Sunny Dhillon is an early-stage investor at Signia Ventures in San Francisco, where he invests in retail technology, e-commerce infrastructure and logistics alongside startups in consumer and business software.
Other contributions from this contributor
- From Farm to Telephone: A Paradigm Shift in the Grocery Store
- An optimistic look at deepfakes
Also called e-grocery Usage has skyrocketed in our coronavirus-catalyzed world. While strict security guidelines in the store can gradually fade, the shopping experience will still be non-contact and socially distant for the foreseeable future.
This begs the question: In the face of even greater challenges than before the pandemic, how can grocers ensure their businesses continue to be profitable?
Just as micro-fulfillment centers (MFCs), dark stores, and other fulfillment solutions have helped e-grocers optimize profitability, various technologies, old and new, can help brick-and-mortar stores stay relevant and keep producing cash.
Today we present three “must-dos” for post-pandemic grocers: Rely on the data, Rely on the biology, and Rely on the hardware.
Rely on the data
The hallmark of shopping in a store is the constant availability and large selection of fresh items – often more than online. However, as the number of customers in the store continues to fluctuate, planning inventory levels and minimizing waste has become increasingly challenging for grocery store managers. Grocers on average throw out more than 12% of their products on the shelf that already have wafer-thin edges.
While E-Grocers automate and optimize their fulfillment processes, brick-and-mortar grocers can automate and optimize their inventory planning mechanisms. To do this, they need to use their existing customer, business and external data volumes to gain valuable insights for the store managers.
Walmart's Eden Technologies is a leading example. The in-house tool, which emerged from a corporate hackathon project, has been deployed in over 43 distribution centers nationwide and promises to save Walmart over $ 2 billion in the coming years. For example, if a batch of products destined for a store several hundred kilometers away is deemed to be ready soon, the tool can help redirect them to the nearest store instead using FDA standards and over 1 million images to advance the analysis.
Similarly, companies like Afresh Technologies and Shelf Engine have developed platforms to leverage years of historical customer and sales data, as well as seasonality and other external factors, to help store managers determine how much and when to order. The results have been all positive – Shelf Engine customers have increased their gross margins by over 25% and Afresh customers have reduced food waste by up to 45%.