Food & beverage retail: before, during and after COVID-19

Food & beverage retail: before, during and after COVID-19

The coronavirus is like an earthquake that has swept across every industry, from IT to mechanical engineering. Unfortunately, not everyone can survive this cataclysm - either those who move very fast or those who stand firmly on feet. But everyone faces losses to one degree or another. Their level depends on management and its decisions. Despite the complexity of the situation, the crisis is an opportunity for business transformation.

During the quarantine, while everyone was staying home, grocery retail continued to work respecting the limitations. People have not stopped eating or looking after themselves, but they have changed their habits: they have started buying online more often, trying to minimize contact with others. It was a stimulus for food retailers to start implementing digital transformations more actively. It is worth talking about non-food separately because it also has new examples of transformations.

Before COVID-19

Retail digitalization is a process that began long before the pandemic. Apart from their volume and experience in the market, retailers have been moving online and investing in business process automation. Now it is no longer enough to find a beautiful space, buy high-quality products, and open a supermarket. The main task of any grocery retailer is to set up an efficient commodity turnover and customer retention. That is why retailers continuously improve their inventory accounting systems, dynamic pricing, forecasting, automated supply, warehouses, goods balances, etc.

Retailers are regularly working on business processes automation to stay competitive since e-commerce and direct competitors steadily increase their market presence. Before the pandemic, the attitude of retailers to automation was different - some approached the issue strategically and gradually optimized the processes, some put these plans in the backlog. Everyone understands that this is necessary, but no one has a clear idea of how soon.

All retail companies have to one, or another degree developed a website with the ability to place an order and choose whether pickup or delivery. Some Ukrainian supermarket chains already had the self-pickup service before the quarantine. Therefore, the audience often did not even know that the service was available. There was no mass demand for it, and it was difficult to calculate the ROI. COVID-19 had shown that visionaries who have been investing in online ordering, pickup service, and delivery before the pandemic, were better prepared for the new reality. By the way, it is worth noting that not all retailers need the pickup service. Discounters who sell goods at the lowest possible price have never targeted an audience interested in pickup or delivery. But it was before COVID-19.

During COVID-19

When the virus reached Ukraine, it was already clear that certain restrictions on people's movement, visiting public places, shops, etc. will be imposed. It was necessary to implement delivery and pickup services asap. One of the first faced problems is that the existing third-party systems are not ready to handle a massive flow of orders. They have stated that the future belongs to the self-pickup service, but it soon turned out they were not quite ready for it.

Retailers have begun to integrate pickup more actively. The integration is impossible without the transformation of existing business processes, such as the order generation, storage, payment, etc. Side processes can be set up, but there are many of them, and therefore the implementation of a new service takes time. Some companies have started integration fast and using whatever was available involving third-party systems; some had it in their plans, so they reprioritized them. But all without exception concluded that without the implementation of such side processes like the work with catchweight and frozen items, post- and prepayment, the pickup time slots management, etc. the service would be deficient.

COVID-19 has also led to the formation of relatively new business processes for retail, such as monitoring compliance with epidemiological responses, hand sanitizers, social distance, and body temperature measurement at the store entrance. Initially, these processes worked manually, but now the development of automated solutions is actively underway. It makes sense as the WHO continues repeating that the epidemic will not pass quickly. Moreover, such solutions can be further adapted to other business processes. As JEVERA has gained retail experience for ten years, we are already in negotiations with industry representatives to develop software solutions to automate the "new normal" processes.

After COVID-19

New beings have made their adjustments to the usual processes. The changes that retailers have launched today will not disappear and will continue to work tomorrow. Retail will continue to integrate omnichannel solutions and expand its online presence. All of them had such plans, but with different priorities. Today the trend is progressing more actively.

Some non-food retailers are already transforming their business model - positioning as full-fledged e-commerce and using offline stores in the form of showrooms. Grocery retail is also beginning to look in this direction. There are more and more discussions around the "dark store" format. It will continue in the future.

Food retail will walk not a revolutionary, but an evolutionarily way. That means the solutions implemented today will be improved tomorrow. Automation is a striking example. It will dive even deeper into the industry. A fully automated store without traditional cash desks and staff will become a completely common thing for us very soon. Here we can talk about the prospects of the next few years. Such projects are already emerging in Ukraine.

To sum up: Food retail has faced tough challenges, but those companies with a strong digitalization strategy and made sophisticated decisions quickly have gained benefits. Before COVID-19, more attention was paid to network expansion than to digitalization and the launch of new services. The epidemic has shown that new services are sometimes a matter of business survival. Retailers realized that innovations can be launched quickly, that there is always room for experiments, that MVPs and pilot projects can be launched rapidly, and that you can rebuild business processes on the fly.

Therefore, retail will move in the direction of digitalization much faster. It will automate business processes to achieve maximum efficiency, test and integrate new services that will increase consumer loyalty, experiment with "dark store" formats, and adopt many more innovations that will change the entire consumer experience and significantly transform grocery retail. Returning to the earthquake metaphor, traditional business approaches have become ruins on which new solutions are already being built. It will be exciting to follow this both as a consumer and as a digital business transformation specialist.