Grocery stores are adjusting floor layouts to accommodate both curbside pickup and in-store shoppers. At an equivalent time, food production companies are reconfiguring transportation lanes to distribute to both wholesale and shops.
The reset that’s happening within the food industry may be a big deal because the availability chain must accommodate changes in distribution and be nimble to reply to future shifts. In response to those demands on the availability chain, food retailers are investing in technology that gives them real-time visibility into shipments, information that they will then relay to consumers.
How Consumers Have Changed
For years, the food industry has lagged behind other retail sectors in its use of e-commerce. But the pandemic has “forced the difficulty,” said Ray Tharpe, Group Director of Strategic Planning at Ryder.
When going bent go shopping at a supermarket felt less safe, consumers turned to mobile apps for home delivery of groceries or resorted to curbside pickups from stores.
In 2020 alone, the web sector of food retail jumped by a whopping $60 billion, consistent with Mercatus. This datum et al. made clear what was happening across America: We were eating more meals reception and much fewer inside restaurants.
While a number of these changes in habits might reset to pre-pandemic models once Covid-19 is behind us, others are expected to remain.
“The pandemic has been with us for quite a year now, and that’s long enough for brand spanking new habits to develop,” Tharpe said. He sees more consumers preferring the Buy Online, devour future (BOPUS) model for food shopping after the pandemic wanes. The numbers support Tharpe’s prediction: Online grocery sales are estimated to extend to $250.26 billion by 2025, consistent with Mercatus. It stands at $106 billion today.
Tharpe envisions an omnichannel behavioral shift: consumers shopping in-store for food they need to examine before buying; a subscription model for predictable consumables, like coffee; and curbside for the remainder.
Effects On the availability Chain
To meet changing consumer behaviors during the pandemic, Tharpe saw stores reconfiguring their back-end processes. Dark stores, places that are closed to the general public and used primarily for order fulfillment, became more common. “Store employees were now runners, picking and assembling orders,” Tharpe said. The omnichannel model of grocery shopping is additionally making stores rethink how they apportion their square footage between the warehouse and shopping lanes, he said.
The pandemic didn’t just change consumer habits. It wreaked havoc up and down the availability chain. Pork processing plants pack up thanks to worker illness. Food packaging materials, typically imported, were suddenly briefly supplied. Mass packaging lines in factories had to reconfigure their production lines to accommodate the top point of the availability chain: homes rather than restaurants. Transportation costs shot through the roof, too.
“There were disruptions coming from every angle and every one day long,” said Kendra Phillips, Chief Technology Officer and vice chairman of latest Products at Ryder. “It was such a big change overnight.”
An Appetite For Greater Visibility
Phillips said the pandemic “really pointed to the necessity to possess visibility into your supply chain, to be nimble, to react quickly and adjust.”
By digitizing transactions and processes up and down the food supply chain, RyderShare™ offers that visibility, she added. The technology moves opaque pen-and-paper trails into the digital world and allows food retailers to seamlessly share real-time information to all or any of the players in their supply chain.
Such visibility results in improved collaboration. “Now you’ll communicate together with your partners. we will take something that’s not predictable and make it more predictable for everybody,” Phillips said. She cited an example of a Ryder customer that supplies goods to hardware stores. The wholesaler saw a sudden spike in demand within the wake of the pandemic but was ready to manage it better through the RyderShare™ platform.
Digitizing the availability chain and improving visibility also allows retailers focus to on maneuver to where it must be: on the customer. A more transparent supply chain allows you to place out fires and elevate the customer experience, Phillips said. In an industry skating on razor-thin margins, which will make a world of difference.
“We’re seeing the food supply chain under the microscope now because the pandemic highlighted its weaknesses,” Phillips said.
It was a necessary adjustment.
“The pandemic was an enormous shock, and it invited change,” Tharpe said. Another shock is probably going, he added, but the proper technology will help cushion it.