Grocery Retail’s Speed Of Decision-Making Is Not Matching The Clock-Speed Of The Customer

New research by Blue Yonder has revealed that most retailers are struggling to keep pace with customer demand, leaving them at risk of failing to deliver on their brand promises in the omnichannel era.

The research was the result of interviews with 750 grocery managers and directors across the globe – in the USA, UK, Germany and France – about their customer experience delivery.

The research uncovered that 90% of interviewees across the globe have issues meeting customer requirements, with a quarter feeling they fall short on delivering a true omnichannel experience. Nearly a third of directors in the UK feel there are too many decisions to make and a similar proportion believe decisions are not being made fast enough. The research also found that one in five feel they do not deliver the product at the speed the customer expects.

Blue Yonder said that the ability to make fast decisions has become the benchmark for success in the new grocery marketplace. The right decisions have always been important, but the right decision now needs to be made faster. Customers expect speed and convenience from grocery retailers; speed in delivery times, in getting the product they want from the shelves in the store, during the payment process, and in comparing prices and options across the market.

The research revealed that many grocery managers and directors feel their ability to match the requirements of the customer is hindered by the decision-making speed in the supply chain:

  • Nearly 40% of all respondents say decisions in the supply chain are slowing down their decision-making, leaving them unable to keep pace with their customers. The UK’s supply chains are considered the weakest across the globe.
  • 34% in the UK say this is down to their supply chain legacy infrastructure.
  • 35% in the UK feel leaner processes in the supply chain would best enable them to meet the needs of the customer at the speed of their expectations.

Professor Michael Feindt, founder of Blue Yonder, commented: “Our research found that many grocery managers and directors feel their supply chain decision making is the weak link, hindering their ability to deliver at the pace their customers expect and impacting the delivery of a premium customer service. No retailer will survive if they do not adapt their decision-making – whether in the supply chain or on the shop floor – to match the new clock-speed of the customer and keep pace with their expectations.”

The research also found that more than 50% of grocery retailers feel decision-making speeds are slowed by too many manual decisions in the process. They also believe that better data availability (85%), data analysis (71%) and automation (67%) can help them speed up and make the best daily decision making. The research also found a full 100% of directors believe AI and machine learning is either already changing retail, or will change the future of retail.

Professor Feindt added: “Grocery retail is dealing with many changes and threats. The digital behemoths have shifted the rules of engagement, providing shoppers with options of 24/7 shopping on any platform, delivered when they want it. Combine this with digital transparency of pricing and the rise of the convenience discounters and the world is a very different place with margins getting ever tighter. This makes it vitally important that grocery retailers are able to deliver the same, if not better, customer experience which requires the right replenishment and pricing strategies, while also making it mission-critical to reduce waste.

“Only those retailers who understand the importance of advanced machine learning algorithms and big data will survive and thrive in grocery retail into the future”

Download the full research findings from the Blue Yonder website

NAM Implications:
  • Where at: A reminder that any delay in following the market can provide opportunities for the competition, especially in flat-line economies, a global issue, i.e. ‘Omnichannel means Omnichannel’, with no quick, or inadequate fixes available
  • Where headed: Amazon has already demonstrated that sped of reaction – even anticipation – is a fundamental differentiator nowadays, and will only become more critical
  • Effect on you: Unless you find ways of matching – and anticipating – the clock-speed of the savvy consumer, someone else will…
  • Action: If your supply chain believes legacy infrastructure makes it impossible to keep up, why not await a contradiction via one of your traditional competitors, while Amazon set the actual standards?
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