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Responding to Michael Sansolo’s column yesterday, MNB reader Bob Wheatley wrote:

Keeping an eye on leading players is important. So also is getting ahead of shifting technologies.

Will say once again that the entire food industry, both retail and CPG, was late to e-commerce — and now let’s hope not late to adoption of blockchain technology that could very well revolutionize the business of food.

Imagine a time when the quality and authenticity of food, the ingredients — the entire product creation process could be digitally verified to guarantee freshness, ingredient integrity and safety from farm to dinner table.

Walmart is already on the move to adopt this technology. Now we see Nike creating patents to bring a proprietary deployment of blockchain in verifying how their shoes are made.

Yet this tech isn’t reported on much in the industry. It will change how brands are made, marketed, sold and how food safety tracking is is resolved in seconds not days.




Yesterday we took note of a Wall Street Journal report on how “retailers that have been turning to robots to handle inventory in warehouses are testing whether machines can handle a new task: detecting when store shelves need restocking.”

What I found to be alarming was the part of the story saying that “more than three-quarters of respondents to a survey released this month by supply-chain software maker JDA Software Group Inc. said they aren’t able to track inventory in real time, and 55% don’t have a single view of product levels across distribution channels.”

I wrote:

Any out-of-stock is a potential lost sale, and not knowing what you have and where it is strikes me as an enormous problem that has to be addressed.

One MN reader responded:

I am shocked that you are shocked! I'm the last 25 years, grocers have seldom made the investment in item data quality and inventory data accuracy in terms of technology or business disciplines. It has always been "close is good enough". Although close was often defined as +- 5%!

As a result, most major system installs and M&A integrations have to start with painfully slow data fixes, that are high cost and have almost no standalone value. Operating discipline and data accuracy have never been a cause for leadership...until now, when someone (Amazon) broke the rules.

This is even more fundamental than collecting good customer data and using it to drive results! You could even call this an eye-opener!


MNB reader Monte Stowell wrote:

Having been in the food industry for 55 plus years, and recently retired, I spend a bit of time in several retailers here in the Portland, Oregon market, and the one issue I see all the time in Albertsons, Safeway, Fred Meyer, Walmart, and Target are large amount of out of stocks on any given day. Target is the worst for out of stocks, and the 4 aforementioned grocery chains have their out of stock issues as well. Winco is the best in stock retailer of all major chains.

I think one of the issues is due to tight labor costs, too many people who have not been mentored or trained properly to order product demands for ads, lack of having hot ad items not on display, not enough store deliveries from their DC’s, etc. I have talked to many people in the stores and they tell me that often times, centralized procurement tells them what they will be receiving.

Technology is amazing with all the information available, but it is still a human being that makes product available for the consumer to buy in store and to have a positive shopping experience.


Walmart was cited in the Journal story as a company grappling with this issue, which prompted MNB reader Mike Bach to write:

Another place Walmart could turn to get some lessons on in-stocks is none other than from their own Massmart subsidiaries in South Africa. 

Long known as one of the retail markets where in-stocks are strong, stocking clerks are often posted in each aisle during key shopping periods, and replace product (from backroom or inventory on top shelves) as soon as an item is placed in the shoppers cart.  Its not a perfect system to be sure.  But, in a country that understands the importance of jobs to the overall economy, these stockers have a strong understanding of what sells, when and how much inventory that store needs for upcoming sales periods.  
 
I understand the argument for AI-driven solutions.  And, that the market comparison may not seem relevant to some. Still, there’s a strong correlation to putting more employees in a store and seeing improved in-stock levels.




Finally, regarding the passing of former Safeway and San Francisco Giants CEO Peter Macgowan, MNB reader Bryan Silbermann (the retired CEO of the Produce Marketing Association) wrote:

Sad news about Peter Macgowan. Your comment "how he liked to sit in the stands and interact with fans rather than sit above it all in luxury suites” extended to the way he ran Safeway, too.

I recall doing a presentation to the Safeway produce team about 30 years ago. After walking to the riser to begin speaking to the 75+ leaders of the produce team gathered from across North America, I looked to the back of the room and noticed that Peter had walked into the room. He stood quietly at the back for the whole of my presentation, listened attentively to the Q&A afterwards, and then thanked me outside as I left. When I asked Bob Backovich, the Safeway VP of Produce and Floral, if Peter made a habit of unannounced arrivals at team meetings he replied: "All the time. He likes to hear things firsthand from people on the customer frontline.”

KC's View: