Grocers struggle to adopt new tech, procurement strategies
- Internal obstacles hampering many grocers and retailers' procurement performance include struggling with technology implementation and adoption (44%); gaps in sourcing and procurement expertise (41%); limited staff capacity (32%), and lack of overall sourcing and procurement vision and strategy (31%), Progressive Grocer reported.
- Results came from a report by Proactis, a global spend-control and e-procurement solution provider, which conducted a detailed survey of 130 procurement practitioners across grocers and other retailers in North America.
- Grocers and retailers that adopt a technology introduction program succeed most with simple programs and platforms, supported by sourcing services that help retailers extract greater value and stay competitive.
According to Whole Foods' recent statements and financials, the grocer has been trying to grow digital sales and reduce expenses, a shortcoming Amazon will no doubt remedy thanks to its IT infrastructure expertise, which makes Whole Foods ripe for digitizing its distribution network. Whole Foods isn't alone, however, as grocery stores in general have been slow to adapt to technology, even when doing so could improve service and savings.
Kroger, for example, offers its own grocery pick-up service through ClickList, where customers can buy Kroger groceries from its website then pick them up from the nearest store. In select locations, Kroger delivers directly to the customer's door. Instacart is already delivering groceries from Wegmans in Rochester, New York, but both these services — Wegmans' and Kroger's — come with an additional fee for pick up or delivery.
For many e-commerce consumers accustomed to Amazon Prime's fast and free shipping, this may be a challenge, since it's evident these grocers still need to make a profit, and many can't deliver as quickly or cheaply as other sellers like Amazon and Walmart.
This is where internal tech advances and procurement strategies become important: as Proactis revealed, technology implementation and adoption affects grocers' performance by 44%, and a lack of procurement strategy affects performance 31%. Those are big numbers, and will seriously affect a grocer's bottom line if not addressed.
Grocers need to find a way to improve their operations and supply chains so that even if they can't offer quick and cheap grocery delivery right now, they are streamlining their procurement processes and adopting tech that will decrease inefficiencies and increase profit margins in the long run.