Opinion

Get ahead or get left behind in tomorrow’s grocery landscape

15 November 2016

Joanne Denney-Finch landscape
Joanne Denney-Finch

Now is the time for food and grocery businesses to “lead or to lose”, according to IGD chief executive Joanne Denney-Finch as she outlines her vision for the future of global retailing based on ultra-efficiency and inspiration 

Retailing is splitting into two parts: one largely automated and super-efficient and the other based on delivering inspiration. The blueprint is already emerging, not in one single place but spread across the world. 

Automatic for the people 

Looking at examples of best practice from global retailers and manufacturers, greater automation of everyday, staple purchases will drive shoppers to seek out excitement and creativity for the balance of their grocery shopping.

Eventually distribution centres will be operated almost entirely by robots and trucks will drive themselves. Our smart appliances will use sensors to guarantee great cooking results and people will hand over many decisions to their smart devices. We’ll sign up to long-term deals, because that will be simplest and deliver best value. So as shoppers, our key staple items will turn up just in time, whenever we need them. 

But on the other hand, as people’s lives keep growing more hectic, so spontaneous buying and eating will also be even more popular. Online services will respond to this too, with meal kits and ready to eat food delivered to the door at rapid speed.

Excitement in the aisles

However, physical stores will always have the edge for instant gratification and for products we like to see before we buy.

Stores in the most convenient locations, such as train stations, will be more favourable for shoppers in the future, so big stores will have to work harder to entice people. They’ll become much more exciting, featuring lots of fresh food, new products, special events and more ways to taste, learn and discover. Experts will be on hand to give advice and deliver personal service. Branded manufacturers will be helping their retail customers to differentiate and deliver excitement because those that don’t will be marginalised.

Retailers will also compete fiercely over health. They’ll give the healthiest food the best locations supported through their pricing and promotions. And the provenance of food and the ethics behind it will be hugely important. It’ll be an even more transparent world and progressive companies will celebrate this. They’ll be really proud of the standards at every point of the chain for all the food they sell.

So that’s my vision of the future. Shoppers will be delighted. Companies will be tested, but the best will really thrive.

Delivering the vision

To deliver this future of automation coupled with inspiration, having the right people with the right mix of skills will be critical, from highly capable food scientists, quality control specialists and all-round good managers, to those people who can bring new skills to both the in-store environment and supply chains. 

Our research shows most British shoppers view the leading supermarkets as largely interchangeable and even as part of the establishment. So food stores need to become edgier and more inspirational. Both retailers and suppliers will need to invest in creativity and product expertise, because we’ll need more people in store to advise and recommend. The more automated life becomes, the more essential it’ll be for companies to have a friendly face and to bring their brands to life with a unique personality.

Data and technology skills are also increasingly vital, while supply chain teams will need to develop a greater understanding of the end-to-end food chain. While you need more of those creative and people skills to attract shoppers into your stores, you’ll also have to stay disciplined with cost and competitive on price. The supply chain experts of tomorrow will work in partnerships to deliver improvements at all points in the chain. 

You’re going to need a rich range of skills to be fit for the future… as skills will separate the winners from the losers. But I firmly believe the future will be more rewarding than anything we’ve seen before.

Joanne Denney-Finch is chief executive of IGD, a UK-based food and grocery research and training charity. She was speaking at the Canadian Grocer Thought Leadership Conference in Toronto on November 14.

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