One of the key reasons why retailers are focusing on dynamic price adjustments is the ever-increasing dynamic of the market and the increased competition. In most industries, flexibility and adaptability are important characteristics that define success, and the coronavirus pandemic has further accelerated this development. Customer demand as well as the availability of certain products can change daily, making it almost impossible to run a meaningful forecast of purchase behavior based on typical seasonal trends. In these economically challenging times, it is particularly important to be able to act agile. How the fashion and consumer electronics industries are meeting this challenge is the subject of my latest blog posts. But for now, let’s focus on food retailing.
For grocery retailers, digitization has progressed slowly in comparison to other industries due to its specific complexities, such as the breadth of product ranges, short product life cycles and numerous regional characteristics. However, food retailers are under pressure to act more agile, so that dynamic price optimization is gaining ground faster and faster here as well. Sophisticated software solutions make it possible to depict the complexity of the food retail trade, optimize price processes and strengthen the profitability of a company.
However, problems often arise around dynamic price adjustment in the food retail industry. Here are five of the biggest problems – as well as the approaches to solving them:
1. Electronic shelf labels
Electronic Shelf Labels (ESLs) are currently still the exception rather than the standard. Without ESLs, however, dynamic price adjustments are very costly and therefore difficult to implement. This is because every price modification means that staff must manually change the label on the shelf.
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However, even if retailers don’t have ESLs, they can still make dynamic price adjustments. This is because dynamic pricing software makes it possible to limit the export of algorithmically optimized prices to the decisive price changes, for example, to those prices that will have the greatest effect in terms of sales or margin potential. In this case, it makes sense to determine the number of possible price changes per day or week on a regional basis. Based on this data, price changes can be regularly implemented in all product ranges – but only as many as employees can handle. In this way, prices of many parts of the assortment are regularly adjusted, and fluctuations in demand can be recorded and reflected in pricing. Automatic label and poster print solutions can support this process and relieve retailers of a large part of manual work.
For example, a discounter in the food retailing sector has an average of 2,500 products. With only 25 price changes daily, the discounter can adjust the prices for a quarter of the entire range to the current market situation within a month. It can enact price changes that have the greatest effect, react to fluctuations in demand and optimize earnings potential all at the same time. Supermarkets, which carry an average of 12,000 products, achieve similar effects in four to eight weeks with 50-100 price adjustments per day.
2. Organizational structure
The organizational structure of many retailers in the food retail industry is very complex. Whether it’s flagship stores, regional sales areas or associated branches, it is important to be able to map this structure using a dynamic pricing software, so different branches can set different, demand-based prices. This is because purchasing behavior in the southern part of a country may differ from that in the north, or demand in a large city may be different from that in rural areas.
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Dynamic pricing software supports this by providing a detailed business unit concept that allows food retailers to digitally map their organizational structure one-to-one. Once this structure has been created, the retailer can specifically define which districts or branches they want to treat as autonomous, relational or uniform in terms of pricing.
3. User management
When setting prices, it is often important and necessary that individual stores are able to manually adjust prices – such as for fresh products – despite the use of dynamic pricing software. Pricing decisions made by those responsible at the point of sale must therefore be able to override the decisions of the software.
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For this purpose, a mature dynamic pricing software must provide an appropriate user and rights management. In the same way that retailers can map their branch network using the software, they can also map their employee hierarchy. Authorized branch employees or area managers can thus operate the software independently and set prices manually, in addition to the algorithmically calculated pricing decisions, for the branch or branches in which they are responsible.
4. Product relationships
For dynamic price optimization in food retailing, it is crucial that relationships between products can also be mapped and controlled in detail using dynamic pricing software. To do so, the software must be able to recognize different types of product relationships and enable differentiated control of these items. Relationships between products are typically found in price families or in substitute goods.
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Product relations can be controlled with dynamic pricing in a few ways. First, it is important that product families are automatically identified so that all products within a family (can) receive the same price adjustments. Furthermore, it makes it possible to decouple products from a family and set their price individually. In the same way, distances between product prices can be set dynamically using pricing software. For example, psychological price gaps between private label products and global brands can be implemented. Price differences resulting from separate units of measure can also be mapped both centrally and dynamically so that, for example, a can of soda alone never costs more than a 6-pack.
5. Clean data
Dynamic pricing projects in the food retail industry always mean that enormous amounts of data have to be processed, including product master data and transaction data. In addition, the quality of the given data is often not consistent or clean, which is problematic for the use of a dynamic pricing solution.
