Tech Will Help Supermarkets Navigate Next Phase of COVID-19 Marketplace

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Tech Will Help Supermarkets Navigate Next Phase of COVID-19 Marketplace

By Joe Smirlies - 04/07/2020
Tech Will Help Supermarkets Navigate Next Phase of COVID-19 Marketplace
Chart courtesy of Invatron

In the span of a few weeks, we’ve seen the adoption of online grocery being forced years ahead of its expected growth, without the necessary infrastructure or staff to sustain it. Many of our customers’ production planning and ordering processes were similarly disrupted. In some cases, all they could do was rush to produce product, and stock their shelves as quickly and with as many core items as possible.

There will be important learnings coming out in the next few weeks as companies begin to asses their sales data. The COVID-19 crisis has demonstrated that demand, availability and production all influence each other. And when one or more shifts outside of the expected range (in this case, very low availability and very high demand), the entire cycle is at risk of collapsing. Grocery chains across North America will need to leverage technology to adapt to their customers’ new buying patterns.

Going forward, following are three ways that technology can help balance these sometimes competing forces and help both grocers and consumers adapt.

Technology can help companies reach the new normal in the best shape possible – without burning bridges with frustrated customers and staff.

Real-time inventory for online shoppers

With the rise in ecommerce, grocers need to have adequate inventory to keep up with orders, or even better, provide online shoppers with real-time inventory levels so they can select alternative items if stock is running low.

Retailers have generated a lot of goodwill by lowering fees for online orders, but this quickly evaporates when customers receive orders with large quantities of substitutions or even worse, no-reason order cancellations.

Maintaining a true perpetual inventory is only possible with an inventory management system that tracks inventory movement across all channels, giving shoppers accurate in-stock quantities. This can help increase customer satisfaction by increasing successful fulfillments and ensuring replenishment matches demand.

Forecasting the New Normal

We know demand for specific items is up -- way up -- but how likely is demand to remain this high over the long term?

Agile and dynamic forecasting technology analyzes historical trends and generates accurate production planning and ordering recommendations. Being able to analyze data within a single day, and along the broader demand curve of preceding weeks, will allow supermarkets to adapt. Machine learning looks at the collection of granular item movements that make up historical trends, to optimize and react to new influences that weren’t accounted for.

Some new consumer trends we’re seeing now include increased stress-reaction purchases of more alcohol and snack foods. One survey found that a large portion of customers are now stockpiling up to two weeks of essentials. Weekly leisure budgets previously dedicated to social gatherings or eating out at restaurants are being redirected back to grocery stores as people eat three meals a day at home. Being able to track and react to these sometimes unexpected trends can lead to valuable growth opportunities for stores.

Grocers are now dealing with the post-surge era. They’re looking at ways to return to standard ordering and inventory levels, so they don’t continue to forecast at surge highs. In response, software vendors must add flexibility and new capabilities to their replenishment software. Last week we rolled out an Emergency Event Exclusion feature, a mechanism that acts as a signpost to mark the beginning and the end of the surge period. It tells the forecasting system to ignore this abnormal data and return to analyzing pre-surge information. This also creates a valuable dataset that can be analysed should there be another demand surge if governments have to fight another wave of infections.

Training and Managing the Flood of New Staff

Lastly, with the tens of thousands of new hires supermarkets are bringing on in response to the pandemic, grocery stores will need to train them at lightning speed. Increasingly stretched thin, managers will also need to oversee their ordering and production on a daily basis. Computer-generated production planning and ordering are great tools to help lighten the load on supervisors and create accurate daily marching orders for store staff so they can quickly replenish the right quantities of product.

Technology has an important role to play in the coming months. Will we retain our physical distancing, or will we rush out to celebrate en masse once the shelter-in-place orders end? Whatever the outcome, technology will help match supply with demand in whatever form the new normal takes.

About the Author

Joe Smirlies

Joe Smirlies

Joe Smirlies, SVP, Periscope product management at Mississauga, Ontario-based Invatron, brings more than 20 years of experience in fresh item management soft Read More