Food for thought: innovation in the food sector

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COVID-19 has been the latest hurdle for UK businesses, regardless of their industry.

However, I would say that it is the food sector that has faced the greatest upheaval. In fact, many consumers who had previously been repeat visitors to their local stores have been forced to do most of their shopping online, due to strict social distancing measures.

Furthermore, the shift of consumers to online shopping appears to be going to last; Recent statistics have revealed that 43% of consumers plan to continue shopping online as often as they did during the pandemic, while only 18% said they would return to their brick and mortar retailers.

To meet this demand, retailers will need to adjust their operations. This may not be a big deal for larger supermarket chains; after all, they have the financial and human resources to invest in sophisticated technology upgrades to ensure efficient inventory management and tracking software, as well as efficient delivery processes. However, local retailers with lower turnover and teams may have a hard time doing this, which means they could lose the price of the online food market altogether.

Fortunately, however, it appears that a third party is setting the playing field and ensuring that retailers have access to their customers; grocery delivery app.

The proliferation of shopping apps

Third party food delivery services have been around for some time; in particular in the take-away fast food sector. However, app delivery services have been used more frequently by consumers over the past decade, with a rapidly growing industry as a result. Advisory group McKinsey predicts this sector will be worth 20 billion by 2025.

More recently, however, we are seeing more and more grocery retailers experimenting with this, partnering with delivery apps and connecting with customers in their area.

It is clear to see the attraction of such services. First, it broadens the reach of their clientele; Rather than being dependent on individuals leaving their homes during the pandemic, local retailers offer consumers the convenience of on-demand delivery services. However, a more important benefit comes in the form of sophisticated technological advances brought about by the app.

Of course, some apps are more sophisticated than others. Most are equipped with a robust POS (Point of Service) system, which facilitates a smoother customer journey. These systems allow retailers to track their sales, manage their inventory and provide easy payment methods for customers.

Others, however, go further. For example, the Grocemania app allows retailers to monitor national demand for products sold on the app and adjust their stocks accordingly. For example, a 330ml Coke product sold on the app is the same data entity even though they have different prices between different retailers. This allows retailers to obtain a product report for the 330ml CocaCola, in all Grocemania retailers, without having to use third party software. This makes product management and consumer preference tracking much easier for smaller retailers.

Evidently, leaps and bounds are being made in grocery delivery technology. However, further innovations have been made in other areas of the industry; in particular, product storage systems.

Darkstore on the rise

Technological advances within the food industry have been monumental. That said, other factors also influence the success of the industry. In particular, the convenience and cost for the consumer. And the dark shops seem to be the missing piece of the puzzle.

Dark shops are local distribution centers, where food retailers can stock their products; offer an affordable storage solution for suppliers. Therefore, it is not surprising that more and more grocery delivery apps are entering this industry.

The emergence of grocery apps within the dark shop market benefits all parties. From an app perspective, it gives them the purchasing power to buy high-quality products at wholesale prices and more autonomy than the products they sell. For the retailers themselves, they enjoy the promotion that comes with being on a high-profile app and accessing a wider range of local customers. Meanwhile, customers enjoy more efficient service and access to high quality local products at a reasonable price.

Grocemania is certainly quite new to the game with this one, having launched our first dark shop in Kingston earlier this month, with plans to launch a second in Twickenham in July. However, we certainly appreciate the value that dark shops have; not just for ourselves, but for local retailers and customers.In fact, all the fresh produce from fruit and vegetables to meat and fish within our dark shops are locally sourced, so it helps stimulate the economy of that region and businesses.

Interestingly, we plan to launch another 16 dark shops across the north of England in September, bringing high quality products to customers outside of the UK’s major cities.

The food sector saw a monumental change during the onset of the pandemic. Most importantly, local independent retailers don’t get lost on such developments. The rise of third-party grocery delivery apps is stabilizing off the playing field, allowing those retailers to access a larger customer base and manage their inventory more efficiently. in the next years.

AskarBulegenovin, the founder of Grocemania, is a grocery delivery platform that allows consumers to purchase groceries from local retailers via an app or online platform. Launched in February 2018, it has partnered with hundreds of UK stores including Budgens, Nisa, Londis and Costcutterstores, as well as independent retailers.

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