The Digital Transformation of The Grocery Retail Back-Office

In an era characterized by constant technological change and frequent disruption, it can be difficult to take a moment, step back from daily grind, and reflect on where you've been and how far you've come. But doing so is essential to charting a path to your future success.

Over the past 10 years, grocery retail back-office solutions have experienced unprecedented digital transformation. Let's take a look at what's changed, the effect it’s had on operations, why it represents progress, and how it has created new business opportunities.

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1) No more manual price entry. A decade ago, most grocery back-office teams included between six and eight members responsible for keying in new pricing data. That included cost changes and any allowances or deals supplied by the wholesaler or vendor. Time-consuming, labor-intensive, and susceptible to operator error, this process has received a significant upgrade, courtesy of the retail industry’s shift to automation.

Grocery retailers can now import price and cost changes into the back office system, quickly updating the information and allowing swift reaction to market changes. This has delivered real labor savings while helping retailers enhance the customer experience. More reliable pricing updates mean fewer unpleasant surprises at the cash register. 

2) Back door loopholes, closed. Thanks to direct store delivery (DSD), or back door receiving, what once relied upon the honor system and pen-and-paper accounting is now almost 100-percent data-driven. Instead of visually inspecting pallets and checking items off a list, receiving clerks can now verify vendor deliveries using a handheld device that scans product barcodes. The scanned information is then reconciled against a digital purchase order.

These digital links between invoices and purchase orders have effectively revolutionized how grocery retailers handle inventory. Imagine a delivery of sodas arrives at your store’s back door. You’re expecting 35 cases of regular cola and 15 of diet cola. However, the vendor has shipped 38 cases of regular cola and 17 of diet cola. Whether it’s an honest mistake or the vendor trying to offload excess inventory, digitally catching the mistake upfront means you don’t tie up valuable storage space with inventory you might not sell before its expiration.

3) More system integrations, more collaboration, more strategic advantages. Yesterday’s digital retail solutions ran in the back office on aging PCs with proprietary operating systems and one-size-fits-all office applications. Today’s digital solutions, on the other hand, are centralized, cloud-based, customizable, and exponentially more powerful. SaaS-based enterprise software, hosted applications, and the development of APIs have all helped business owners truly modernize their legacy systems. In the process, these technological advancements have empowered businesses to operate with greater efficiency and agility.

Take, for example, how today’s data synchronization functions. Even a 10- to 15-store chain with a retail management system, an HQ database, and location-specific POS implementations can make system-wide updates in 20 to 30 minutes as opposed to 2 to 3 days. Most importantly, the expedited communication of product information allows stores to rearrange their shelves in response to real-time market conditions, thus accelerating revenue cycles.

Integrated systems also support more strategic decision-making. Let’s pick up from our previous example. Once that shipment of soda has been received, how is that information routed to your accounts payable staff? Being able to populate your accounts payable software electronically with the most accurate information makes revenue reconciliation much less arduous.

Of course, vendors who get paid faster are happy vendors. But, perhaps more importantly, you’ve also made the flow of goods from your grocery back-office to your customers more visible to internal stakeholders. Should problems arise anywhere within this supply chain, you’ll have more information available with which to resolve them.

4) Real-time, platform-agnostic business intelligence. A sports analogy might be helpful here. Reporting in grocery used to be comparable to the box score printed in the newspaper the day after the game. If you wanted to know the outcome and how well your favorite player performed, you had to wait (unless you were at the stadium yourself).

Today, you don’t even have to record the evening sports broadcast to see the highlights. You can be notified the moment your rooting interest is about to score and instantly switch over to a live stream and watch the action unfold regardless of whether you’re parked in front of a TV set, catching up on email using your tablet, or scrolling through your news feeds on your phone. 

Similarly, retail management systems now put information at your fingertips. If you want to monitor sales by register in 15-minute intervals, you can. If you prefer to have that information available to you via a mobile app, the system can accommodate that. If you need to drill down, zoom out, or run a historical comparison on a data set, that’s possible with a few clicks. These aren’t just cool features, either. They represent an evolution in infrastructure. As a result, store managers and store directors are making smarter decisions, faster.

Even if your business isn’t yet taking full advantage of this transformative technology, you’re experiencing its effects. Just look at how the competitive landscape has altered in the past two to three years. Retail is rebounding after years of losing market share to e-commerce, and the ready availability of timely and actionable business intelligence is one reason why.

5) Well-defined user roles safeguard data security. Two of the key digital transformations of the past 10 years have been in the areas of cybersecurity and compliance. Now, virtually every back-office system features built-in user roles and permissions management. This extends beyond serving different dashboard views to scanning coordinators and cashiers when they log in. It also includes data encryption, two-factor authentication, and comprehensive logging of system activity.

Compliance starts with ensuring that only the right people can access the right data, at the right time and in the right way. Software engineered to meet the oversight needs of retailers gives your back-office personnel the tools they need to reward your customers’ loyalty, preserve your brand’s reputation, and protect your bottom line.

If the past decade is any indication, digital transformation of the retail back office is a reality that will continue for years to come. Today’s grocers can choose to be an agent of that change or be at its mercy. The experts at TRUNO have the knowledge and expertise to help guide you in your journey of digital transformation today and for years to come.

Learn how TRUNO can help your business complete its digital transformation.



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