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A dynamic pricing solution brings two things with it: on one hand, it offers high scalability and performance with regard to the processing of large amounts of data. On the other hand, it also provides powerful procedures that detect and clean up errors or inconsistencies in the data. This is done, for example, by means of sparse pattern recognition and a correspondingly implemented data preprocessing. In this way, a reliable data basis is created, which forms the foundation for software-supported price optimization.
Bolster existing pricing processes
The most important thing is that a price optimization software supports food retailers’ existing pricing processes in a sensible way and does not force them to fundamentally change or even abandon proven processes. This creates acceptance and above all trust – and both are needed if they want to successfully integrate dynamic pricing into their business processes. Ask me, if you want to know more!
In 2019, off-premises dining accounted for 60% of restaurant occasions. As a result of the pandemic, hospitality must be prepared for this number to continue to rise and remain permanent. What’s more, we’re finding that an increasing number of retail verticals are offering prepared foods and food service in order to create unique in-store experience.
From convenience stores to supermarkets with food service, all retailers who operate some aspect of hospitality require one POS solution for all of their outlets. This ensures loyalty programs and promotions can be available in a consistent way everywhere, which dramatically reduces total cost of ownership for the retailer. Let’s explore specific benefits and features that a single unified POS solution provides:
Contactless payments
Contactless payments is a major topic this year, as the pandemic has raised concerns around safety. If ordering and pickup are contactless, payment should be the same, in addition to being seamless and efficient.
Mobile point-of-sale solutions enable restaurants and retailers to provide payment options from anywhere. Whether a shopper wants to pay as soon as they place their order online or swipe a card once they’re in the physical store, retailers can now accommodate any shopper’s needs.
What’s more, our POS solution offers the ability to start a transaction from any other place or device, and continue it on the POS system. For example, a shopper can preorder food on their mobile device or Apple CarPlay, and the order will automatically replicate into the POS. That way, when they’re ready to pick the food up, it’s available.
App-enablement and app-less technology
App-enablement allows retailers to integrate external applications directly into the POS interface to process a transaction. For example, food ordering and delivery services, such as Uber Eats and DoorDash, have their own applications that must communicate with a restaurant’s POS system. Instead of the restaurant simply receiving an email that requires them to take manual steps, there can be true integration with external applications, ensuring all orders go through the same channel and a uniform process.
In addition to app-enablement, we continue to update our app-less technology features. Imagine all of the benefits of an app, without the need for friction on a consumer’s end. What’s amazing about app-less technology is that it makes it easier for customers to interact with a brand. For example, app-less technology can allow a customer to take a picture of a QR code in order to bring up self-scanning or a pre-order application.
Reducing labor and manual efforts
Historically, there’s a lot of labor involved when it comes to a customer picking up their order. When efficient infrastructure and technology systems are putting in place, retailers can improve convenience on the customer’s end and reduce manual efforts required internally.
As even more contactless and curbside processes emerge, the POS software platforms that can meet new demand will be the key to success. Is it time for you to make the switch?
- Turnover rises to EUR 85.25 million after 9 months
- EBITDA grows by EUR 9.6 million to EUR 11.83 million, compared to the previous year
Turnover rose by about seven percent to EUR 85.25 million (9M 2019 = EUR 79.75 million) compared to the same period in the previous year. EBITDA reached a figure of EUR 11.83 million (9M 2019 = EUR 2.61 million) and therefore increased much more significantly than turnover. The EBITDA margin (related to turnover) amounted to 13.9 percent after 9 months. The EBIT figure of EUR 5.58 million also reflected a huge improvement over the previous year (9M 2019 = EUR (4.23) million). This meant that there was a surplus for the period of EUR 2.97 million.
The basis for these results was, firstly, the programme to increase efficiency internally, which was successfully introduced, gaining six new customers overall, including two in the USA, and two existing customers opting for our core products. Three new retailers were gained in the third quarter alone. Two of these customers are based in European countries abroad and one comes from Egypt. All the new customers , including one major European food retailer, will overall account for the introduction of significantly more than 10,000 new installations during the next few years.
For the first time in 2020, GK Software was also able to gain two retailers, which opted for the company's core solutions in the form of software-as-a-service. One of these customers also selected cloud4retail after the end of the third quarter.
