By: Tim Kane, Retail Solutions Industry Consultant at Zebra Technologies
In recent years, retailers and grocers have prioritized building smarter operations, elevating the customer experience and optimizing inventory. Although COVID-19 may have changed the way some retailers execute on these three pillars, it has not diminished their importance. Thriving retailers will develop strategies that enable them to adapt to unanticipated challenges, such as the ones seen during the pandemic, and technology will play an important role in helping them rebuild.
Labor costs have traditionally been the retail industry’s largest expense. Increasing the productivity of store associates has always been a focus for retailers, and with the pandemic increasing the cost of labor, ensuring associate efficiency will be even more critical. Factors such as higher hourly wages, bonuses for front-line workers, and protective personal equipment (PPE) are all increasing labor costs. In addition, implementing new process changes to address safety and health concerns, such as frequent store cleanings and health screenings are incurring additional cost.
Improving Workflows and Productivity via Mobile Applications
In order to help control the cost of labor, many retailers are turning to technology to improve workflows. Technologies such as mobile computers and tablets allow employees to run multiple applications at once, helping increase worker productivity and optimizing workflows. Tasking applications have become increasingly important during the pandemic as they have helped guide associates through their shifts while allowing management to assign tasks and request status updates of shift activities. These applications also allow employers to view their associates’ timestamps and location at any given time.
Retailers can also benefit from analytics applications which utilize machine learning (ML) to identify the best next action for store associates and alert them via their mobile devices. These applications also capture valuable data that can be fed back into the ML algorithm to create a smarter store.
Grocery Stores Will Evolve, Even Post-Pandemic
The pandemic has forever changed the grocery experience as we know it. Several grocers reported sales increases of more than 100% year-over-year during the first quarter and more than 31% of U.S households placed online orders in March 2020. It was anticipated that it would take years for online grocery shopping to grow as quickly as it did. Customers who continued to shop in-person were faced with big changes in-store, including plexiglass barriers at checkout, one-way aisles, limits on the number of shoppers allowed inside the store at one time and more out-of-stock items than normal.
Inventory demands resulting from the pandemic broke many retailers’ supply chains and caused unprecedented out-of-stocks. Many retailers are facing the challenge of getting their supply chains to a level at which they can fulfill their customers’ demands. Online orders combined with shoppers buying more product than what they would traditionally purchase at one time makes it difficult, if not nearly impossible, for retailers to have the inventory they need, where they need it and when they need it. The costs associated with online orders combined with the expense of expediting products is impacting retailers’ margins.
Online grocery shopping is here to stay but so is the in-store shopping experience. Grocers must provide shoppers with an enhanced experience both online and in the physical store to retain loyal customers and draw in new ones. Grocers who do not offer online shopping will need to adapt so they don’t lose customers seeking those contactless experiences. Online grocery shopping needs to be intuitive, offer accurate inventory information and enable curbside pickup and contactless payment. Retail brands are now digital brands, and their future success will be determined by their selection of groceries and how well they are able to communicate their values, commitment to customers and associates, position on health and safety and role in the communities they serve.
Addressing Supply Chain Challenges
Retailers are also utilizing technology solutions to automate their supply chains and incorporate new concepts like dark stores, hybrid stores, micro-fulfillment centers (MFC) and centralized fulfillment centers (CFC). All of these concepts allow retailers to cost-effectively fulfill online orders quicker and with fewer substitutions.
Retailers are also utilizing intelligent automation in the form of robots to help them identify on-shelf inventory gaps, planogram compliance and pricing integrity. The robots are communicating with store management and associates providing them with real-time information needed to take immediate action.
Shelf-edge cameras using video analytics monitor on-shelf inventory and send alerts to store associates instructing them to pull product from backrooms or other areas within the store to fill out-of-stocks.
ML analytic engines capture and process data from numerous sensors including robots, shelf-edge cameras, point of sale (POS) devices and associate mobile devices. These engines are generating prescriptive actions for store managers and associates empowering them to create a better performing store.
As retailers adjust to the changes caused by the pandemic and begin to implement automation and other technologies that maximize labor productivity, elevate the customer experience, and improve inventory management, they will make new adjustments to associate workflows. Some of these workflows will be eliminated while other workflows are performed by robots and shelf-edge technology, freeing up human workers to focus on more specialized and higher-value tasks. These new inventory management technologies will make it easier for stores to monitor stock and place orders right away when a product is no longer available. Associates will only intervene in the final step of the process when they are alerted with a task on their mobile device.
Although it’s unclear when the pandemic will be over, consumer shopping habits have changed, and retailers are adapting and will continue to do so. As retailers continue to rebuild after the pandemic, implementing new solutions to improve productivity and optimize workflows will continue to be a priority. To learn more about some of these technologies leading the way, please click here.