Customers are evolving faster than ever. Truly understand the customer and use this to drive action that pulls the supply chain forward.

 

Latest News
News Feature image

Kroger is expanding its autonomous grocery delivery service to Houston, following an earlier test in Scottsdale, Arizona.

More News

“Beware of minimising costs and wastage in your supply chain at the expense of the needs of your shoppers”, you will hear me utter to delegates in our workshops. This was brought to life for me last week when I popped into a supermarket for few items on my way home from work.

I took a route to go past a convenient supermarket. On entering the fruit and vegetables department, I encountered a succession of depleted fixtures. As I made my way around the store it was clear several items were unavailable, and I had to make several substitutions. The last straw for me was when the size of milk I wanted wasn’t available. At 7pm on a Tuesday evening, this store was not going to get anywhere close to delivering my needs as a shopper!

Being a good shopper, I put what I had picked up back and left. On exiting, an old ECR statistic on availability came back to me. After three instances of poor availability, seven in ten shoppers will shop elsewhere. That was true for me and it only took 15 minutes to lose me as a customer.

We know through our shopper research, there are categories where an out of stock impacts store sales more significantly – including milk and produce. These are staples and customers are less forgiving when out of stocks are encountered.

Source: Shoppervista Category Benchmark Research, Jun-Sep’ 18

Back to my shopping trip… I decided to try another store. It wasn’t quite as convenient, but I was confident it would meet my needs, as it stocked a wide range and always had great availability in the past. While there was plenty of stock on the shelves, it wasn’t perfect. In fact, there was too much stock! So much so, that wastage was clearly a problem. I bought what was on my list, but I also purchased several products from the clearance fixtures. While this is probably a preferable scenario for me as a shopper, it certainly doesn’t help retailers make money.

In both cases, the stores hadn’t balanced their inventory to achieve optimum availability and minimise waste.

However, there’s one store I won’t be returning to. Yes, it might have been a one-off issue; the store may have been running down stock for a fixture relay. But as a shopper, I am not going to give them the benefit of the doubt because I don’t have to.

With a wide choice of stores for shoppers to choose between, retailers need to consider more than just matching on price to attract shoppers, they need to consider how they serve all of their needs.

Source: Shoppervista Sep ‘18 All shoppers Top reasons for choosing last store visited

In the ideal world, retailers would have an excellent grasp on inventory to minimise wastage and maximise availability. When making decisions that affect availability and waste, it’s so important to consider the impact of choices on the shopper. Getting it wrong means missed sales today and potentially a lifetime of lost loyalty and value.

With more and more focus on minimising wastage, I’m concerned we’ll see more empty shelves later in the day. We need to remember who the customer is and to not lose sight of their needs.

We recently published a report exploring on shelf availability and the factors that influence it. Take a look.

Simon Attfield

Simon Attfield

Category Insight Manager

The UK’s largest retailers, food producers and manufacturers, as well as hospitality and food service companies have committed to milestones laid out in a new ground-breaking industry food waste reduction roadmap, developed by IGD and WRAP to tackle food waste in the UK.

Get the latest industry news and insights straight to your inbox with our range of newsletters.

The service called ‘Ocado Zoom’ will be tested in West London.

Customers can now place orders with Ocado for delivery within an hour. The new service is caters to smaller order sizes and was first announced in February. The Zoom service has been compared to Amazon’s Prime Now, a comparison that Ocado is keen to distance itself from, stating that the service is a response to customer demand.

Minimum order value

There are 10,000 SKUs available to choose from, and orders can be delivered within the hour, or later the same day, with delivery slots subject to availability. There is a minimum order value of £15, and delivery charges are applied at the checkout.

Environmentally friendly delivery

Ocado is offering a one-hour grocery delivery powered by the delivery platform Stuart. Stuart is a delivery fleet company that offers a variety of deliver methods, from bikes to cars to ensure the delivery arrives promptly. Stuart was founded in 2015 and is focused on moving goods around major urban centres in an environmentally friendly way. Stuart’s technology is integrated with Ocado’s ordering process to ensure the best suited delivery method is used for each job.

David Saenz, chief operating officer at Stuart, said “By bringing together both companies’ cutting-edge technologies, we have built a service which facilitates the grocery shopping experience and gives consumers quicker and more flexible access to grocery shopping, matching their own fast-paced lives. This sector is quickly evolving, and we are excited to be at the forefront of it.”


Amazon’s new delivery service, Amazon Day, gives Prime members the option to pick a day of the week to take a delivery of their recent orders.

Shoppers are able to add items throughout the week to be delivered on their chosen day by selecting “Amazon Day” as the checkout option. Prime members can order products for Amazon Day delivery up to two days before the designated day. However, those who enrol in Amazon Day are not limited to the select day and are still able to order items with Prime FREE One-Day Shipping and Prime FREE Same-Day Delivery if they choose.


The Amazon Day initiative is a great example of some of Amazon’s values in practice including customer obsession, operational excellence and passion for invention.

Reducing its impact on the environment

The service enables Amazon to group multiple purchases for delivery together, resulting in fewer packages. Through this service, Amazon is fixing a key shopper concern by offering convenient delivery whilst at the same time supporting sustainability.


With recent stories including the launch of waste free shopping platform Loop and Amazon’s push for manufacturers to meet its frustration free standards with its Frustration-free packaging programme, sustainability in ecommerce is becoming a bigger topic. Amazon Day is considered to be one of Amazon’s sustainability initiatives to help achieve Shipment Zero, in which the retailer aims to make 50% of all shipments net zero carbon by 2030.

Maria Renz, vice president, delivery experience at Amazon, said:

“Amazon Day adds another level of convenience to the many shipping benefits Prime members already enjoy. Prime members can now choose to get their orders delivered together in fewer boxes whenever possible on the day that works best for them. We’ve been testing this program with a group of Prime members and Amazon Day has already reduced packaging by tens of thousands of boxes – a number that will only continue to grow now that the program is available to Prime members nationwide”.


Presentations

21/02/2019
On shelf availability (OSA) provides retailers with a shopper perspective of service and a view of overall supply chain effectiveness. This report explores shopper responses to out of stock products and what retailers, including Tesco, Sainsbury's and Co-op are doing to improve OSA.
06/02/2019
A coalition of the largest consumer packaged goods companies, along with recycling organisation TerraCycle, has unveiled a global, first-of-its-kind, shopping system called Loop.
28/01/2019
Marks & Spencer (M&S) has launched an interactive map that shows customers and stakeholders where every type of fish or seafood it sells is either caught or farmed.
View all presentations

Explore how implementing a sales and operational planning (S&OP) process can improve forecast accuracy, reduce costs and transform how a business runs.

Early bird offer!
15 October, London
term technology looks like The IGD Supply Chain Summit 2019 focuses on how to be customer centric. We’ll connect you with the retailers, suppliers and solution providers that are winning with customers.

Use our benchmarking reports to compare yourself to your peers and as a roadmap for future development.

Get the latest headlines delivered directly to your inbox every Thursday.

A practical one day workshop for all roles in suppliers, to help develop your understanding of the vital part that supply chains play in underpinning FMCG businesses.