Developments at the subsidiary, Deutsche Fiskal, were also extremely positive; this is based on the fact that it is currently able to offer the only certified cloud solution and it has therefore been able to achieve an excellent position in the marketplace. The Management Board therefore assumes that it will achieve the upper limits of its originally envisaged market share or even exceed them. The solution was transferred to standard operations on 2 November and the company launched the start of productive operations for customers. However, a significant contribution to turnover from the fiscalisation business is not expected until 2021.
The Management Board continues to see positive signs in the 4th quarter, both in ongoing business and in the area of new sales, even if it is very difficult to assess the effects of the renewed lockdown on the signing of contracts in many countries this year. The publication of the complete report for the quarter is planned to take place on 26 November 2020.
The busiest time of the year for retail begins in just under four weeks – are you prepared?
A large German B2C online retailer recorded a substantial doubling of its shopping carts on Black Friday last year compared to “normal” days, and saw a sales increase of 160% for the single day. In our experience, these numbers are not unique: Almost all online retailers that promoted special deals have seen an increasing number of visitors in recent years. For some companies, the sales volume around Black Friday even topped the figures during the Christmas season.
As you know, many factors will be different this holiday sales season, as retail is facing major challenges due to the COVID-19 pandemic. Brick-and-mortar stores in particular are struggling with a sharp drop in sales. Online retail, on the other hand, recorded growth – in the second quarter of 2020 online business grew by 16.5%1 compared to the previous year.
There are different predictions when it comes to consumer willingness to spend on Black Friday this year. A survey of 3,000 people on behalf of idealo2 shows that consumers want to act more cautiously: 66% stated that they plan to reduce or have no budget for Black Friday, and only 8% plan to spend more. Despite the tense economic situation, the mydealz3 survey of 2,022 respondents shows a positive season: spending is an issue for only very few respondents, and budgets are planned to increase by 22.47%, to an average of Euro 272.14 compared to the previous year.
While anticipated consumer behavior seems to be divided, what is clear is that online retailers must optimize this sales season. In order to reach sales potential, read our five tips here to stand out from competitors:
1) Recommend products customers really want
In a physical store, sales force can show a selection of products that go well with customer intended purchase. Online, this is the task of a personalization solution that reacts in real time to visitor’s click behavior. There are many ways to share relevant recommendations at various points in shopper’s journey. Here are three examples:
- Individual deals for every customer are shown to resonate more with audiences. Not all of your visitors are interested in “the one” heavily promoted deal. Personalized recommendations based on current or previous clicks, shopping carts, purchases, searches or likes around products make it possible to offer individual promotions, such as products within a preferred brand or category.
- Recommendations based on image similarities (e.g. color, shape) to a product just viewed achieve a large click response. This is a popular type of recommendation, especially in the fashion trade. For example, if your customer looks at a yellow parka, show alternative jackets in the same shape and color.
- Recommendations of products that were purchased in the past paired together with an item recently viewed are also popular, as they often serve as inspiration for further shopping ideas. For example, a recommendation for table decorations for the tablecloth a shopper has looked at, gloves that pair with a winter hat, or a new book written by an author the consumer has previously purchased.
In addition to these examples, there are many other ways to personalize a consumer’s shopping experience. OurPersonalization Service provides you with over 20 different types of recommendations.
2) Rely on exceptional campaigns
What’s your Black Friday story? Big discounts and attractive deals? Campaigns that stand out from the crowd and surprise customers have been particularly successful in the past. For example, the outdoor brand Patagonia is committed to environmental protection in its Black Friday campaigns and is very successful with it.
What’s more, a specific Black Friday discount doesn’t always have to be the main focus. Provide offers that stand out and become a customer magnet. This can be a specific product that you are offering in limited numbers before sales start, or a special additional benefit, such as a book signed by the author. Participation in a competition after a purchase has been made can also be an incentive for some customers.
This year you should also consider which items should be advertised given the current pandemic climate. Products that make it easier to work and live in your own four walls are in greater demand. According to the portalvergleich.org, these include garden furniture, care products, trampolines, fitness equipment or casual clothing. Another option: combine two items into a product bundle at an attractive price to increase the shopping cart value.
3) Provide customers individual newsletter content
Newsletter marketing is an important lever to get readers to an ecommerce site. Make recipients aware of the upcoming deals several times before Black Friday, and increase the urgency, such as by creating a countdown.
