What does 2021 have in store for grocery suppliers

As we head into another lockdown, Neil Tomkins, Commercial Director at Atheon Analytics Ltd shares his insights into what 2021 might have in store for grocery suppliers.

Let’s lead with data, not opinions

We need to distinguish between data-driven and opinion-operated business. In the former, strong opinions emerge from careful analysis of data through the discipline of analytics, but these opinions are held weekly and revised as new data and analysis provides refreshed insights. The latter, strongly-held opinions are often ill-informed, drawn from myth and selective reporting of favourable measures. There is no excuse for opinion-led decisions in today’s world; data and analysis should instead be used company wide to drive solutions, rather than ill-informed strong opinion. 

We also mustn’t stop at the data itself, analytics and insight is where the true value lies. 

For example, let’s talk about cider. Cider sells particularly well in the South West of the UK - but whilst Somerset ciders sell consistently well across the whole of the South West, Cornish ciders only really sell in Cornwall. We also see that spikes in sales for two litre Strongbow happen in Wales and it would be easy to conclude that the Welsh love cheap cider. However, it takes analytical commitment to discover additional  spikes in Aberystwyth, Bangor, Cardiff, Swansea and Wrexham and realise that students - rather than the Welsh in general - have the love affair. This level of insight is what will drive action and growth. The data economy of the future will be one that has its foundations strongly laid in the analytics. 

The in-store shopper versus the online shopper

We are already seeing many grocery suppliers building out their ecommerce teams. We will also see budgets reallocated, data more widely analysed and new strategies put in place. These changes will ensure that the increasing demand for products online, can not only be fulfilled, but that the strategy is as profitable as possible. 

We should remember that many supermarkets also use their stores as the location for picking and packing ecommerce orders; it is therefore essential that data on product availability is kept as up to date as possible. Demand is now not only about how many people step into the store and buy a product, it's about knowing how much product you need to supply, in order to fulfil footfall and online orders from the same location. 

Amazon has the ability to be a big threat to online grocery. Many wholesalers will sell items on Amazon with out of date branding, incorrect details or a service that doesn’t help brand reputation. It is time for grocery suppliers to take back the control when it comes to Amazon and focus on their rankings so their own products are the ones that are seen at the top of searches. This will maximise sales and ensure more control over what is being seen, and purchased by the consumer. 

Let’s look to the future

Forecasting 2021 is going to be difficult for the entire retail industry, not just the grocery sector. Whilst there is no right answer as to which method best meets the requirements of GSCOP, some are clearly more useful than others. 

For example, an annual prediction of the volume of every product which will be purchased from a supplier is a great collaborative forecast. The problem here arises when both internal and external factors, like a worldwide pandemic, lead to the forecast changing drastically over the course of a year.

Grocery suppliers should instead

• work with retailers to combine the insights from 2020 and 2019 to get a clearer picture of what they need to be delivering in 2021; 
• collaborate with retailers to use data to track how consumers are also behaving regionally;
• allow analysis and forecasting to be done at SKU level where possible, rather than category level as some items in the same category will not behave in the same way as other items in the category in general, due to peaks or seasonality; and,
• review data daily, or in real time where possible in order to spot trends, challenges and opportunities. This insight allows for all involved to quickly make interventions and maximise sales.

Using detailed data to forecast, retailers can blend sales, stock and service information to get the best picture of true demand. This more advanced approach will lead to a better relationship between retailers and suppliers, but should the peaks and troughs of 2020 continue into 2021, everyone in the supply chain will be ready for the demand. 

If you’d like to understand more about how we can help you, please get in touch or visit www.skutrak.com to see our case studies.