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Automated Technologies to Have Profound Impact on Grocery Retail in Canada: Feature/Expert Interview

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The food and grocery sector in Canada is fiercely competitive, presenting a landscape in which differentiation and success for its players are often defined by the slightest of discrepancies. And, given the digitization of the world around us, which has been accelerating over the course of the past year-and-a-half at breakneck speed, many of those discrepancies are being discovered via technology-enabled automation. It’s leading many grocers within the country to reassess their operations in order to identify tasks and processes that can be supported by robotic innovations and help create greater efficiency and a more seamless and convenient experience for the customer. Although this cutting-edge vision has not yet fully taken hold within the country’s grocery sector, Sylvain Charlebois, industry expert and Senior Director, Agri-Food Analytics Lab at Dalhousie University, believes that it’s only a matter of time before automation becomes a necessary layer of the Canadian grocery business.

“The digitization of the industry is a work in progress,” he says. “There’s been a little bit of discomfort around the idea for a while. It’s highlighted by a bit of a melancholic way of viewing human capital and workers on farms, in processing and so on. But the reality is that there’s a shift in mindset happening across the board. Grocers across the country know that margins are low and that they need to achieve high volume to remain successful. These factors, combined with macroeconomic elements, are pressuring those within the industry to figure out how they can compete and make sure that they don’t expose their companies to risks, especially with respect to what we just experienced through the pandemic period. During the past 18 months, 16 plants were forced to close for at least two weeks at various times. That ends up being extremely costly. So, many within the industry are exploring ways they can continue to execute work and avoid disruptions to their operations during times of crisis. And it’s hard to think of too many ways that this can be achieved beyond automation.”

Shift in thinking

Thinking around the ways that automation could be leveraged within the grocery operation has been intensifying over recent years. And it’s thinking that extends beyond the grocery aisles, impacting retail as a whole. In fact, McKinsey & Company research generated prior to the pandemic in 2017 suggested that at least half of all work activities within North American retail are technically automatable through the use of robotic technologies. Further, its data implies that 6 in 10 (60%) occupations are comprised of tasks that are more than 30 percent automatable. Fast-forward nearly five years and a pandemic later, and the general sentiment with respect to automation and the benefits it can present are becoming even more pervasive.

“Grocers and other retailers within the industry are really beginning to see the advantages of the use of automation,” Charlebois asserts. “As we continue to move forward beyond the impacts of the pandemic, many grocers in the country are going to continue to digitize their supply chains. And a big part of that digitization is going to include the increased use of robotics. The technologies have existed for a while. But, up until now, it’s been difficult for grocers in the country to capitalize on their use. The Canadian grocery sector is probably one of the most risk-averse sectors anywhere. And the risks are so high with so little room to manoeuvre. However, investors are recognizing the ways in which efficiencies and profits can be increased by approaching operations differently. And grocers are beginning to see the ways that automation can, in fact, help them reduce risks in the future.”

Enhanced strategy and decision-making

Image: Warehouse Automation

Charlebois goes on to explain that with increased consumer adoption of online channels comes even greater opportunities for grocers to speed up processes, increase accuracy and volume. However, he points to the power inherent in automated technologies to calculate and inform businesses as the most significant benefit available to grocers. The data that can be gleaned from a digitally automated operation provides grocers with the potential to plan better, develop more effective strategy and ultimately execute with greater confidence and a clearer perspective of the market and the conditions that are impacting operations.

“When we’re talking about automating the grocery business, it boils down to providing greater predictability,” he says. “Automation can help grocers more easily and precisely identify trends in the market and demand for certain product, and forecast for these changes and fluctuations more effectively. There are also many different tasks within grocery that are repetitive which can be replaced or augmented by the use of robotics. For example, turning inventory in the warehouse or on grocery store shelves. In many stores, there are multiple sections where the turning of inventory is required at least twice a day, sometimes three times a day. Automating those types of jobs can actually improve accuracy and efficiency. That’s definitely not to say that humans will at any point be eliminated from the process. But, relieving them of these mundane tasks can free up their time which can be reallocated for more strategic and meaningful roles within the business.”

Human oversight and intervention

He stresses that the role of humans within the grocery sector going forward, with the help of technology and automation, is set to become that much more important. In fact, Charlebois suggests that the grocers that take an approach involving the use of predictive analytics, anchored by human insight and savvy, will be the most successful in a post-pandemic world. The use of automation to generate critical data that’s disseminated and actioned by people within the business has the potential to help inform strategy and revolutionize decision-making. And it just happens to be a component of the grocery business in Canada that he says is in need of enhancements and improvement.

“When it comes to strategic planning, grocers themselves will tell you that there’s a lot of work that needs to be done in order to identify opportunities and capitalize on them for the business,” he says. “Perhaps the greatest opportunity that’s in front of grocers today is in reassessing how exactly they do business at all stages of their operations, and developing ways in which automated technologies and human intervention and insights can work together, each complementing the strengths of the other. It will lead them to a more holistic view of their businesses and uncover opportunities that they didn’t even know existed.”

Realization of potential

The use of robotics ultimately presents grocers across the country with the ability to optimize their workforce and increased the speed of distribution. And, in a landscape as competitive as grocery, any operational optimizations and increases in efficiency are welcome. But, as Charlebois points out, any potential improvements and enhancements that can be made to tomorrow’s grocery business will only yield positive outcomes if grocers implement them with focus and intent. Afterall, he affirms, every decision a grocer makes concerning the business should be deliberated and arrived at with the needs and preferences of their consumers in mind. Those who are able to do this, he adds, will be those who experience the greatest success and growth going forward.

“Automation, if implemented properly into the business, provides significantly more stability and allows grocers to protect their margins with increased surety. As a result, costs won’t fluctuate as much, increasing the profitability of the operation. Consequently, on the back of greater efficiencies, predictability and understanding of the market and the trends impacting it, grocers will be afforded much more time and focus that can be directed at ensuring an incredible customer experience. Increasingly grocers from coast-to-coast-to-coast are realizing the immense potential in automated technologies to achieve these outcomes and revolutionize the grocery business, from farmgate to plate.”

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Article Author

Sean Tarry
Sean Tarry is an experienced writer who leverages his unique storytelling abilities to bring retail industry news and analysis to life. With 25 years of learning, including over a decade as Editor-In-Chief of Canadian Retailer magazine, he’s equipped with a deep understanding of the unique world of retail and the issues, trends, and innovators that continue to influence its evolution and shape its landscape.

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