Supermarket Perimeter - March 2019 - 16

Getting up
to speed
The Food Marketing Institute's 2019 Midwinter
Conference spotlighted technological revolutions and
what retailers need to do to take advantage of them

n an educational session at the Washington, D.C.-based Food
Marketing Institute's 2019 Midwinter Executive Conference,
"Mastering the Foundations of Digital Success," four industry
experts discussed the ways in which the grocery retail industry can
get up to speed to ensure its viability in a digital world.
But the session's moderator, Thom Blischok, chairman and CEO of
Phoenix-based The Dialogic Group LLC, made it clear at the very beginning that the future of grocery is not entirely a digital one.
"Let me start out by saying: the grocery industry is not going away,"
Blischok said. He then backed his claim up with a number: the average
store of the future will still generate about 80% of its sales instore.
That said, grocers who don't up their digital games won't be able to
thrive in the new retail world. Natalie Williams, vice president of product
leadership for New York-based Nielsen, told attendees that by 2022, 70%
of all U.S. consumers will be online shoppers.
"There is $50 billion growth in the next three years that is yours to
have," Williams said. "But as retailers, you can't do it alone. People need
to come together to innovate." That means retailers working with their
supplier and third-party partners to develop digital solutions, she added.
Another speaker in the session, Jim Smits, vice president of retail
development, North America, for Mountain View, California-based Retail
Solutions Inc., said grocers can expect to see high double digit - and
sometimes triple digit - growth in omnichannel sales in the near future.
The retailers who thrive, he said, will be those who move from a reactive model of what's worked in the past to a proactive model of what
16 - MARCH 2019

will work in the future.
"We're focused on the things we're comfortable with instead of looking to the future. You need to understand what's in your order queue,"
he said. "It used to be, you'd have 25 items on your shelf and sell three.
Now, you have eight and sell three. Retailers need to have granular,
store-level data and strategic partnerships with their suppliers to anticipate demand."
It's not that stores don't have the data, Smits said. Too many of them
just don't know how to use it. "We're data-rich but knowledge-poor. You
have to come up with simple, impactful things to do with the data."
Physical stores, Smits added, are full of "driftwood" - inventory that's
obsolete by the time it hits the shelves. Much of that can be traced to
retailers relying on an outdated model of how to think about merchandise. "Fifteen years ago we were a merchant-oriented industry. Now
we're 40% merchant, 60% data." And instead of forecasting two days
out, retailers need to forecast 30 days out.
Another crucial task for retailers going forward, Smits said, is to be
able to accurately forecast which of your products will be the superstars
that will carry a disproportionate load of sales. "Among those 20,000
items, how do you find the 300 or 400 that are going to have a huge
impact," he said. "We're drowning in data and living in the past. Find that
right partner to mine the gold nugget out of that sea of data."
Grocery, unfortunately, is behind other industries when it comes to
harnessing technology to create better, more accurate forecasts and
hence generate higher sales, Blischok said.

www.supermarketperimeter.com

FMI

BY ANDY NELSON

http://www.supermarketperimeter.com

Supermarket Perimeter - March 2019

Table of Contents for the Digital Edition of Supermarket Perimeter - March 2019