The Journey To The World Of Retail Business Processes
Updated: Jul 6
Agree every time a customer crosses the threshold of the store, the magic begins. The doors open themselves, inviting him inside. His favorite products always wait for him on the shelves, and pleasant discounts under the loyalty program surprise him at the checkout. Buyers evaluate showcases and installations, seeing only a small part of the company's work. Let's become a part of the Christmas miracle and get to know the other retail side, hiding behind the sales floor walls.
Before Mike enters the brick-and-mortar store, a motion sensor will signal the door to open. But that's not all. Did you know that at this moment, the retail supermarket software transmits data to the analytics department? It allows determining the level of shop traffic at any time.
The main buyer is already inside. He is feeling the smell of fresh buns. It is marketing, planned to the last detail, and the spray system's operation. Here Mike will see the results of the marketers' efforts everywhere, but this is another long story.
In COVID-19 conditions, before proceeding further, our customer should use both a sensor to check body temperature and automatic disinfectants. From the first steps in the store, an attentive client may notice a high equipment integration level. All fridges, cameras, doors, and other sensors interact to provide clients a unified experience.
Mike is taking the cart and drifting between rows. Meanwhile, cameras are recording each buyer's movement and providing information to the analytics department that defines the most popular/unpopular place on the sales floor.
All the food Mike is going to buy is part of the store's product catalog. It is periodically updated by:
adding new types of goods;
exclusion of the least cost-effective goods;
Of course, the last one is the most frequent change, depending on the general market conditions, deals with suppliers, and associated costs (like shipping). The addition or exclusion of certain goods from the assortment is accompanied by legal procedures (conclusion or termination of a supply agreement) and directly related to the demand.
All aisles in the store obey a certain organization. Retailers have client-oriented space planning software to keep their supermarket industry business processes efficient. These systems use planograms to reflect the physical store structure and determine where products should be placed. The most widely used products are Quant Retail and SmartDraw. Such digital solutions work closely with the assortment management system (AMS). Talking in plain language, this grocery store software defines what products in which quantity will be on the shelves. Among the ready-made products purchased by retailers are Oracle Retail Merchandise Planning Optimization and Logility Solutions.
The system sets how exactly product lines will be placed in the store, considering:
number and capacity of shelves, etc.
Thus, in the tea aisle, Mike can see lots of "L" tea packages at eye level. They are much more expensive than "G" tea, which is in limited quantities on the lower shelves. He knows that, most likely, there are two reasons for it:
agreements between the store and the "L" tea suppliers;
"L" tea is much more prevalent in this location than "G" one.
It was easy for our customer to see how many teas "L" and "G" cost due to the electronic price tags. They allow seeing the product's name, batch number, price, pricing date, etc. This approach speeds up retail transformation. Employees can update product catalog information in a matter of hours and make it always relevant to buyers. As a result, the staff has enough time to perform more complicated tasks, and the client will see the same price in the check as on the electronic price tag. He will never feel cheated by this company.
In case the customer does not find the price tag, another convenience awaits him — devices on the walls that can scan the product barcode and reflect its price. Not only the satisfied client but also the company's management get benefits from using such equipment. The retailer can track which items were not purchased because of the high cost, for example.
Let's go back to Mike, who has already walked through several aisles and put products into the cart. At this minute, the store employees are getting notifications about the necessity to add on shelves the cake, cheese, and convenience foods that Mike has just taken. By the way, it is also the assortment management system's work. Here the retail supermarket business process is designed so that the assortment management system is integrated with the human resources management system, providing a quick staff response to the decrease of goods on the shelves. Therefore, in 5 minutes, relevant gaps on shelves will be filled with new products.
Moreover, the AMS integrates with the warehouse management system (like SAP EWM, Oracle Warehouse Management Cloud, Odoo Inventory) and activates the sold product unit's automatic ordering. If the quantity of such goods is limited in the warehouse, the logistics system begins to operate. To bring a new batch of products, the last one should also consider agreements with suppliers. So, the legal department also takes part in this process to support it.
Walking through the brick-and-mortar store, the buyer is coming across shop counsels assigned to a particular aisle. They, as well as back-office employees, keep retail supermarket business processes. To regulate staff activity, companies use human resources management systems (HRM). The most popular vendor solutions are Fuse Workforce Management, Human Resource Suite. The software generates shifts, work schedules for each employee, considering his qualification and current legislation. Specific key performance indicators and targets help specialists to work effectively and grow professionally.
