Blog: How the cloud can aid grocery retailers with omnichannel store fulfillment

January 07, 2022  |  REINT JAN HOLTERMAN

According to a report by Mckinsey, there has been a five-year acceleration of online penetration in a matter of just months, due to COVID-19. And although online shopping was not so new for some retailers, it was certainly a big change for many groceries and supermarkets, with many customer journeys now starting from home. Grocery retailers had to expand their omnichannel presence, and they had to do it quickly. As a result, we saw that more than 30% of retailers shifted a large amount of their 2020 budgets to fund omnichannel fulfillment.

Retailers are facing two primary challenges to omnichannel store fulfillment

The change has not come easily. Deloitte lists the main challenges that retailers face when contemplating omnichannel store fulfillment. The two most important are:

1. Managing inventory and stock
2. Leveraging technology to enhance customer experience and speed-of-service 

Let´s dive deeper into these two challenges. 

For grocery retailers, it is critical to manage their inventory properly, particularly when it comes to fresh produce and fast-moving products. They’ve got to manage the stock in-store and online, to guarantee that the products consumers need are available wherever they shop. Especially with consumers having so many options—and now channels—to get their groceries, the competition is growing. 

And although having different channels is helpful to mitigate the uncertainty caused by COVID-19, it has also created more challenges, with 53% of retailers reporting stock inventory management problems. To address this problem, retailers must...

Eliminate siloed channel strategies 
Embrace technology that provides inventory visibility
Implement smooth backroom operations 

Secondly, leveraging technology such as embedded sensors, digital store tags, and heat mapping, can help facilitate the communication between customers, associates, and store managers based on their geographic location and inventory availability. Deloitte reports that this new technology enhances customer engagement and allows store associates to efficiently fulfill in-store orders.

In addition to in-store technology, and due to the strong growth of online grocery shopping, some grocery retailers and startups have opted for offering customers a different type of convenience: grocery delivery. These services focus on two important aspects for customers: convenience and speed. New competitors, like Gorillas, in Germany, deliver your groceries in 10 minutes. You can simply open the app, pick the products you need (at retail prices) and get your groceries delivered. Picnic, in the Netherlands, allows customers to order their groceries through an app, and the goods are delivered at a designated time. Instacart in the U.S. offers same-day grocery delivery. Hema, a grocery chain in China, delivers groceries and prepared meals within 30 minutes. 

Cloud computing for grocery retailers
An approach that some retailers have resorted to in order to mitigate these challenges is cloud computing. It is a way for grocers to blend their brick-and-mortar stores into an online environment. Compared to other traditional IT resources, cloud computing is more flexible, scalable and cost-effective. By adapting their retail model to the cloud, businesses can move ahead of their competition. 
This strategy allows retailers to integrate and centralize operations such as inventory, shipping and POS. Employees can access the inventory information from anywhere in the world, and by offering real-time data and using analytics, companies can get real-time visibility of stock availability to optimize omnichannel store fulfillment. The cloud helps retailers have a unified view of the customer across transactions and channels by collecting personalized information from different channels and sources. With this data, retailers can offer their customers a targeted experience with tailored content. 

Diebold Nixdorf´s Vynamic® GRx software is a cloud-native solution designed specifically for grocery retail. It is based on Vynamic Retail Platform, a comprehensive retailing platform running in the cloud. Optimize your inventory levels, improve your omnichannel presence and manage connected journeys and efficient operations with one platform. With open APIs that can be customized to your needs, and modular microservices for scalability and flexibility, Vynamic GRx provides grocery retailers with an optimized solution to adapt to customers’ ever-changing needs. 

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