DIGITISATION WILL BE KEY FOR FUTURE RETAIL SUCCESS

Digitisation will be the big transformation in the retail industry over the next few years and retailers who don’t put it at their core will get left behind.

That’s according to Paul Boyle, CEO at Retail Insight, the store-focused execution insight platform. With over 10% of the world’s grocery sales data running through Retail Insight’s systems every day, Boyle has an expert read on the market. And the company is focused on helping its customers achieve their full potential.

“The aim is to take as much value from the store as you can possibly get,” Boyle says. “Even if they are riding the crest of a wave, could they be squeezing more value out of the store? We help retailers understand how to get the full potential from their store estate.”

That includes dealing with the perennial retail challenges of keeping shelves fully stocked, managing fresh food waste, and scheduling store staff. In addition to the current headwinds impacting the retail sector such as the cost-of-living crisis and the growth of online.

While Boyle believes physical stores will continue to play a crucial role in the way shoppers buy and consume, retailers should also be monitoring how stores are being used to serve online orders, both for click and collect services and home delivery, he says.

Online growth

Online fulfilment is a key focus area for Retail Insight. While shoppers may be returning to bricks and mortar stores to keep closer control on their budgets, online appeals to time-starved consumers but they need the assurance their delivery will be fulfilled on time, and any substitutions are as good as they could possibly be.

Retail Insight assists in the process and makes “smart substitutions”, Boyle says. And it’s doing that for some of the world’s largest retailers.

It works with three of the top ten grocers in the US as well as in many other leading multiple, convenience and roadside retailers across the world.

Many retailers now operate multiple channels and often from the same physical location, this creates a whole new set of challenges, Boyle says.

For example, the rise in ultra-fast delivery created the need to compete to be the most convenient. This required investment and just as that is coming to life, and the economics are becoming a little clearer, we enter into a cost of living crisis and the customer swings back to stores, he says.

“It’s a multi-headed hydra – there’s not just one challenge, there are lots of challenges and in retail there is literally no time to take a breath.”

Added to that is the fact that retailers are becoming much more cost and cash conscious than they have been for the last 10 to 15 years.

That’s shaping new behaviours around buying and technology. “They are hoping to buy more efficiency and automation across their stores,” Boyle says. “In terms of retail technology investments, the biggest shift in the market has to come from digitisation.”

Problem solving

When retailers approach Retail Insight it’s usually because they understand that they have an issue they are looking to solve, such as poor product availability. “We quantify this for them through a size of the prize analysis. We then ask if they think they can win in the market if they don’t do something about it?” Boyle says. Given that there are so few barriers to shoppers switching allegiance to another retailer, it is essential to get the basics right.

The Retail Insight AvailabilityInsight solution helps retailers measure and improve their product availability. It blends deep experience, expertise and advanced analytics to provide actionable insight through the supply chain and directs both stores and head office on what to fix first.

Boyle says that he believes the best way for retailers to improve their performance is to define a process and complete it as efficiently as possible and automating wherever they can . Processes must be consistent across a retailer with hundreds, or even ten thousand stores, he adds. “If everybody is doing it differently, it’s impossible to manage.”

Boyle, whose early career was at P&G and Heinz, says that Retail Insight was founded in 2005 to capitalise on the growing amount of data being made available to CPGs. The aim was to help businesses use data to drive sales. The success here meant they expanded into the wider retail ecosystem, creating a unique system of insight that enables grocers to execute with excellence, boosting their performance, increasing their productivity, and dramatically reducing their total loss.

What sets the business apart is Retail Insight’s blend of three key skills, Boyle says. Extensive subject matter and domain expertise in retail, process and operations, deep mathematical and advanced analytical capabilities, as well as leading-edge engineering and technology.

Retail trends and impacts

Current trends in retail are creating new challenges for both retailers and CPGs. The cost of living crisis has hastened a trend of consumer switching from multiple and c-store to limited assortment discounters and then from brand to cheaper own label produce, as shoppers switch to manage budgets. This migration to discounters also has a huge impact on branded goods suppliers since the discounter formats carry far fewer branded lines to mainstream grocers.

Convenience retail and stores in urban centre sites are also under threat from the new ultra-fast grocery model, Boyle says. “C-stores satisfy the distressed or immediate demands of the shopper – on their way home from work. The ultra-fast delivery market is a substitute for those trips,” he says. “C-stores have undoubtedly been impacted by the growth of ultra-fast delivery and, although not all of these ultra-fast businesses are going to last, they will take shopping trips away from physical stores. Hence, C-stores are creating their own, or partnering, to offer this service.”

Boyle advises stores to leverage Retail Insight’s OnlineInsight platform to better predict their chances of fulfilling an order, make smart substitutions and provide the lowest chance of disapproval and return. “And if they run diagnostics on their performance, they will continue to improve the offer. If c-stores harness the technology and take advantage of what we can offer they should be able to unlock some of that growth. Instead of pulling from Gorillas, that order could be coming from grocers with a convenience offer,” he says.

The growth of ultra-fast delivery and the trend of trading down should be real causes of concern for convenience operators, coming as they do on the back of rapid change due to the pandemic, supply chain crisis, energy crisis, cost of living crisis, war in Ukraine and more recent economic crisis, Boyle says. However, there’s an opportunity to reboot stores and encourage people to spend more per trip. “If they get the pricing and offer right then consumers will come back to physical stores. They already are,” he says.

Retailers who take a data-driven approach can also shift their offer to meet the changing needs of their shoppers. For example, the proportion of workers working-from-home has remained high since the pandemic, he says, and that can have a significant impact on some c-store locations, which have previously enjoyed extremely strong morning trade and good lunchtime traffic. “The morning day part will be down significantly,” Boyle says. That has implications for store operations to adapt their forecasting, replenishment, merchandising and labour model. Smart retailers identified this quickly and adapted.

Retail Insight can help retailers take further advantage from digitisation, helping them get to the data, understand the insights, and take action. “We are helping clients use the right data at the right time,” Boyle says. Implementations must also be seamless, he adds. “The application of technology into complex operating structures has to be as simple as it possibly can be in order to be effective. We must make adoption easy and constantly reinforce the return on every action being taken.”

“There has been so much disruption in the retail environment across the last five to 10 years, some driven by trends and some forced upon it by global health, political or economic factors. Retailers now have to embrace this change at a faster rate than ever before,” Boyle says. “The only way to be prepared for, and deal with, these changes is to put data and digitisation at the core of their operating model. Read the signals at the right time and act on them quickly rather than when it’s already too late. The challenge could be existential.”

Posted in

Subscribe to our free mailing list and always be the first to receive the latest news and updates.