Meanwhile, Mike has already collected a full cart of groceries and is heading to the checkout. He hates queues, just like all of us, because they take a lot of time. Besides, today it is also an unsafe crowd of people. Fortunately, the store has a queue management system (like Qminder or Leyline). This software allows recording how many customers are waiting for service at checkout, defining their waiting time, and distributing all customers evenly among the checkouts.
The cashier has served a small queue, and now Mike is putting all his products on an automatically moving belt. He knows a lot about how the retail business processes model works. Therefore, the penultimate stage of the purchase for him is much more than just payment for the goods.
The place where the cashier works is the Point of Sale system (Shopify POS, Heartland Retail, Lightspeed Retail). It enables an employee to conveniently and quickly serve customers since service provision speed is the core principle of retail business activity.
Point of Sale of just POS is a set of software and hardware, such as the above belt, electronic scales, barcode scanner, payment terminal, computer, tax recorder, etc. Cashier John is using such equipment to punch Mike's products. Do you remember the assortment management system? At the checkout stage, staff can track on which shelf the scanned product was lying. It's possible because of AMS and POS system integration.
But the question remains: who was buying the convenience foods, cake, cheese, and so on for New Year's Eve. It is necessary for a retailer to take a personalized approach to increase sales and retain customers. Knowing who exactly bought the cake at the end of December 2020, the store will most likely order one unit more from suppliers by the end of 2021 and offer the client to buy this cake through communication channels. Based on his previous shopping experience and psychological implications, the customer will probably buy this cake again.
Once after scanning, the cashier is asking Mike to use the store's loyalty card.
The loyalty system provides the client with bonuses. Meanwhile, the retailer gets valuable client information in reverse. Scanning a card owned by a specific customer allows the store to get an answer to the question "Who has bought a product?".
Thus, based on this data:
the CRM system forms a list of potentially fascinating goods for a specific client;
the analytics department determines which products are popular and compiles an overall picture of trends (it helps to boost a product catalog and AMS processes);
marketers change a buyer's portrait.
By giving his card for scanning, Mike is launching many processes, helping the store boost services.
Cashier John interrupts Mike's thoughts about how the retail supermarket business processes interact to offer him a sauce with a 25% discount. Retailers call it upsale. But how do employees know that a particular discount is active? It's simple. POS systems integrate perfectly with a CRM one that provides cashiers with data through a one-stop-shop interface. Thus, the software automatically reacts to the scanned product and gives the employee the data to conduct the successful upsale.
Indeed, Mike has completely forgotten about the sauce, so gladly used the offer and bought it. When the list of products is completed, all that remained is to pay for the purchase. Mike is leaning his bank card on the payment terminal, collecting the groceries, and receiving a receipt.
Meanwhile, the tax recorder is transmitting information about the purchase to the fiscal authorities. The same data helps the ERP system to correct financial statements.
So, the POS system can perform several principal functions, interacting with the rest of the company's internal systems: ERP, CRM, marketing, analytics, etc.
When exiting, the side frames are checking if Mike has any unscanned items in his bags. A motion sensor located above the door is automatically opening it. That's it. Our customer has successfully purchased the products. But after that, everything is just beginning.
The store's CRM system already contains enough data about this customer to offer him products for purchase based on his experience. Mike knows that the store will notify him about such goods for a few days via SMS messages and a mobile app. Mike loves this grocery shop. He likes the speed and quality retail supermarket business process there. That's why he has subscribed to the store's accounts on Facebook and Instagram. Earlier, Mike often ordered a home delivery using the above channels.
The retailer's omnichannel approach allows Mike to start placing an order on one device and continue on another from the very place where he left off. This grocery store is customer-centric, and all of its departments work to create positive customer and user experiences.
Our buyer is right. After two days, his phone will receive a message from the store with an offer to buy a light meal using free home delivery. In this way, the company takes care of his family's health and convenience after long celebrations. The above example of a contact center, CRM, and loyalty systems synergy keeps Mike among most of the company's regular customers.
Is The Supermarket Purchasing Process Simple?
As seen, the shopping process is simple for buyers only. The retail's task is to provide a convenient environment for people to buy more. To achieve this goal, the store tracks everything: from the shopper's entrance to each product he takes from the shelf. Today grocery stores handle a great amount of information about customer preferences. But not every company knows how to use it for the client and the business benefit.
Modern software allows finding the appropriate use of this information. Besides, it makes the company's activities logical and efficient.
And that's not all. Internal grocery store systems must interact seamlessly with each other in real-time to provide a high-grade service. The business should strive to know its audience better and apply this knowledge for good and reduce all retail supermarket processes to a common denominator and simplify them for both customers and employees. The above metrics will be the most accurate to determine a digital transformation success.