Expert Column: How Grocers Can Successfully Drive Their Omni-channel Business

Omni-channel retailing is forcing a new working model for grocery merchandisers, especially as this evolving business model increasingly taxes inventory operations. By bringing in supplier partners and integrating a collaborative merchandising capability into the mix, retailers can gain visibility into enterprise merchandising processes, and more easily improve operational efficiencies that will drive profitability.

Omni-channel retailing is turning the tide on merchandisers, especially as new services are introduced. For example, Cincinnati-based Kroger Co. recenlty announced that it's testing a grocery pick-up service. Modeled after Harris Teeter's tried-and-true “click-and-collect” service, Kroger’s Liberty Township store in Cincinnati enables guests to order groceries online then pick up the order at the store. 

It's telling that a growing number of customers (19 percent) already rely on this service, according to New York City-based Accenture; and more (44 percent) plan to jump on board if their favorite retailers offer the service, according to a recent survey conducted by UPS, Atlanta. But more important is the impact this -- and omni-channel operations as a whole -- is having on merchandising teams. It is imperative for grocers to integrate inventory management systems online to give consumers visibility into product availability. Yet, merchandising teams are hard-pressed to maintain real-time inventory levels – not an easy task as items are being picked off the shelf not only by in-store shoppers, but also to fulfill online orders in a timely manner.  

While most grocery merchandising teams use some sort of merchandising analytics reporting systems, they are often siloed, and do not provide a comprehensive view of the business across all channels nor by product, promotions or vendor. These issues are also catalysts causing poorly executed promotions and ultimately out-of-stocks. The lack of granularity among these business factors keeps time-starved merchandisers behind the eight ball, and jeopardizes efficiency and profits. And when they finally can allocate resources to analyze disruptions and resolve issues, merchandisers are losing precious time needed to focus on what really matters: optimizing assortments that will build customer loyalty, creating business efficiencies, and differentiating their brand in a highly competitive marketplace.

By adopting a collaborative merchandising analytic application that integrates a omni-channel view, retailers and suppliers share a single view of the business, and a common set of analytics and performance measures that identify problems and measure success. This collaboration enables suppliers to align business objectives with retail partners – an effort that fosters more efficient and targeted daily communication. They also gain visibility into store-level performance, and accessibility to more powerful tools needed to drive better outcomes. 

Meanwhile, retailers gain a credible partner needed to solve these tedious, day-to-day problems, as well as recoup the internal resources needed to improve the shopper experience, deliver innovation into the category, and drive profitability.

With insight into inventory becoming a standard in delivering a top-notch customer experience, retailers are in a stronger position to stay abreast of inventory levels, and avoid damaging lost sales due to out-of-stocks. However, unprepared sales teams continue wasting valuable resources resolving day-to-day tactical inventory issues. By using a collaboration tool to centrally manage the flow of inventory, merchandisers are using accurate inventories to deliver top-notch omni-channel experiences needed to drive sales and margins.