Study: Grocers fail to meet shoppers’ fresh needs

JANUARY 11, 2017 | BY DEENA M. AMATO-MCCOY

Many grocery retailers are still missing the mark when it comes to meeting a key shopper demand. 

 

Specifically, 81% of shoppers said they are unable to get produce they want in store, online and at discount retailers, yet 91% of grocery retail professionals are confident they are meeting customer expectations of availability.

 

This disconnect was revealed in an international survey of 4,000 consumers by Blue Yonder. The research explored consumer shopping habits online and in supermarkets, discount retailers and mass merchants across the United States, United Kingdom, France and Germany.

 

Shopping experiences both online and in-store are not only failing to meet customer expectations of purchasing goods anytime, anywhere, but 35% of shoppers stated they are let down at least once a week. Sixty nine percent (69%) said there is a lack of availability online, while 85% found the same struggles in supermarkets.

 

Replenishment practices are also lacking across supermarket chains, as 30% of all shoppers abandoned their carts if they were unable to find the produce they wanted. Meanwhile, 28% saying that they felt unsatisfied when buying a similar product as a substitute, data revealed. 

 

Lacking produce availability can have wider implications for profitability. It has prompted 20% of shoppers to stop shopping with a retailer permanently or for a period of time. This figure rises to 31% for online retailers, the report said. 

 

“We all understand replenishment is incredibly difficult to get right, especially in regards to fresh grocery,” said Professor Michael Feindt, chief scientific advisor and founder of Blue Yonder. “Disruptive shopping behaviors have made increases in demand more variable while grocery shopping missions based on trust, freshness, choice and – of course – value, all add to the complexity of replenishment decisions.”

 

This is only exacerbated by increased competition from new market entrants — especially those who utilize data-driven approaches and automation at their core. Meanwhile, 46% of grocery directors still drive their replenishment decisions by gut feeling, according to a previous study of 750 grocery retailers. 

 

To overcome this challenge, retailers should adopt artificial intelligence and machine learning technology that “learns” from customer data and predicts their behavior — a practice that empowers grocers to determine the effect of each consideration, on each product, across all locations. 

 

Machine learning can effectively incorporate factors that gut feeling can’t, such as the impact of weather, holidays and promotions. This can be done on a daily basis, resulting in hundreds of millions of daily forecasts. Retailers using machine learning have seen a reduction of up to 80% in out-of-stock rates without increasing waste or inventory, the study said.