The events of the past year have sparked a permanent redrawing of the retail landscape, with online grocery sales soaring 91% year-on-year in a four-week period alone in 2020 and over 17 million Brits planning to stick to online shopping even as lockdown eases.
With three quarters of the UK now shopping for their groceries online, consumers have become more discerning in what they expect from eCommerce platforms. A smooth, friction-free journey is standard; the slightest glitch may send customers into the arms of competitors in a hugely saturated market.
F&B brands have responded with fast-paced innovation, realigning the parameters of the industry at breakneck speed. Supermarkets such as Waitrose rolled out drive-through services, while fine dining restaurants turned to at-home meal kits and upstarts such as Uber Eats stole market share in app-driven coffee orders from the likes of Pret and other stalwarts.
Tech is the powerhouse behind this step-change, allowing new, cloud-enabled solutions and shared APIs that connect supermarkets and restaurants to delivery platforms. Here’s what businesses in the F&B space – large and small – can learn from the Covid digitisation curve:
1. Embrace agile models
In terms of business agility, it used to be that the big fish ate the small fish – but coronavirus has shown us that it’s the speedy fish that now takes all. As a leading F&B brand, you might have the most sophisticated software delivery in the world; but that means little if it’s not lean and nimble enough to adapt to sudden change.
In some cases, this will involve fast-tracking existing digital plans. Bacardi, for example, ramped up its two-year eCommerce strategy in the space of two weeks following lockdown last year, with a combined cross-brand effort that drove a 400% YoY spike in online sales.
In other scenarios, it will involve building a greater level of flexibility into existing structures. Take Co-op, which launched a daily triage system after the coronavirus crisis set in, to connect their customer service teams to what was being talked about on social channels. By keeping close track of customer conversations, Co-op had instant vision on where and how to amp up digital innovation.
Integrating robust data analytics into your business plan is also key. RetailZoom, a consultancy that helps supermarkets in Cyprus use data forecasting, says that clients with a well-modelled anomaly dashboard were able to respond quickly to the fast-moving shifts of the pandemic – because it allowed them to spot atypical behaviour in real time, as it emerged.
Coronavirus has shown that F&B wavemakers cannot afford to spend years plotting their eCommerce strategy. Swift execution, with the ability to pivot where needed, is key to success in a volatile market. And this agility comes from tech-enabled customer listening, along with a structure that enables rapid response.
2. Develop a healthy engineering culture
There is a tendency to view the techies on the front line who run the sites – or Operations as they are known – as an insurance policy. If a change to the website is made, such as a special offer, driving a surge in visitors and the website subsequently goes down at 3am in the morning, they know they are the people who are going to get called. Slowly but surely this creates a resistance to frequent and unplanned changes as it is their job to ensure the site is available. Simply put, the equation is less change equals more stability.
The easiest way to combat this is to create a culture that values the Operations team and enables them to buy into the bigger picture. Rather than treating them like on-call plumbers, explain how their task relates to the entire enterprise and drives it forward. Make it clear that their contribution is game-changing and they are more likely to embrace the overall project – even if it means unsociable hours. By ensuring mutual ownership and early involvement everyone should benefit from the sensibilities of Operations – avoiding the 3am emergencies altogether.
One of the big winners during the pandemic, for example, has been Ocado, which managed to grow its business significantly while also transitioning from a partnership with Waitrose to a new alliance with Marks & Spencer. In tech terms, that is roughly equivalent to rebuilding an aeroplane while still in flight – and suggests a firm with a healthy engineering culture.
Ocado’s strategic positioning and investment underlines the emphasis it places on engineering. While the punter answering the front door may think of Ocado as a pure play delivery firm, the company actually sees itself as a tech solutions provider to the retail sector. Analyst Peel Hunt even goes so far as to suggest Ocado could become the “Microsoft of retail”. With the recent creation of a moonshots division, Ocado also plans to deploy its tech across vertical farming, baggage handling, containerisation and more. None of that would be possible unless the firm created the conditions for a vibrant engineering culture to thrive.
3. Anticipate and prepare for scale (aka success!)
One of the big stories during Covid-19 has been the devastation caused to commerce – but keep in mind that the pandemic actually created a business boost for some brands. Budget retailer B&M performed well, as did delivery services Deliveroo and Just Eat. Both of those might seem like predictable winners in a time of belt-tightening and lockdown, but there were also interesting cultural shifts. Huge growth in oat milk and meat alternatives suggests a level of reflection among consumers about how they might adapt their eating habits.
Translate this into tech terms and what we’re really seeing is companies that were built from the ground up with scalability in mind. A common mistake when building a digital solution is to focus obsessively on development and launch – without thinking deeply about how robust or secure a tech solution will be under severe stress.
The best way to counter this build-up of ‘technical debt’ is to create a transparent DevOps culture, where the tough engineering questions are asked up front instead of being left to fester. A classic scenario might be as follows: the company goes to its developers and asks them to initiate a project quickly. The typical developer response is to use the tools they’re most comfortable and familiar with, rather than the ones that suit the job at hand. Some light operational oversight is a way of trying to head this problem off at the outset. It’s worth bearing in mind that ‘functional’ requirements delivered up by developers – such as software being able to list products on offer – usually involve ‘non-functional’ requirements for operations – the list of products on offer needs to scale to x amount of users. Fulfilling non functional requirements is an opportunity for operations to add value, to ensure the site performs, scales and is secure.
Returning to Just Eat and Deliveroo, it’s evident that their success during Covid-19 isn’t just because everyone has been stuck at home. It’s because they started building robust tech solutions years ago, in anticipation of growth. Just Eat has perfected a way to run DevOps at scale while Deliveroo has created a fearless reporting culture and a unified view that tracks all goals related to initiatives – in the same place using the same language and measurement.
4. Push continuous deployment cycles
In a sphere where change is constant and consumer expectation is sky-high, one big leap forward is no longer enough for F&B businesses. Anyone who wants a world-class digital strategy at their fingertips needs to use tech in a way that’s consistent and iterative.
Take Amazon, the one-time bookseller that clocked up $75.5 billion in sales revenue in the first quarter of 2020 alone. Despite comfortably holding its position as the world’s top ecommerce company by quite some distance, Amazon is constantly competing with new tech segments. For example, with Smart Home growth continuing under lockdown, Amazon has announced dozens of new Alexa products and integrations. Only last month it launched Alexa Custom Assistant, which opens up its proprietary technology to a whole new audience of third-party manufacturers. Amazon manages thousands of releases a day – their rate has increased many times over and is widely known to be anywhere from a release every 11.6 seconds, maybe as frequent as every second! And you don’t need to be Amazon to benefit from continuous deployment. Take a look, for example, at the massive growth achieved by wholesale food distributor Gordon Food Service using the Google Kubernetes Engine.
F&B brands need to constantly push features, integrations and developments but to do so in ways that don’t cause knock-on tech issues which disrupt the user experience. By embracing a lifecycle approach to innovation, developers can look at problems or improvements in isolation, and break them down into digestible pieces – for example, they can examine release management according to region, types of consumer or even the time of the year. This means they can deliver solutions faster, in a more cost-effective way and with greater quality assurance. Continuous development cycles are underpinned by the right architecture, technology and tools. Ultimately though, they rely on F&B brands nurturing an engineering and innovation culture to create the fast feedback loops which are fundamental to agility.
As F&B providers weigh up an uncertain future, the pressure is on to develop great customer experiences via fast feedback loops and seamless product releases. If supermarkets and smaller brands are agile enough to adapt their digital inventory in line with a forensic user-focus, they are well placed to navigate any storms that lie ahead.