Supply chain shortages, price hikes, and climate change continue to impact our global food system, and the convergence of these challenges puts a lot of pressure on grocery retailers. They’ll face lots of hurdles this year, including labor and retention problems, supply and demand imbalances, sustainability adaptations, and accelerated consumer trends. No store is totally immune to these challenges but those that embrace transformation at every level will experience fewer bumps in the road, future-proofing their business against whatever comes next.
When it comes to your fresh strategy for 2022, here are four key challenges grocery retailers are sure to face—and solutions they can pursue to overcome them.
Challenge: Hiring, training, and retaining employees
Retailers everywhere have been struggling to meet staffing needs and the problem isn’t likely to ease up anytime soon. While high turnover has been a growing problem for years, impacts from the pandemic have further reduced the already small pool of tenured, fresh-ready employees. Fresh produce departments are incredibly complex and difficult to manage—and it’s only getting harder. In a 2021 trends report, 31% of retailers said their biggest fear in the perimeter would be attracting and training qualified employees. New-to-fresh employees might spend hours writing an order manually or fumbling with technology that doesn't really work, and they’re likely to end the day concerned about their upcoming order…and maybe looking for a less stressful job. Investing in tools that make the hardest part of the job easier (and they do finally exist!) goes a long way in empowering employees to be proud of the work they do.
Solution: Invest in technology that makes tasks easy and enjoyable
What store teams need most is an ordering solution that helps employees get the job done, regardless of how much fresh or tech expertise they have. That means the interface needs to make sense, data needs to be up to date, and recommendations must be reliable. Intuitive, easy-to-use solutions from Afresh enable new team members to gain expertise as they build the order, making the process fun and accurate instead of frustrating.
Challenge: Keeping out-of-stocks low, customer satisfaction high
Let’s face it, stockouts cause walkouts. 69% of consumers say they expect fresh produce to be in stock every time they shop, but inventory challenges have hit nearly every category since the start of the COVID-19 pandemic, leaving 65% empty-handed during at least some visits to the store. While occasional out-of-stock conditions are inevitable due to supply chain issues, stores CAN control stockouts that occur due to poor ordering. They haven’t invested in the predictive forecasting tools they need that help team members build orders that meet demand.
Solution: AI-powered forecasting, inventory, and order recommendations
Right now, employees are keeping multimillion dollar fresh departments running by writing orders with the only tools they have: spreadsheets, failing technology, or their best guess. So it’s pretty amazing just how well they’ve been doing! But labor shortages have left new-to-fresh employees to make ordering decisions, leaving the door open for costly mistakes like empty shelves and food waste. With the help of recommendations from Afresh, even the newest team member can place orders that are optimized for the unique variables, trends, and current in-store stock of every item.
Challenge: Achieving monumental sustainability commitments
An increasing number of retailers are setting aggressive sustainability goals as company and consumer values change. Even further, some of those businesses publicly announce their commitments, sharpening their competitive edge. In our 2021 Fresh Food Trends Survey, 63% of consumers said they would be more compelled to shop at a store they know is committed to reducing food waste, a clear sign that loyalties shift to companies that prioritize protecting the planet.
Solution: Data-driven solutions that reduce food waste
While climate change is a major concern for consumers, they can’t control what happens to food before they buy it. Every rotten rutabaga or tossed-out tomato creates a ripple effect that lasts far longer than that food’s shelf life, and up to 40% of wasted food comes from retailers. Grocery chains that focus on preventing food waste will see a return on investment that improves profits, employee happiness, customer satisfaction, and the future of the communities they serve. Food waste is one of the biggest causes of climate change and eliminating it is the number one way to reduce future harm to our planet—something we all have a responsibility to do.
Challenge: Being the best fresh department around
According to Deloitte, 90% of consumers say “fresh food makes them happy.” As we enter calendar year three of a global pandemic, winning market share isn’t just about have food on the shelves, it’s about creating meaningful experiences that delight customers and help them navigate a constantly changing world. Bringing home fresh produce that goes bad right away leaves a bad taste in consumers’ mouths and they may not return to the store. As inflationary pressures grow and food prices continue to rise, folks can’t afford to waste time or money on shopping trips ultimately that end with their hard-earned food budget going in the trash just a day or two later.
Solution: Prioritize best practices that extend post-sale shelf life
Grocery chains must implement changes now to protect their fresh departments from future disruptions. Chainwide rollouts of fresh-first technology and improvements to merchandising strategies will drive up quality and improve customer experiences. Solutions that protect and extend the shelf life of individual products do exist and are helpful for use with a store’s most popular items, but those approaches can’t optimize every item in the order guide. Stores that use a Fresh Operating System have a solution that takes factors like perishability and anticipated demand into account, which means stores can stock fresher produce that lasts longer at home. Giving customers the quality and consistency they want builds lasting customer relationships, a key to retention during a time when fresh produce prices are rising—up 7.1% at the start of 2022.
If we had one piece of advice for grocery retailers in 2022, it would be this: Invest in better tech for your fresh departments.
Retailers sit at the center of supply and demand, and fresh food’s everyday variables, unforeseen disruptions, environmental changes, and accelerated trends make processes and operations beyond challenging, especially when they’re done manually. Grocery store technology trends have largely focused on point of sale and the customer experience but that transformation tends to stop at the fresh department. Stores of all sizes won’t keep up without the help of a tool that’s easy to use, actually works in fresh, and requires minimal time to integrate and maintain.
For all regional and national grocery store chains, fresh is your competitive edge. Truly tech-enabled retailers are enhancing capabilities and optimizing orders with AI-driven tech, which is foundational to their success. Even in the face of COVID-19 demand spikes, grocery stores like Heinen’s maintained high in-stock rates with minimal shrink by using Afresh.
Our Fresh Operating System is built for the realities of grocery retail—let’s discuss how you can drive results with Afresh in 2022 and beyond. Talk to us.