In addition to an early start, newsletter content plays a key role. Pay attention to the formulation of the subject line, as your email has to assert itself against a lot of competition from retailers also competing for space in the inbox. Once this hurdle has been overcome, convince your readers with personalized content. Product recommendations that are generated in real time when the newsletter is opened based on clicks in the online shop or newsletter offer maximum relevance. As a result, this drives a higher number of clicks and more sales in the online shop.
Do you have a specific product or product group that you would like to explicitly advertise in Black Friday newsletters? Here it makes sense to segment and choose the right target group from your newsletter subscriber list that is very likely to show interest. In this way, relevancy drives a higher response to newsletter campaigns.
4) Keep other online sales channels in sight
In addition to the online shop and newsletters, also pay attention to online sales channels. Prepare marketing content for search engines (SEA/ SEO), existing social media channels, comparison platforms such as idealo, or for your presence on online marketplaces such as eBay or Amazon – and integrate them into your Black Friday campaign. Check web analysis from last year to see which platforms your online shop visitors used to find their way to you, and ensure that the content for this is up-to-date and thus exploits your sales potential. In addition, check which new digital sales channels may have established themselves compared to the previous year.
5) Ensure IT infrastructure stability
Customers expect that online shopping will run smoothly, and will abandon a site if not. Long loading times are a common reason for abandoned purchases. In order to prevent a loss of sales, your online shop should withstand higher traffic and higher occupancy during discount days. Check the online shop system itself and all systems connected to it in advance to ensure stability and scalability. It is best to discuss with your host whether a server extension makes sense for you. The host can analyze the number of hits for these special days and assess to what extent there is a need for action.
Do you have any questions about personalization in preparation for Black Friday? We would be glad to help and advise you on your specific request.
- https://www.handelsblatt.com/unternehmen/handel-konsumgueter/e-commerce-online-handel-waechst-waehrend-coronakrise-kraeftig/25977628.html?ticket=ST-674147-qbcfGAyGexWkgeAnhu4i-ap1
- https://www.idealo.de/magazin/2020/10/13/black-friday-2020-umfrage/?camp=affilinet&awc=15536_1603186681_2bb56aa2d1e4fc9c36125d65bda2d419&utm_medium=affiliate&utm_source=affilinet&utm_campaign=101248&subID=at105068_a152282_m1_p6124_t1863_cDE
- https://www.presseportal.de/pm/111715/4739914
The leading* cloud4retail platform of GK Software is now available globally on Microsoft Azure. This enables retail companies to use one of the leading enterprise omni-channel solutions with even more flexibility and additional potential in many areas by using the services and infrastructure of Azure. GK Software also announced that it has reached Microsoft Co-sell ready status.
cloud4retail is GK Software’s flexible, open, commerce platform providing various services for the operation of integrated unified commerce environments. Furthermore, the platform is enriched by innovative services such as AI-based dynamic pricing, personalization and fraud detection as well as mobile customer apps or fiscalization solutions. The cloud4retail platform is optimized for use with Azure and uses its diverse storage, server and scaling capabilities, which offer significant advantages over conventional on-premises installations. Whilst retaining its comprehensive extension and customization options of the various cloud4retail services, e.g. configuration, enhancement, customization, flow design and AppEnablement.
With cloud4retail running on Azure, retailers now have another choice of various deployment models and can easily scale up their operations as required.
Michael Scheibner, Chief Strategy Officer of GK Software, says: "We expect significant effects for our customers in the area of total costs as well as in terms of scalability, security and flexibility. With our cloud4retail platform we can utilize our services according to customer requirements and support retailers in the transition of their IT landscape into Microsoft Azure. The global availability of Azure is an excellent basis for a globally operating solution provider like GK Software to be able to use its leading retail platform. "
"Companies like GK Software add value by integrating their solutions with Microsoft Azure," said Sahir Anand, Principal & Global Retail Industry Lead, Microsoft Azure at Microsoft . "The product integration with GK Software is the exact type of technological solution that ensures store sales reps, managers and HQ teams are in the best position to succeed in every interaction."
This position is also underlined by Xenia Giese, Industry Executive Retail & Consumer Goods at Microsoft: "By combining our Microsoft Azure platform with the comprehensive retail expertise of GK Software, we enable retailers to take advantage of Azure cloud-based solutions. This will help to create added value for our joint customers and support the transformation of retail processes with digital technology.
