Navigating the Challenges: Overhauling ERP Systems in the Grocery Retail Industry
The grocery industry faces various challenges today, even more so in the wake of the Covid pandemic. Intense competition, changing customer preferences, online retailers and many more issues require retailers to be innovative and adaptive to stay competitive and profitable.
Let’s look at some of the challenges most grocer retailers are faced with today:
- Intense competition – with a highly competitive playing field with multiple players vying for market share, the grocery arena is faced with price wars, pressure on profit margins and an ever-changing game of competitors.
- Consumer preferences – constantly keeping a pulse on what consumers want is a full-time job. Trends change seemingly by the day, so making sure a grocer is in touch with the needs of customers, from the latest product highlighted on TikTok to the desire for eco-sustainability and healthy food options, retailers need to offer these products to stay competitive.
- Strong online presence – with the growth of online retailers, (you know who they are), the competition in the online space is staggering. Grocers need to offer convenience and competitive prices while adapting their business models to provide these services to compete.
- Supply Chain disruptions – the pandemic highlighted the vulnerability and the impact of supply chain disruptions in the grocery retail industry. Being prepared for unexpected disruptions and having contingency plans in place will be the norm, not the exception.
- Shrinkage: something that is unfortunately becoming more prevalent these days and that is a significant challenge for retailers is theft. Spoilage and other losses are also part of this but mainly, investing in loss prevention strategies is now key for the grocer.
Grocery Digital Transformation: Overcoming challenges during an ERP migration
These are some of the major challenges affecting the grocery industry, incentivizing merchants more than ever to turn cost centers into profit centers. A closer look at grocers' operational back-ends reveals that outdated, monolithic systems are often holding them back from moving ahead in addressing some of these challenges.
An upgraded, modern ERP for the grocery industry is the foundation on which grocery retailers can build a digital core that will drive business innovation. However, a Grocery ERP migration is no easy task, with very real issues that arise throughout the project lifecycle. Here's a look at a few specific roadblocks that invariably pop up and how they can be solved.
- Business Transformation needs to be done differently and adapting proven grocery industry practices beforehand will begin to smooth the path to transformation. And how effectively can a business transformation be executed given all of the moving parts that are integral to a grocery business? If there are one-off transactions/methods taking place that are off the radar, these exceptions need to be identified and properly categorized so that when data migration takes place, they are accounted for.
- Data Migration – A well-defined plan is crucial for a successful data migration. Retailers must determine which data needs to be sorted and moved, including products, vendors, customers, transactional data, point-of-sale information, and invoices. These specific data types must be highlighted and accurately loaded into the new platform.
- Integration – ERP systems such as SAP require accurate and reliable data. Any discrepancies or inconsistencies must be addressed for the system to function optimally. Investing effort into data cleansing is essential for project success. Furthermore, ensuring that your Digital-Core is integrated to other peripheral systems is critical for a seamless transition and to ensure business continuity.
- Change Management – Although a system might be well defined, people need to adapt to the new way of doing things. Top-level management buy-in and support throughout the grocery ERP project lifecycle is vital for organization wide adoption. Making sure that stakeholders are brought into the project early and that enough training is provided are keys to ensuring success.
Taking the experience of other customers and using the lessons learned from the perspective of a partner specialized in the grocery industry can meaningfully address concerns in a current migration or be used as a model for future projects. And knowing these possible pitfalls will avoid a bumpy migration. We know that the retailer landscape is ever-changing, and grocery merchants are at a pivotal time for the industry, innovating faster, understanding consumers better, and providing the type of service and products that were unheard of just a few years ago. In fact, a trend that has been growing in recent years slow checkouts, a checkout that is a slower experience, allowing the consumer to chit chat a bit, is yet another way grocers are connecting to customers and constantly improving the customer experience. Continuing to grow and innovate, driven by advances in cloud technology, lightning speed digital upgrades, and integration partners that know the industry, the future for grocers has never looked brighter, or more attainable.
Reach out to Rizing and find out how we can help you with your migration. Or sign up for an assessment of your business today.