|Ed McKiernan | President, Emerson Retail Solutions
Emerson Commercial & Residential Solutions
Welcome back to the second installment of our series of blog posts that look at the top five trends that will shape the grocery retail and chained foodservice markets through 2025.
As mentioned in our previous post, Emerson commissioned global research firm Euromonitor International to identify these trends and determine what impact these developments will have on retail store and restaurant design and infrastructure.
The firm identified five megatrends that will have the strongest impact on retail and restaurant operations and facilities management over the next eight years. Our first post focused on the Digital Shoppers trend; this one takes a closer look at the second trend: “focus on convenience.”
While components of the digital shopper trend center around creating convenience for shoppers, there is enough attention on the concept of convenience that it was worth exploring further in its own megatrend.
Everyone can relate to the general issue of being asked to do more with less time. As a result of hectic lifestyles, urbanization, smaller households and hyper-connectivity, time has become a crucial commodity that customers are willing to pay for now. Currently, 83 percent of the U.S. population lives in urban centers, while 65 percent of global consumers are looking to simplify their lives.
So the challenge for retailers and foodservice providers is to become more convenient and provide a level of simplicity for consumers living more fast-paced lives.
This first requires a redefinition of what convenience means. Traditionally it meant having a basic set of staple goods within a suitable location. Today, it has elevated to the next level, with applications such as click + collect, just-in-time delivery, and replenishment models.
Click + collect is ideal for retailers and foodservice providers that are not able to commit to a full online and delivery service. Many, especially grocery retailers, are finding it an easy way to provide convenience without out a significant supply chain expansion. Consumers digitally place their orders and drive to the store location to pick up their order.
The other two applications are being greatly influenced by multiple leading traditional and non-traditional retailers. Just-in-time delivery is beginning to mean next-day delivery and even same-day delivery. While replenishment models are basically removing the whole idea of shopping from consumers and creating a “set it and forget it” mentality.
Convenience is being redefined with a new store strategy that promises a checkout-free shopping experience. A recent Wired article noted that consumers using a machine-learning app could enter a store, pick up their products and walk out of the store, without having to interact with a single person. Through RFID tracking on the products, customers will be charged through the app.
So, what should retail and foodservice organizations consider doing in terms of facility management and operations to stay ahead of this trend and customer expectations?
- Facilities – Reduce stockrooms and develop new front-end designs and pickup areas to ensure speedy service, freshness and maximize sales per square foot.
- Supply Chain – Adopt a higher cadence delivery schedule with more exact inventory orders to guarantee fresher products and reduced out-of-stocks.
- e-Commerce – Utilize physical locations for fulfillment and outsource last-mile delivery services to attract online shoppers and allow your business to enter the delivery space quickly.
- Human Resources – Employ trained personal shoppers and implement new staffing and scheduling to increase customer satisfaction and order capacity.
- Customer Experience – Focus on convenience-based needs and train customers for new protocols to minimize disruptions and realize potential new cost models.
Be sure to join us for our next post, which will take a look at the third megatrend: New Retail Formats.