*"The Forrester Wave: Point of Service, Q3 2018"
online available: https://www.forrester.com/report/The+Forrester+Wave+Point+Of+Service+Q3+2018/-/E-RES140771
Pressrelease GK: https://www.gk-software.com/en/public-relations-en/news/sap-omnichannel-pos-by-gk-named-strongest-current-offering-in-the-forrester-wave-for-point-of-service-solutions-en
- GK Software gains a significant new customer order for its cloud solution
- First existing customer opts to switch to cloud4retail
Two important German retailers have decided to make use of the cloud4retail platform as software-as-a-service. This means that GK Software will make available its platform of solutions as a pure cloud solution for these retailers and take over their operations in the cloud. The customer platforms are hosted in the Microsoft Azure Cloud. Remote installations and updates for the systems in the stores are ordered by the customers in the cloud context and are performed by GK Software. cloud4retail has important features as a genuine enterprise cloud solution for the retail sector: adjustments and ongoing developments are equally possible, just as major retail customers are accustomed to obtaining from the GK Software solutions that are offered as a classic service. As a result , retailers can also map their individual special features when using OmniPOS in a cloud and this allows them to be successful in a competitive environment.
One of the top five DIY markets in Germany with stores in several European countries has opted to introduce OmniPOS as software-as-a-service as the first new customer. As part of this important project, GK Software will operate far more than 2,000 installations from a cloud after the roll-out process has been completed. A longstanding existing customer in the specialist retail sector has also decided to complete the switch to OmniPOS in a cloud. GK Software will also take over operating the platform in this project. Both customers have signed long-term contracts of a software-as-a-service type.
These success stories in the core business of GK Software form the basis for an increasing share of recurring cloud turnover during the next few years. This prospect is being reinforced by the huge success enjoyed by the subsidiary "Deutsche Fiskal", which has managed to attract leading retailers to its "Fiskal Cloud" purely cloud solution. The Management Board continues to assume that GK Software's business overall will continue to grow in future, provided that the general conditions created by the global pandemic do not change significantly. The company believes that it is in an excellent position to handle future cloud demand and this reinforces its claim of being a leading cloud provider for enterprise retail.
The Management Board is standing by its forecast for the year 2020 that turnover can be expanded and significantly higher profitability will be achieved.
Since March, the way we shop has changed drastically. While not a new concept, “contactless” retail has arisen as a buzzword as retailers work to keep customers and employees safe. It’s now an essential feature in order to attract in-store shoppers and maintain consumers’ trust. Luckily, achieving contactless processes in every aspect of the shopping experience can be achieved in simple black and white with the QR code.
Originally introduced in the 1990s, and what was popular in the 2010s as creative marketing tactics, the pandemic has ushered in a new use of QR codes as they are a go-to for contactless interaction. QR codes are now more convenient than ever, as an app download is no longer required. All that’s needed is a smartphone camera.
Let’s explore the number of ways retailers can benefit from QR codes.
Flexibility at all touchpoints
QR codes provide easy access to scanning or checkout within the store. Once a shopper opens their camera to the code, they can either be linked to a self-scanner and can shop throughout the store, or when they’re at checkout, select their payment method. Even major brands have adopted this method of touch-free payment technology, including CVS. QR codes provide an additional payment option for shoppers who may not want to touch a keypad, sign a receipt or hand over a credit card to a cashier.
The QR code extends beyond the store, as well. For those who prefer not to shop in stores, they can be used to streamline order fulfillment, BOPIS and curbside orders. For restaurants, or retailers that offer a hospitality aspect with prepared foods, QR codes can double as menus or links for shoppers to order and pay ahead of time.
It is important to note that retailers using QR codes should consider providing free guest WiFi, as it ensures that shopper’s phones are able to connect to the content and pages they’re looking to access.
Improve the user experience and loyalty
In addition to reducing physical interaction, QR codes can improve the user experience as no sign-up or app download is required. With this, retailers can further adoption and usage rates. What’s more, shoppers can immediately access the information whenever needed. And as payments continue to evolve, retailers can easily integrate any new methods.
QR codes have also generated a whole new level of loyalty. More than one-third of consumers who prefer paying with QR codes say they won’t complete a purchase if that option isn’t available to them. The report also found that consumers who prefer shopping with QR codes are among the most loyal users of all.
