Omni-channel experts help produce industry adapt to retail’s new reality at Amsterdam Produce Summit

November 19 , 2018

Omni-channel has arrived. It is rapidly changing the way that fresh fruit and vegetables are sold, has huge implications for the future, and requires a great level of adaptation, innovation, and collaboration.

That was the overarching message from the speakers at this year’s Amsterdam Produce Summit, which took place in the Dutch capital last week. Experts from a wide array of backgrounds gave insightful perspectives on how to seize success in the new world of omni-channel through retail strategies.

Omni-channel is similar to, and an evolution of, multi-channel retailing, but is focused on optimizing the consumer experience by integrating all sales channels and making that experience as seamless as possible. It is a multidisciplinary approach to meeting consumers where and how they desire.

Below we have put together some of the key takeaway messages from each of the seven speakers. If you would like to see a photo gallery from the event, click here.

Jorg Snoeck – Founder, RetailDetail, and Co-author of The Future of Shopping (Belgium)

Presentation title: How to profit from the coming retail revolution: new consumers, new technology, new outlets for shopping

Kicking off the day’s presentations, Jorg Snoeck told Amsterdam Produce Summit attendees that traditional retail is no more, having been rendered obsolete by economic, demographic and, in particular, technological developments.

“Retail is forever changing,” he said. “The ones that can survive are the ones that can change the best and the quickest.”

He said that today there are new customers, technologies, and types of retail touch points. This scenario is leading to new business models, and culminating in thorough disruption in the supermarket industry.

Seven important trends in the shoppers of the future in Western markets include urbanization, aging, the generational shift to digital native Millennials and Generation Z, as well as the emergence of more ethnically diversified consumers. 

Each will require their own approach in marketing and retail, he said. Millennial consumers, in particular, have little time and highly value convenience and speed.

In this new world of retailing, in which robots and artificial intelligence play an increasing role, Snoeck said he believed that the people who thrive will be those who take risks and let their creativity flow.

“It’s important that we don’t be afraid of being wrong,” he said.

“We’re running our companies like this – we stigmatize mistakes and bring people out of their creative capacities. I really believe that our only hope for the future is by seeing our creative capacities and that we learn how to build on the enrichment of human capacity.”

Stéphane Roger – Global Shopper and Retail Director, Kantar Worldpanel (Spain)

Presentation title: Finding Growth in Reinvented Retail – 10 Elements to Win Omni-Channel

Stéphane Roger explained that the significant changes in the retail sector have had two consequences. One for the retailers themselves, who have been forced to forced to reinvent their strategy and business model, and another for manufacturers, who have been struggling to generate growth in much more complex environments.

He provided 10 views the produce industry should take into account to find new ways to grow in an omni-channel environment, including that the big growth in CPG (consumer packaged goods) is over, and that companies should invest in convenience and value-for-money models.

In addition, with traditional supermarkets and hypermarkets on the decline, companies should aim to build within a fragmented growth in the world of retail, targeting specific types of sales channels.

For instance, he explained that e-commerce is booming with 16 percent growth, and other value models such as discounters and cash-and-carry are rising by five percent. Value strategies are therefore essential for growth.

Other points included the need for a “synergistic omni-channel approach” that focuses on attracting new shoppers rather than getting more loyalty from the present ones.

He also said that the aging global population will be an important demand driver for fruits and vegetables.

“Fresh becomes more relevant as the population gets older,” he said. “We’re talking about 2.1 billion people over 60 in 2050 – we are at 600 million now. So massive growth is possible with produce at the center.”

Along with changing demographics, technological developments and the greater use of omni-channel will continue to create new opportunities. As he put it: “E-commerce is the new playground.”

Loren Zhao – Co-founder, Fruitday (China)

Presentation title: Embrace the New Retail and New B2B in China

Loren Zhao, who before taking the stage was presented with the Produce Business TrailBlazer Award, spoke about some of the most significant changes in the Chinese retail sector over the last few years.

When he co-founded Fruitday as an e-commerce site a decade ago, the e-commerce industry was just beginning in China. But he explained that the speed of evolution and digitalization of the retail space in China has been astonishing.

Zhao highlighted that China is leading the world in mobile payments with smartphones, which consumers can connect to their bank accounts through apps like WeChat. In many cities, people can even buy a drink at a street stand using their phone.

“With a mobile phone you can do everything,” he said.

The ‘New Retail’ concept, as it is known in China, has dramatically blurred the lines between online and offline, combining the best of both worlds. Fruitday now offers a range of formats to purchase fruit, including at small self-service stores and at vending machines placed around the city, which detect which items have been taken from the shelves and charge the customer automatically when the door is closed.

Home-deliveries have also become important in China, with many companies and retailers now offering delivery within just 30 minutes of placing an order.

A more recent trend is the emergence of companies that had been focused on B2C (business-to-consumer) models now developing B2B (business-to-business) platforms.

For foreign companies that supply fresh produce to China and would like to better adapt to the new retail environment, Zhao had some advice – come and visit.

“There is a lot of news happening here. We already hear about news from [e-commerce giants] Alibaba and JD, but when you see it, it’s different,” he said.

Miguel Gómez – Associate Professor, Cornell University (U.S.)

Presentation title: Omni-channel Strategies – Implications for the Produce Sector

Miguel Gomez spoke about opportunities for the produce supply chain in the new world of omni-channel retailing, highlighting that fruit and vegetables are still critical for both the shopping experience and retailer differentiation, online and offline.

