Progressive Grocer

FEB 2017

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106 | Progressive Grocer | Ahead of What's Next | February 2017 Digital Solutions Supply Chain S ome of the latest technologies being designed for consumer use sound more like science fiction than practical solutions. Will people really come to rely on self-filling refrigerators, or actually enjoy shopping in fully automated grocery stores without human interaction? Only time will tell whether these and other ideas will gain common acceptance, but one thing is certain: Technology, and its impact on the food industry, is only going to grow. Further, as the definition of grocery shopping contin- ues to evolve — with shoppers finding new ways to make their lists and fill their baskets — retailers must frequently contemplate how their supply chains need to change. Several experts who spoke to Progressive Grocer agree that grocers' supply chains need to become faster, more accurate and definitely more demand-driven to accom- modate consumers' growing thirst for the convenience of technology. ere are also new considerations when it comes to store layout, inventory, and how retailers' store and online operations fit together. "Supply is now meeting demand in whole new ways," observes Brian Kilcourse, managing partner of Miami- based market intelligence company RSR Research LLC. "In a number of ways, new consumer behaviors have fundamentally broken the serial nature of the value chain. It was serial in the old days — the retailers bought big, shipped product to their warehouses, and then broke it down and shipped it to the stores. e assumption was that you brought supply to demand … in the store. But it isn't necessarily happening that way any longer." Paul Chang, global supply chain subject-matter expert at Armonk, N.Y.-based IBM, concurs. "Retailers today need to have a more robust supply chain, and perhaps one that's more flexible, to be able to meet changing consumer demands," he notes. "ose demands can shift so quickly nowadays, because of things like social media." Old and New Challenges As RSR's Kilcourse sees it, grocers still must contend with the age-old challenges of getting the right inventory to the right place. ey also have a new problem, however: how to get supply directly to the point of demand. While he says it's safe to assume that some shoppers will continue to prefer to pick their own produce while they're in the store, grocers must recognize one of their own weak spots — the mundane task of buying the same routine products week after week. "As the digital domain improves, those things are easy pickings if the digital world finds a way Retailing on Demand As new technology impacts the way consumers shop, retailers must accommodate with changes to their supply chains. By Jenny McTaggart

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