Challenges & Growth Opportunities for Grocers in 2022

2022 is already proving to be another year of complex challenges and reactionary growth for the retail industry. Grocers are still feeling the effects of pandemic shopping, ever-changing demand for online grocery, labor shortages, and supply-chain inefficiencies—and may need to get creative when it comes to solutions. The good news is this: by focusing on fresh, meeting the customer where they are, innovating forecasting tech, optimizing labor efficiencies, and leaning into automation, the difficulties facing retailers can seem less daunting. Read on to explore a breakdown of each challenge and corresponding growth opportunity. 

Challenge: Online Grocery Competition 

Growth Opportunity: Meet the Customer Where They Are

The explosion of online grocery has been a lesson in trial-and-error for many grocers—and by this stage in the game, there is far less room for the latter. Omnichannel competition is steep; retailers must innovate systems strategically to garner business in the unrelenting race for consumer loyalty.

Addressing the challenge of online grocery means meeting the customer where they are: Whether they are buying through an app, placing an order online and picking up curbside, using an in-store or third-party provider to have groceries delivered. Providing reliable services in all omnichannel iterations is what places superb grocers above the rest. Features like in-app communication, ultra fast delivery, and auto-population of past orders and suggested items are helpful perks when done right—but mean nothing without a seamless omnichannel experience. Optimizing the eCommerce experience from order placement to order fulfillment means a successful grocer as much as a satisfied customer. 

Challenge: Changing Dynamics of COVID-Era Grocery

Growth Opportunity: Focus on Fresh

Customers and retailers alike are by now well aware of just how drastically the pandemic has reshaped grocery. Beyond tangible effects like surging demand for online grocery services, shopping habits have changed. Consumers are thinking fresh: when they go grocery shopping, they want a wide variety of fresh and pre-made items. Some retailers may be feeling the effects of low performance in the fresh and made-to-order aisles. Shoppers looking for fresh, healthy, and easy meal options will simply go elsewhere to shop—to a grocer more focused on total store freshness. 

Many grocers have turned to forecasting technology solutions to access analytics and improve ordering and stocking accuracy in fresh sections. Prepared meal selection can also benefit from enhanced inventory management, especially for grocers providing digital ordering tools to the customer. Freshness in made to order, bakery, and hot food areas can be critical to capturing meal dollars from restaurants and meal delivery services. Innovation in fresh also reaches beyond to center store and packaged goods, targeting the reduction of expired products on shelves and in online orders. 

Challenge: Labor Shortages

Growth Opportunity: Optimizing Labor Efficiencies and Leaning on Automation

The labor shortage crisis has been a persistent challenge for retailers since the onset of the pandemic. Attempts to attract employees with higher wages, hiring bonuses, expanded benefits, and opportunities for professional growth doesn’t always fill pressing labor gaps. Under already massive pressures of supply-chain shortages and heightened sanitation protocols, time is not on the side of the grocer. 

Many retailers are embracing automation when it comes to sanitization, made-to-order machines, and self-checkout terminals in order to free employees for more nuanced tasks. Burgeoning digital business means new labor requirements: Picking, preparing, and delivering orders creates a whole new set of challenges when it comes to training employees and maintaining levels of labor efficiency and customer satisfaction. Disconnected digital systems often cause unnecessary hiccups; linked operations platforms create smooth lines of communication and eliminate time spent with errors, human or otherwise.

Challenge: Supply Chain Insecurity 

Growth Opportunity: Innovative Forecasting Tech

Much of the supply chain challenge is out of the retailer’s hands. What remains is the ability to think smarter about inventory tracking, stocking practices, and the use of customer data to pinpoint demand patterns. Incongruous platforms might make inventory data inaccurate, unuseable, or isolated. Linking systems effectively can provide retailers the analytics necessary to turn consumer data into actionable forecasting. Synchronization is particularly important when it comes to total store forecasting: what sells or doesn’t sell in fresh may affect the filling of online orders—and vice versa. When it comes to facing supply chain insecurity, grocers can at least gain confidence in forecasting tech that provides accurate ordering insight. With analytics in-hand, grocers can make the best informed decisions for their stores.