Digital options are here to stay
QR codes are a critical integration for any retailer looking to establish seamless, contactless experiences for shoppers, while also remaining in control of the customer interaction. Providing QR codes and other forms of digital payments is a key factor in-store and curbside success during the pandemic.
Touchless ordering payments are essential as consumers have come to expect a shopping experience that is as contactless as possible. Adopting multiple contactless payment options and creatively enhancing QR codes’ functionality is a win-win for customers and retailers. If you’re looking to strengthen your contactless payments strategy, feel free to reach out to us.
GK Software announced the availability of its products for SAP's industry cloud today. Building on the Intelligent Enterprise strategy, SAP is expanding its vertical solutions to fill the whitespace in its portfolio with an ecosystem of industry cloud applications. These applications leverage SAP® Cloud Platform, with advanced technologies, and are interoperable with SAP Business Network and the intelligent suite. As a partner, GK Software is working to deliver comprehensive solutions that are part of SAP's extensive solution extensions portfolio, delivering simplicity, mitigating risk, and accelerating transformation in the retail industry.
GK Software offers a broad portfolio of leading retail solutions, operating natively in the cloud as part of the cloud4retail platform. The integration of these solutions into SAP's industry cloud solutions for retail strengthens SAP's retail industry offering. It is, at the same time, proof of GK Software's successful cloud strategy. This strategy aims to deliver innovative, vertical solutions that help customers achieve cost-effective transformation and sustainable growth, provide new opportunities for better business processes, and give them a competitive advantage in their industries. For more than ten years SAP has been selling GK Software's solutions as SAP Solution Extensions to a global customer base. The entire portfolio is available as a native cloud solution and is offered as Software-as-a-Service. Some solutions of GK Software, such as SAP Dynamic Pricing by GK or SAP Mobile Consumer Assistant by GK, are exclusively provided as cloud offers. Cutting-edge SAP Store Management applications by GK can be used on the same technological basis, either in the cloud or on-premise.
"We are very proud to be part of SAP's industry cloud initiative for the retail industry. This reflects our cloud4retail strategy's success and our strategic partnership with SAP that has grown over many years to deliver value to our joint customers through innovative cloud native solutions. We look forward to helping our joint customers on their way to the cloud with the best solutions available. Our applications, developed in close collaboration with SAP, enable retailers to support an authentic omnichannel consumer experience and provide the data and optimized processes to manage retail systems centrally. This gives retailers real-time visibility and transactional capabilities to deliver a seamless and personalized shopping experience. Our portfolio of solutions, also available in SAP App Center, enables customers to secure digital experiences across multiple devices and channels."
said Michael Scheibner, Chief Strategy Officer at GK Software. "With our key insights and knowledge in the development of purpose-built solutions for the retail industry, we are collaborating with SAP to deliver high-value, vertical solutions to help businesses adapt and succeed."
"The SAP Omnichannel Point-of-Sale by GK application, developed by GK Software, fills critical whitespace in our portfolio and enables a true omnichannel experience for our customers," said Achim Schneider, SVP and global head, Industry Business Unit Retail for SAP. "This is a prime example of how co-innovation between our organizations can deliver value for customers. We look forward to continued collaboration with GK Software and the creation of innovative cloud solutions and applications for customers who want to drive cost-effective and sustainable growth in their industry."
The official SAP News can be found here.
For more information on industry cloud solutions from SAP, read here.
Dark stores are quickly becoming a must-have for grocers looking to improve efficiency and customer service in today’s market. A recent survey found that 68% of shoppers purchased groceries online for curbside pickup or delivery during the pandemic. This surge in online shopping has led many stores to temporarily turn dark, while grocers like Walmart, Albertsons, Stop & Shop and more have already dedicated permanent spaces as “dark stores” - all in the name of improving customer service.
Dark stores are physical stores that have been turned into fulfillment centers in highly populated areas to shorten delivery times. They provide more convenient shopping experiences for consumers and enable retailers to more effectively deal with the sharply increased volume of e-commerce orders. As stores continue to limit the number of in-store customers and enforce social distancing, online shopping will only continue to grow. Dark stores can ease the burden as retailers strive to offer the fast, easy delivery options that shoppers expect.
Strategic inventory decisions
In addition to the benefits of improving last-mile delivery, dark stores can help grocers improve their inventory management. They are a cost-effective way to give retailers the ability to make more strategic inventory choices by location. Access to robust POS and promotion redemption data can help grocers understand order quantities. And with omnichannel technology that bridges the gap between the ERP system across headquarters and store-level processes, employees can effectively and efficiently handle merchandise needs.
