FMI Releases Technology Benchmarking Report
Where would food retailers be without technology? Based on the Food Marketing Institute’s (FMI) Food Retailing Technology Benchmarks 2008 report, they’d probably be in another line of work.
“Retailers are leveraging technology to streamline operations and cut costs, enhance service and meet market demands with increasing precision,” said Pat Walsh, FMI vice president of industry and trade development, in a press release. “It’s become an integral part of the supplier-retailer relationship.”
Frequent shopper programs ranked high on retailers’ list of sales-driving technologies. According to the study, nearly half of retailers said they had a frequent shopper program and that 90 percent of their customers participated in the program.
Frequent shopper programs, respondents claimed, did lead to more frequent and profitable shopping. Nearly 85 percent of those with frequent shopper programs claimed that participants shopped in stores more often than non-card holders. More than three in four of those with programs claimed that they rang up higher gross margins on purchases made by card members.
Retailers are also beginning to make better use of the data obtained through frequent shopper programs to customize product assortments to meet the needs of consumers on a store-by-store basis.
The relationship between retailers and suppliers is also said to be benefiting from the deployment of technology. Today, the vast majority of retailers report using electronic data interchange (EDI) technology to communicate more effectively with suppliers and, in the process, reduce errors. The number of consumers using EDI has jumped from 67 percent in 2005 to 85.7 percent today.
Food stores are also making much greater use of scan-based trading. Today, half of those responding to the FMI study use scan-based trading up from 26 percent just three years ago.
Also seeing growth among retailers is use of the internet for purposes ranging from employee scheduling and training to improving the shopping experience of consumers.
Fewer than 49 percent of retailers are now using a company intranet as a resource for training store-level workers. Seventy percent use their intranet to communication human resource policies and to recruit workers for open jobs.
Discussion Questions: Which technology application(s) do you think are most critical for success in grocery retailing today? Why?