From the Shop Floor: How Food Retailers Embraced Lockdown

Food retailers have gone through one of their busiest periods on record, with research by Kantar showing that grocery sales were over half a billion pounds higher in the past four weeks compared with the same period in 2019. That’s despite losing almost a quarter of their staff to Covid-related absenteeism. With shelves returning to near full capacity, how have supermarkets adapted and what does this tell us about the future of food retail? 

My role at IMS Evolve is to ensure our retail customers realise the true potential of the IMS IoT software, identifying opportunities for efficiencies and automation whilst helping them transition through the digital transformation process. However, before joining IMS Evolve, I was a store manager and held head office roles for a major UK food retailer. Like many others, in the early stages of the pandemic I saw the images of empty shelves and retailers under huge pressure and hoped I might be able to help. I contacted some former colleagues to offer my assistance, which led to me basing myself at one of my local supermarkets to help manage their response to Covid-19. Over the past few months I have seen first-hand how retailers have used a combination of hard work, sheer determination and advanced technology to manage the challenges posed by the pandemic. However, back with my technology hat on, I’ve been contemplating what all of this might mean for the future of food retail. 

Critically Quick to Adapt 

The speed at which retailers were able to adapt so quickly to social distancing measures – seeing them become a major driver in creating the ‘new normal’ that is frequently talked about now – was striking. This is due, in part, to the high levels of tech adoption within the retail industry in recent years. If you think about it, supermarkets have been well equipped to keep staff and customers apart for some time now, with technology such as contactless payments, self-checkouts and ‘scan and shop’ services. These technologies, combined with efficient redeployment of colleagues to help control customer flow, enabled stores to rapidly implement effective social distancing measures.  

Digital innovations, such as customer flow tracking and footfall analytics, will eventually enable more and more of these processes to become automated. Appropriately, this will remove the requirement to have staff potentially putting themselves in harms-way by managing one-way systems or one-in-one-out policies. Interestingly, there are already many customer flow analytics solutions on the market, but there hasn’t previously been a convincing enough reason for retailers to invest. Now, these technologies may find a compelling business case if these measures are to be sustained long term. 

Implementing such technologies also presents an opportunity to support Government initiatives, such as the new ‘Track and Trace’ programme. This may come with its own set of privacy ramifications, but would customers be more prepared to face fears over privacy if it meant their weekly shop was safer? It’s unclear if retailers will go down this route, but there is an argument that if the technology exists, we must leverage it to ensure maximum safety for shoppers, both with their health and personal data. 

Connected Supply Chain 

The speed at which supply levels have quickly returned to adequate levels, despite the huge spike in demand, is no mean feat. High levels of advanced IoT connectivity and consistent communication between suppliers, warehouses and stores ensured fresh deliveries of goods as and when required. 

Despite some early and well-documented challenges – most notably the huge upsurge in the demand for toilet roll – this technology has been vital in ensuring stores have the visibility and flexibility to adapt quickly and keep shelves fully stocked. This includes the rapid sourcing of alternative products when required and rationalising ranges to deliver a core range of essentials for customers. 

Additionally, with large volumes of the population being advised to stay at home, the demand for click and collect and home delivery has understandably never been higher. This advanced connectivity across the supply chain enabled retailers to pivot and embrace the lockdown challenges, and allowed supermarkets to quickly adapt their business models and meet these non-store shopping demands.

Tesco, the UK’s largest retailer, announced last month that it had increased its capacity to around 780,000 deliveries a week, up from 660,000 at the start of the lockdown, with plans to further expand to over 1.2 million weekly slots in the coming weeks. Although partly due to an increase in manpower, the operational changes enabled by technology solutions will make these changes sustainable in the longer term, and allow this massive increase in capacity to continue.

Remote Capability to Increase Flexibility

For retailers, keeping produce safe and fresh is of the upmost criticality; this has not faltered during the pandemic. Safeguarding critical assets such as fridges and freezers and maintaining operational efficiency has played a crucial role in continuing to ensure high levels of quality produce. By leveraging advanced IoT technologies that gather real-time machine data, retailers with these solutions already implemented have been able to access, monitor and manage the health and performance of in-store assets, drive automation for efficiencies, reduce the requirement for on-site intervention and remotely protect their infrastructure.

Estate-wide visibility and control has been, and will prove to be, crucial to the future of supermarkets within the ‘new normal’. Remote management capabilities have never been more important, providing retailers with the flexibility and adaptability that the fast-evolving landscape we are now in demands.

Supermarkets have Changed, Forever….

Having sat on both sides of the divide at different times during my career – as a store manager and now working for a retail technology company – it’s easy to take for granted just how much technology has evolved food retail processes and practices. From contactless payments and self-checkouts through to connected fridges and freezers, our local supermarkets have become more resilient, adaptable and efficient – and not just during a crisis.

Business has certainly changed over the past few months for retailers and although sales have been strong, the cost of serving customers has increased and there has been a considerable impact on their margin mix. These changes almost certainly won’t be re-set until there’s a vaccine, so it is safe to say that retail is going through a major transformation. As they move from crisis response to business as usual, retailers will need to find ways to recover the impact to their profits. This gives a great opportunity for digital innovation to provide the solutions to enable this and play an even greater role in the post-lockdown grocery landscape.

For now, our supermarket shelves are full and, aside from socially distanced queuing, the quality of our shopping experience hasn’t become markedly worse. Working in my local supermarket over the past few months has shown me that the ability to react quickly, rapidly adopt technology and drive continued innovation inside stores has allowed food retailers to embrace this lockdown, ensuring that they are able to effectively adapt to the ‘new normal’, sustain the food supply and continue to deliver for customers during exceptional circumstances.