In 2019, 4% of grocery sales were online. In 2020, that spiked to 30%, according to Karen Bomber, Honeywell’s head of retail insights. COVID changed that and so much more for the retail supply chain in 2020, with some of the changes likely becoming permanent, Bomber and Miya Knights, head of industry insight at SaaS technology company Eagle Eye, told the audience during a virtual session Tuesday as part of the National Retail Federation’s Chapter One conference.
Noting that she was one of those who started buying groceries online, Bomber said, “The shift of consumer behavior is forcing [retailers] to do what they would have taken maybe two or three years to do [and] do it in a matter of months.”
Knights noted several changes taking place, including the movement to “C to M,” or consumer to manufacturer. An example of this is Amazon’s recent announcement of its Made to You clothing, allowing consumers to order T-shirts made to their unique measurements.
Suppliers, Knights noted, are starting to see a shift away from just-in-time manufacturing and distribution planning based on forecasting to a system she referred to as “demand chain.”
In the demand chain, it is the consumer who dictates the goods retailers stock. To succeed in this system, Knights said retailers need to adopt technology in stores at the same speed they have adopted it for mobile users, creating a seamless experience and giving them insight into consumer preferences.
“I think we’re going to be left with fewer but more impactful stores,” she said, but those stores will serve several purposes, including acting as fulfillment centers for online orders.
Knights said there are plenty of instances in which shoppers are seeing items online first and then going to the store to buy them. She said there has been a 40% increase in mobile shopping, but retailers that have been able to seamlessly integrate the mobile experience with an in-store digital experience are well positioned moving forward.
“I think … there’s a real opportunity to use mobile as the digital glue between the physical and the online,” Knights said.
Connecting the two, she said, allows the sales associate to quickly and easily locate products in store or if not in that particular store, at a nearby location. The physical store, she said, still has a “huge role to play,” and technology is the connection for the consumer.
“I think as long as retailers are willing to embrace [technology] in the same way that they’ve embraced it — it seems since the invention of the bar code 50 or 60 years ago — I think it’s a huge amount of opportunity for retailers to continue to thrive,” Knights said.
Knights said retailers need to “follow the customer.”
“I think this year the customers have really spoken with where their money has gone,” she said. “[People are] desperate to go out with friends and family and be happy and so the store is going to be a huge part of that.”
Knights advised retailers to adopt technology, be sure the same mobile technology is available in store to customers and associates and listen to the customer.
Bomber summed up, “Whether ordering online or going to the store, I think what you said has really shed light on just how … all of us as consumers are really pushing the envelope from a technology standpoint.”