While retailing has changed dramatically over the past two decades due to the advent of the online channel and ongoing digitalization, he said that until recent years the impact had been less disruptive on food retailing and produce.

“The produce industry will need to learn how to be omni-channel, too,” he said, explaining that a great amount of innovation was needed in order to make the supply chain what he would term as “omni-functional”.

Gomez also emphasized the need for increased collaboration across the entire produce supply chain and for planning ahead.

The supply chain must also become much more flexible than it is now, he said, as it needs to deliver in many different forms, more frequently, in the omni-channel world.

In addition, the produce industry must strive to manage integrated channels to make interaction with buyers as “seamless and easy as possible” and help retailers with differentiation so that they can operate successfully in the digital marketplace.

For retailers, quality and assortment of produce are paramount, he said, adding that produce packaging will be another important component at the high-end and low-end.

Overall, the new omni-channel world “will imply very, very big changes” in supply chain and inventory management, which will require much greater investments in technology and making decisions based on data.

Rand Waddoups – Senior Director of Omnichannel, Walmart (U.S.)

Presentation title: Ways to Build E-commerce Synergies With Produce

Rand Waddoups began his presentation by saying: “There’s one thing that’s really clear to me, and it became even more clear today. Produce is on the cutting edge of what has to be done to create the omni-channel experience that we want.”

He said those in the produce industry must view their business through an “omni lens” in order to help suppliers and retailers reduce friction for the consumer, thereby improving the consumer experience.

Waddoups provided several tactical viewpoints on what the produce industry can do to adapt to the new retail environment, which included focusing on online item content – such as images and descriptions – and finding ways to improve quality not just before it reaches the store shelf but also on its way to people’s homes.

He also highlighted the importance of consistency between products on all sales channels and of striving to have everything that is available in-store also available online, and vice versa.

Something else the produce industry should do is familiarize itself with the broad array of “omni tools” that help to merge consumers’ offline and online experiences. He highlighted how Walmart began integrating the physical and digital areas of the business with services such as Walmart Pay, Express Money Services and Express Returns, and now it is launching other platforms such as Store Assistant and Store Maps.

“I really wanted to make sure you had that visibility,” he told the audience. “Because it’s important that you recognize where we are going as retailers. We are going to need your help to get there – as suppliers, as industry representatives.”

He added that close partnerships between industry suppliers and retailers matter “a tremendous amount” in the omni-channel world, as any spot that fails will create friction for the consumer.

Tim York – Cooperative President, Markon Cooperative (U.S.)

Presentation name: Reducing Friction in the Foodservice Supply Chain

Tim York gave attendees some insights on omni-channel in the foodservice industry. He said the sector is slowly becoming more omni-channel, but noted that for many businesses it was still a “very new concept”.

He said foodservice companies operate in a cut-throat environment and face challenges related to implementing omni-channel strategies, such as order management – not letting online orders impact restaurant orders – and ensuring that the food arrives at people’s houses in good quality, which he highlighted can be especially tricky for some products like fries.

To be successful in omni-channel, he said foodservice companies would need to be seamless in their integration of sales channels and add both more convenience and excitement.

He also said it was important to provide customer solutions in ways that are easiest for them, with big data as the foundation on which to develop these solutions.

In the future, York expected to see an elimination of third-party delivery and third-party apps, as foodservice companies seek to deliver the food themselves in order not to hand over the brand stewardship to an unknown entity.

He also expected there would be a broader adoption of omni-channel strategies for all segments, greater use of data tracking to personalize the consumer experience, and increased consolidation in order to be able to deliver many of these services.

“Omni-channel’s going to get more difficult before it gets easier for restaurant operators, I believe, because so many restaurant chains these days are moving away from a company store model, where they’ve got some franchisees, to almost exclusively franchisees,” he said, explaining this aspect creates problems in terms of ensuring efficiency across the chain.

Lisa Cork – Director, Fresh Produce Marketing (New Zealand)

Presentation title: Fresh Produce & The Omni-Channel Challenge

Lisa Cork started her presentation by highlighting the discrepancy in consumers’ omni-channel experiences, as demonstrated by polarizing online reviews. But she said: “What we know, what history teaches us, is once this fundamental change has started, it’s here to stay.”

Cork said fresh produce is “incredibly unique”, and that that uniqueness impacts its ability to be successful “in a normal way” in an omni-channel environment.

She believes that, with the notable exception of China, the current omni-channel environment is bad for brands, as it often results in the loss of brand story – and therefore premium pricing – while also creating opportunities for retailers to create their own private label.

“A brand is a proxy for a grower who’s invested in differentiation, and that differentiation has to be honored,” she said.

It is also essential to consider other aspects such as how brands are displayed online and on mobile devices, and, with the rise of Generation Voice, companies must also consider the vocalization of their brand names and how easily they could be found using a voice search.

Cork went on to explain that there was a vast contrast between the perspectives of retailers, many of whom feel under heavy pressure to implement omni-channel strategies and boost their online presence, and suppliers, many of whom are reluctant to make that leap into the omni-channel world.

“The reality is that, right now, it won’t be perfect, but you have to jump in and be part of the omni-channel environment, and you cannot be afraid to fail,” she said.

“Stop referring to this as new or disruptive and start thinking strategically about how your brand and company will thrive in the new norm. If you are not actively thinking about how omni-channel will impact your business, your sales, or your brand, truly I believe that you are already behind.”

 

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