The first blog post in this series discussed the shift in consumer behavior, including where, how often and how we shop is setting in motion an unprecedented time of uncertainty and opportunity for the grocery industry. This part of the series will go into further detail around the digital component of grocery.

Digital Commerce and Edge Signals

The rise of e-commerce will transform grocery by providing a new channel and customer experience while digital signals from the edge will provide new capabilities to grocers seeking to better understand the flow of products across their supply chain.  With Amazon’s acquisition of Whole Foods, grocers will face unprecedented disruption as direct to consumer penetrates a traditionally brick and mortar business.  Providing competitive levels of flexibility will become paramount to maintaining customer loyalty, while leveraging data signals to improve operational efficiency will help control the increased overhead of introducing new offerings and integrating them into the traditional supply chain.

The Digital Channel

Still in its infancy, but seeing exponential growth, is the digital channel.  While other retailers are reeling having missed the opportunity to get in front of this new reality, grocers have a window of opportunity where the impacts are already being felt, and have a chance to embrace the opportunities while minimizing the challenges this will present.  Whether direct to consumer, in store pickup or subscription based deliveries, opportunities abound to lay the groundwork to deliver this next generation consumer experience at a differentiated price point.  The digital channel is going to provide challenges, including inventory availability, order sourcing, differing picking and tracking mechanisms and home delivery.

Digital Signals and Edge Data

New capabilities, such as edge signals, digital sensors and big data and predictive analytics, are being introduced to improve control and accuracy in the supply chain, as well as to track the flow of product.  The latter data will provide insight into flows which, will drive predictive analytics and ultimately result in machine learning applications that can predict and respond to disruptions and opportunities across the supply chain.

The changes that are coming to grocery distribution are daunting, but rarely have opportunities, such as the ones listed above, presented themselves to otherwise stable industries. Not all challenges can be addressed simultaneously, and trying to do too much can have as negative an impact as doing too little.  The key here will be to make bets on the core capabilities, with the foresight and vision of articulating how the approach will define your business and differentiation in the market in years to come.

Developing a cohesive, holistic strategy – with recognition of interdependencies in a value-add roadmap will be critical to executing a plan to embrace the next generation grocery environment.  In the next blog of this 4-part blog series, we will explore the next level of impacts to the supply chain, and which core capabilities will be needed to ensure success.

How JDA Can Help

With a long history of supplying grocers with best in class applications to manage, and a comprehensive view across assortment planning, supply chain planning, and execution, JDA is uniquely positioned to provide SME insight into the impacts of the shifting consumer behaviors on your business, and provide insight into the competitive landscape to provide a view to the criticality and urgency of transformative projects or programs to prepare for the coming disruption. Contact JDA today to learn more.

Learn more about this topic by downloading the eBook, “The Digitalization of Grocery.”