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Out of the Comfort Zone

Retailers face major changes in their businesses—from emerging technology to shifting consumer needs—and they need to think differently about navigating them.

Retail is in new territory. 

Leaders are facing unprecedented choices about emerging technologies, dramatically shifting consumer needs and workforce transformation. Food and drug retailers need to create new roadmaps to understand these changes and identify how to stay ahead of them. 

The challenges were explored at the recent FMI Midwinter Executive Conference, a gathering of senior food industry leaders that includes retailers and suppliers. 

Here are some of my key takeaways for retailers after hearing speaker presentations at the conference. 

Become Comfortable with Discomfort

Making decisions about artificial intelligence and other emerging technologies is creating anxiety. Companies need to think about this in new ways. Leslie Sarasin, FMI's president and CEO, urged the food industry to embrace discomfort to drive success. 

“We simply must get more comfortable with our discomfort in talking with each other about artificial intelligence—its implications, challenges, limits, dangers and opportunities," she said.

A key strategy is to have more “salient” and “human-centric” conversations about guardrails and governance for AI capabilities, she added. 

Pick the Most Important Spots
The growing focus on AI has led some industry executives to overthink what role the technology should play. Some leaders have been spending a lot of time analyzing all the possible use cases when they could drive more success by starting with their organization’s biggest needs and opportunities.

“I think 2023 was too much technology in search of a problem,” said Google Cloud's Jose Luis-Gomes, managing director, Retail and Consumer. He said 2024 presents a reset opportunity for organizations by taking existing priorities and finding out how AI can make them go faster and drive more value. 

Avoid Going it Alone
Retailers can’t be expected to have all the internal expertise needed to navigate in the face of rapid change. That’s why partnerships will be critical in the future. This is especially true for independent retailers. 

“Partnerships are critical; we don’t have to go it alone,” said David Best, chief operating officer of Midwest independent grocery and pharmacy retailer Coborn’s Inc. “We want to learn and expose ourselves to new things.” 

Salute Your Workforces 
Technology is crucial to the future of retailers—and so are employees. Companies will need robust workforces to interact with technology tools, engage with customers and serve many other essential roles in this fast-changing environment. 

Organizations need to nurture and celebrate their workforces. It should start with an employee’s first day on the job, said Brian George, president, chairman and CEO of Alex Lee, a distributor that operates the Lowes Foods grocery chain. “We strive to make an employee’s first day into a day they’ll always remember,” he said. “These moments matter.”  

Excel at Meeting Consumer Needs
Business success ultimately relies on meeting customer needs, and those are changing faster than anyone in the business can remember. Retailers that stay ahead of this challenge will differentiate themselves. 

Kroger’s Stuart Aitken, chief merchant and marketing officer, pointed to the importance of addressing the growing consumer interest in nutrition in the face of major health conditions from diabetes to heart health. He also cited the challenge of food insecurity and the importance of efforts to reduce hunger and food waste. Kroger’s Zero Hunger Zero Waste program reflects its commitment to build a more resilient, equitable and sustainable food system.

The upshot is that retailers need to be willing to step out of their comfort zones, which is essential when adopting new technologies but also critical for making progress on many other fronts as well. This requires identifying the most important goals and being prepared to consider nontraditional approaches to reaching them.

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