Brick and mortar food retailers can provide value beyond discounters and online-only sellers by improving productivity. Highly digitised supermarkets can operate with about 40% fewer labour hours, freeing staff to provide ‘value-adds’ such as tasting counters or cooking classes; robotics and artificial intelligence (AI) in warehouses and backrooms create more efficiency, while AI and machine learning can provide better forecasting and stock control. Improving sourcing and supply chain logistics can also reduce time-to-shelf, keep inventory fresher for longer and reduce wasted produce.
Customer demand for convenience can be met through an omni-channel experience by combining in-store, local and online options, as well as providing an innovative, more efficient and quicker checkout and payment process for busy customers. Brick and mortars can also optimise their range of products, maximising the benefits of selling more of the ‘urgent’ and ‘inspection’ items and reducing the floor space dedicated to ‘stock-up’ items, such as toiletries and detergent.
Food retail stores can ensure the perception of their brand’s product quality by investing in fresh foods, especially in-store where customers like to seek inspiration, and by offering customer inspection. Keeping up with popular food and beverage trends can influence perception, as can innovative advertising campaigns. They can also attract and retain shoppers by offering high-quality, branded products under their own labels, as well as loyalty programmes to help convey brand identity, boost customer loyalty and potentially increase gross margins.
While e-Commerce is expected to continue to grow within the food retail industry, Barclays Research anticipates that it will hit a market share ceiling.