The integrated use of IoT sensing and monitoring devices across the food retail supply chain has opened a myriad of new opportunities for organizations to minimize loss and enhance operational agility – both of which were strenuous pain points in the past. Connectivity is worth its weight in gold in an era of uncertainty where demand volatility and customer expectations are equally high and the FDA’s new 2024 traceability regulations loom on the horizon. The more visibility retailers have into the intricacies of their end-to-end supply chain, the better positioned they’ll be to remain flexible when navigating unexpected disruptions.
Considering the food retail supply chain encompasses every stage of the distribution lifecycle from farm to table, it’s imperative to move products with a “value chain” approach that amplifies efficiency through the very last mile – the ultimate point of consumption. This maximizes the level of value delivered to customers, which translates into high-quality experiences that drive brand loyalty and, in turn, revenue levels.
Pivoting from traditional supply chain mentalities to a customer-centric value chain cannot be accomplished while relying on legacy technologies. The overarching value equation is dependent on a demand-driven approach that fosters direct alignment between on shelf availability and rapid fluctuations in consumer demand. Without innovative IoT connectivity in place, retailers lack the visibility and quality to maintain that alignment in an ever-changing market environment.
Delivering Post-Purchase Freshness With Greater Efficiency
When assessing the business impact of the food retail value chain, simplicity is the name of the game. For example, think back to your most recent trip to the grocery store. How long did the organic (and expensive) fruit you purchased remain safe to eat? If it went bad a mere two days after the “sell-by” label date despite being stored in an optimal temperature environment within your refrigerator, that likely indicates an excursion took place somewhere along the distribution cycle. Now, the moldy pack of costly strawberries must be subsequently thrown out, directly equating to wasted money that is the last thing any consumer can afford during an economic recession. Compounded at scale, it drives widespread customer dissatisfaction and diminished trust in the retailer at a time when loyalty is critical to success.
By leveraging the value chain approach driven by IoT-enabled visibility, retailers can rely on operational efficiency to ensure products remain not only safe to consume, but fresh well after the point of sale. This helps foster higher levels of satisfaction that elevate brand awareness and customer lifetime value, as well as a more sustainable business model aligned with the purchasing preferences of Millennial and Gen Z consumers.
A Double-Edged Sword For Minimizing Loss
It’s no secret that product loss is a top driver of shrinking food retail profit margins. However, with strict safety compliance regulations in play, it’s critical to err on the side of caution and ensure that every product sold is wholly safe to consume. In addition to costly fines and penalties, the ramifications of not doing the latter can pose a direct risk to community health. An IoT-driven value chain empowers retailers to efficiently minimize spoilage with equilibrium for balancing food safety with loss prevention.
Real-time visibility into critical control point (CCP) environmental settings generates the actionable insights retailers need to confirm products are entirely safe for consumption. For example, not accepting an incoming package of fresh produce because the temperature in the truck was not kept throughout the trip. Automated feedback loops delivered from interconnected IoT sensors notify associates when a particular storage setting, such as a customer-facing freezer or back-house refrigerator, moves out of its predefined range – enabling swift action to remediate the issue before it causes irremediable spoilage. Furthermore, IoT connectivity also allows employees to differentiate the safe from spoiled, removing anecdotal guessing games from the equation to reduce the rate of unnecessary waste that drives higher loss levels.
Guy Yehiav is the president of SmartSense by Digi, a provider of IoT Sensing as a Service solutions.
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