chain. Ultimately, the entire supply chain needs to be more integrated and specific to ensure healthy margins.
3. Working together
Consumer data helps us understand how transportation and the supply chain can deliver on the changes consumers are expecting. In the case of ecommerce, staying up to date on startup technologies and ways to partner with providers will help retailers meet consumer demand and stay relevant without losing margin.
Noticing spikes in unplanned brokerage costs indicates that freight is moving in a different pattern than expected. In a business like grocery, where margins are already small, it’s essential to eliminate unnecessary brokerage fees. Instead, a retailer should plan with its carriers by sharing all of the appropriate data with one another to ensure that deliveries stay to plan. Also, retailers should be prepared to make changes to their strategy when needed.
The key to evolution
Integration across all supply chain functions is paramount to being successful in this new wave of consumer trends in grocery. Sharing data and creating a common language to do so throughout the supply chain will help accomplish this.
Today’s data-intensive world poses both an opportunity and a challenge to the shipping community, and specifically to grocers. Grocery shippers that use data to align with carriers, analyze consumer trends and integrate the full supply chain will see the most notable improvements to their business throughout 2020.