6 Ways Grocers Can Build a Customer-Centric Business With Analytics
Grocery retailers like you know what drives business. You know what your customers want, what sells where, and how to create premium in-store experiences. But a recent survey suggests that grocery retailers need to turn their attention to back-end operations.
The grocery world is volatile and unpredictable. Fluctuating demand patterns, transportation shortages and disruptive weather incidents are enough to keep grocery executives’ heads spinning [1]. But, there is an opportunity within the chaos.
As demand and supply cycles increase, and more and more grocers pivot towards e-commerce, we will see the emergence of leaders and laggards in the grocery world. The difference between the two groups? Their understanding of the relationship between the supply chain and customer satisfaction.
SAS, in partnership with Forbes Insights, Intel and Accenture, surveyed 1,000 leaders from the world’s major consumer packaged goods firms and retailers. The research found that forecasting cycles are changing from annual and quarterly to monthly and weekly. AI, analytics and technology are powering a new, digitalized era of food forecasting.
The biggest challenges facing grocery retailers today
Today’s consumers have high expectations when it comes to their groceries. They want to be able to buy what they want, when they want it—whether in-store or online—and receive their order fast. In line with this, 69% of retail leaders say forecasting for demand and supply cycles is increasing in both speed and frequency.
However, speed and consistency are not mutually exclusive: 67% of grocery retailers say demand and supply cycles are becoming more episodic and volatile. And that’s before we think about the unknown unknowns.
Disruptions like cyber-attacks and natural disasters could be just around the corner, putting further strain on fulfillment. It’s no surprise, then, that more than half of executives say keeping up with consumer sentiment and other disruptions poses significant challenges for their business.
The missed opportunity
Most grocers realize that their forecasting models are fit for yesterday’s market. While 60% of retail executives stated that historical forecasts were a valuable indicator of supply and demand before the pandemic, today a majority are striving to be less historically focused (69%) and to use more external data in forecasts and planning (70%). Seventy-one percent of grocery retailers are taking steps to better optimize, coordinate and improve their supply-chain and customer engagement forecasting and planning.
Despite this, supply chain visibility is lacking. Less than half of retailers (40%) have access to market and demand signals, while only one in five have full access to pricing. [2]
Achieving this kind of granular visibility is only possible with AI and analytics. Yet, only 50% of retail firms use AI and analytics for forecasting and demand planning right now—with 45% planning to do so in the next 18 months.
Grocery retail and the analytics revolution
You might think your analytics tools are doing a good job, but they can do so much more [3]. Most of today’s analytics platforms tend to look in the rear-view mirror, using historical patterns to predict the future.
By contrast, advanced analytic algorithms enable companies to turn data into insights in almost real-time. While no one can see into the future, these platforms empower you to see trends and patterns faster and before anyone else.
Armed with these insights, you can create a consumer-centric supply chain model, giving your customers a frictionless experience, so they are never left wanting a product that is out of stock or unavailable online.
Brands such as Kellogg’s and MolsonCoors have already innovated their supply chain to include demand-sensing and integrated demand-planning capabilities, which have helped them improve operational agility.
How to supercharge customer experiences with AI and analytics:
- Embrace customer-centricity: Supply chain efficiency is integral to the customer experience. Elevating customer engagement must be core to your strategy.
- Take visibility to the next level: Location and department silos can interfere with delivering valuable data insights. To that end, your supply chain processes should be transparent, integrated and dynamic.
- Increase agility: Visibility is the foundation for agility, enabling you to quickly react to shifting market dynamics, so you can meet consumer demand as it fluctuates.
- Invest in the last mile: Solutions like real-time vehicle tracking and transportation planning can enhance last mile efficiency, giving you a competitive edge while enhancing the customer experience.
- Think holistically: Supply chain data can boost sales and marketing, so harness the power of customer purchase data to provide personalized recommendations.
- Stay one step ahead: Predictive analytics empowers you to identify your customers’ next moves, so you can build reliable, dynamic next-best-action models that fuel decision making.
Want to get the full survey insights?
Read ‘AI and analytics are powering a demand planning and customer experience revolution’ today.