CIOs Deal With A Revolution In Grocery Stores

Food shoppers are going online and CIOs have to prepare for their arrival
Food shoppers are going online and CIOs have to prepare for their arrival
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CIOs who work for grocery store chains are undergoing some significant changes in their lives. It used to be that being a CIO who worked in the grocery business allowed you to focus on such issues as the delivery of items to stores, current inventory levels, and the tracking of food shipments when a contamination was detected. However, that has all been changed. Every year in the U.S. consumers spend over US$800B on grocery store food. More and more of that spending is starting to go online. Grocery store CIOs need to understand the importance of information technology and adapt to this change or risk being left behind.

Changes In How People Shop For Grocery Store Food

What grocery store CIOs have realized is that the layout of a grocery store has to be fundamentally changed in order to be able to continue to exist in the new world that we find ourselves living in. This can include doing such things as removing racks of snacks and other very profitable impulse purchases that grocery stores traditionally keep by their doors. Instead, these areas are now being filled with freezers that are being used as pick-up points for grocery customers who will use their mobile phones to order groceries online and will probably never go any further into the grocery story than by the front door.

The person with the CIO job understand that their grocery customers now want to shop for groceries online instead of pushing a cart up and down aisles in a store. This means that it is up to the CIO to transform the store in order to meet this new breed of customer’s needs. People in the CIO position are adding online options such as instore delivery, home delivery, and curbside pickup. The CIO understands that his or her grocery store is now competing online with the likes of Amazon and Walmart for customer’s food dollars.

Grocery stores are in the process of changing just about everything about how they operate. This means that the IT systems that handle how they perform staffing, how their supply networks operate, to how they organize their parking lots and stores are all undergoing fundamental changes. All of these changes are happening even as the physical stores are being challenged to keep up. The changes that are happening in the grocery business right now are the biggest changes to sweep through the industry since the introduction of bar codes.

CIOs realize that currently e-commerce represents less than 5% of U.S. grocery sales. However, online food and beverage sales are growing faster than in traditional grocery stores. $26.7B was spent online on grocery items this year, next year it is anticipated that $36.5B will be spent. Grocery CIOs were already making changes to how they do business when things started to speed up. Walmart purchased the e-commerce site and Amazon purchased Whole Foods. Both of these actions have caused grocery store CIOs to speed up their new technology adoption plans.

How CIOs Are Adapting To The New Way Of Shopping For Groceries

One of the first things that CIOs are doing in order to help their firms move into the online world is to remodel the grocery stores. Their goal is to create spaces that will allow them to better accommodate online ordering. This can include such things as making the front of a grocery store wider so that they can accommodate more racks and refrigerators. The changes extend out into the parking lot. Grocery stores are starting to reserve parking spots for customers and delivery services that are trying to quickly pick up online orders. Some grocery stores have added checkout lanes that can be used to ring up orders from third-party online grocery-delivery services.

CIOs at food makers have seen the changes that are happening and are starting to take action. They want to make sure that their customers will be able to find their products when the go shopping online. Next, they would like to be able to track how their products flow from retail locations to the customers’ homes. The result of having this information means that the food makers may start to replenish stocks at some stores around the clock in order to prevent any outages. The reason that they are doing this is because studies have shown that 50% of online orders are being placed at night. Retailers tend to package pick-up orders during off hours. The packaging of some products is being changed in order to make it lighter and to prevent it from being damaged.

CIOs do realize that with the new focus on online sales, they need to be careful. There is a risk that by spending so much time and money to get set up to handle online sales this can all start to detract from the experience that shoppers have when the visit a physical store. The reason that this matters so much is because for at least right now, the physical stores are the part of the company that is generating the most money. Problems can include clerks who are completing online orders can start to block aisles. Likewise, the best produce can be picked over by the time in store customers come shopping.

What All Of This Means For You

Grocery store CIOs are seeing their jobs change right before them. What used to be a fairly straightforward job has suddenly turned into a cutting edge position where the CIOs decisions may determine the future success of the company. The arrival of online shopping has changed just about everything to do with the grocery business – something that nobody saw coming.

CIOs understand that the arrival of online shopping is going to change everything about running a grocery store business. This means that they need to change the layout of the grocery store, the parking lot, and how their supply lines operate. Grocery store CIOs realize that they are now competing with the likes of Walmart and Amazon. The changes that are sweeping though the grocery business are as large as when bar codes were first introduced. Currently the e-commerce grocery business only represents a small part of how we buy food; however, this part of the business is growing rapidly and will soon take over the more established parts. In order to meet the new needs placed upon them by online food shopping, CIOs are remodeling their stores to meet new needs. CIOs at food makers have seen the changes that are happening and they are also working to adapt to the new world order. CIOs realize that there is a risk in spending too much time working on e-commerce because the majority of food is still being bought the old-fashioned way.

Grocery store CIOs are currently facing a significant challenge. The way that they used to conduct business has been completely transformed by the arrival of online e-commerce. What this means for everyone involved is that the old way of doing things now have to be replaced with new ways. CIOs are searching to find the right balance between getting ready for the future while still meeting the needs of today’s customers. We’re going to have to watch them carefully to see if they can balance these conflicting demands.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How much of their time do you think that grocery store CIOs should be spending getting ready for online sales?

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What We’ll Be Talking About Next Time

So it turns out that restaurants have CIOs also. These CIOs are tasked with the challenge of understanding the importance of information technology and finding ways to use IT resources to make the restaurants that they work for even better than they already are. In order to make this happen, restaurants are going to have to collect a great deal of data about their customers and then use big data techniques to turn that data into knowledge that the restaurant can take action on.