To do this, it’s important that grocers have access to accurate inventory data in real time. Otherwise, shoppers looking to place orders online may be faced with out of stocks and increased order substitutions.
Dark stores can also help reduce food waste. If inventory in a dark store shows a surplus on perishable items, artificial intelligence can be used to dynamically price these products to incentivize shoppers to purchase these items.
Perfecting the last mile
As discussed earlier, the main benefit of dark stores is to more effectively manage the demand for online grocery orders, whether they are delivered to a shopper’s doorstep or via curbside. What’s more, dark stores eliminate the need for pickers to be in physical stores, which can decrease the experience for customers who choose to shop in a traditional brick-and-mortar store.
In terms of omnichannel strategy, to maximize curbside efforts, it’s important to have a program that effectively communicates the process to shoppers. Whether that’s an app, via email or QR code, explaining the check-in process for pickup is critical. Grocers should also leverage consumer and store inventory information to deliver personalized recommendations and offers for these shoppers.
Ensure dark store efficiency
Online grocery is showing no signs of slowing down. Among those shopping online for groceries, 81% plan to continue the practice once the pandemic passes. To accommodate this continuing demand, the number of dark stores will only continue to grow.
Ensure that your store efficiency and inventory management processes are up to par with today’s shopper as they order groceries online, via curbside or BOPIS.
As a result of the pandemic, holidays like Thanksgiving, Hanukkah and Christmas, as well as events like company parties, will likely have a virtual aspect to them. However, as friends and families remain distanced, the need to connect will be stronger than ever. Whether consumers are looking to keep old traditions or are starting new ones, grocers can – and should – serve as an important touchpoint to make their holidays memorable. Offering safe and convenient options bolstered by technology is the path to success.
In order to serve their customers during this unprecedented holiday season, here are three C’s for grocers to consider.
Connect online
A recent survey found that 68% of consumers ordered groceries online between March and August of this year. As shoppers move to digital channels to fill their pantries and prep for the holidays, grocers can foster deeper connections with shoppers by providing a variety of personalized and interactive online features.
For example, using a shopper’s mobile device, grocers can make recipe lists interactive and sharable. This feature can be used for a virtual wine and cheese tasting among neighbors, where everyone can easily order the same products for a shared experience. A grandmother’s famous stuffing recipe can be distributed among family for Thanksgiving, and all of the ingredients can easily be placed in a virtual shopping cart with a click of a button.
What’s more, with mobile devices, grocers can continue to inform shoppers about promotions, coupons or loyalty rewards. At home or in the store, shoppers have their phones within an arms’ reach – why not take advantage and provide them with an unforgettable holiday experience?
Contactless payments
A majority of shoppers find that long lines are the most frustrating part of shopping during the holidays. Accelerated by the pandemic, contactless payments and curbside options have emerged as effective methods to serve shoppers, regardless of whether they choose to shop in the store or not.
For those who shop in store, self-scanning and mobile payments can provide frictionless checkout, without having to wait in a long line. The pandemic has led to consumers to quickly adapt these no-touch options, as they are viewed as a safer and more sanitary payment method. Not only does it eliminate shoppers’ need for physical contact, but it also cuts down on that much-dreaded checkout line where groceries must be unloaded and bagged up.
Grocers must implement these flexible contactless payment options to adapt to changing market conditions and quickly adjust processes that cater to any customer’s needs.
Curbside pickup
The number of delivery options has risen, and buy online, pick up in store (BOPIS) and curbside pickup have proven themselves to be popular options. Shoppers can quickly get their groceries without having to worry about shipping, yet also minimize contact with other shoppers. During the holidays, these options will only continue to grow as shoppers stock up for the festivities.
Offering curbside and similar services is important for grocers as it is now a differentiating factor when it comes to shopping with the brand. Grocers should ensure that their curbside experience is convenient and fast, and is user-friendly so that anyone can easily utilize this fulfillment option.
Transition with shoppers' needs in mind
Convenience and safety are at the top of the list for many shoppers, and that won’t change anytime soon. As we head into the holiday season and 2021, grocers must be able to flexibly provide frictionless transactions, pick-up options and online services. From our Mobile Consumer Assistant to MobilePOS solutions, we’re here to help you make that transition for a merry and bright future ahead.
