How smarter, simpler ordering can boost sustainability for grocers

by | Jun 14, 2024 | Grocers, Retailer Requirements, Retailers

Manual ordering processes often lead companies to continual overstocking or understocking, resulting in wasted product and lost revenue. A lack of quick insight into current stock and trending consumer products can lead to revenue loss, customer dissatisfaction and wasted product.

As pressure increases from consumers, trading partners and local regulations, sustainability is one thing that cannot be ignored. However, it’s easy to push additional sustainability practices aside when it seems revenue or efficiency might be on the line. Luckily, with the right practices, boosted efficiency and increased sustainability can go hand-in-hand.

What does sustainability look like in the grocery supply chain?

Sustainability in your grocery business goes beyond making good choices for the environment. It’s about striking a balance between keeping your shelves stocked with the right amount of product to minimize food waste and control costs.

An efficient approach to inventory management means leveraging data to analyze consumer trends, predict consumer demand and optimize ordering. It’s also about using the most efficient shipping and fulfillment methods, such as Direct Store Delivery (DSD) or optimizing bulk deliveries to your distribution centers. By identifying areas for improvement, like reducing spoilage, you can eliminate wasteful practices and free up resources to invest in sustainable initiatives.

Sustainable inventory practices

Inaccurate inventory management can lead to sustainability challenges, especially in the grocery industry. Overstocking perishable items like fresh produce, meat and dairy creates significant food waste. This represents not only wasted resources but also lost sales and revenue tied up in unusable inventory.

Similarly, frequent stockouts can disrupt customer shopping experiences and lead to costly inefficiencies. The rush to reorder without precise demand data often results in overcompensation. Without time to analyze optimal quantities for specific products, grocers risk falling back into the overstock trap—a vicious cycle that generates unnecessary waste and strains financial resources.

The easiest way to increase sustainability

Keeping your grocery shelves stocked with the freshest products while minimizing waste requires a two-pronged approach: accurate demand forecasting and a centralized platform that offers deep visibility into your entire operation. This integrated approach empowers you to optimize ordering, minimize waste and ensure you have the right products on the shelf at the right time.

Forecast demand through integration with point-of-sale (POS) systems

When you have a good handle on consumer demand, it’s a lot easier to avoid stockouts or surplus inventory. Proactive ordering keeps the products your customers want in stock with up-to-date order history data, intuitive order creation and inventory insights. Integration with your POS ensures all orders are accounted for and sales patterns can be tracked.

Up-to-date order history data can reduce out-of-stocks by 20% and keep your customers happy and more likely to continue shopping with your company. Accurate demand forecasting empowers your business to adopt sustainable practices, reduce surplus inventory and stockouts, and eliminate waste.

Order Central is the solution to more sustainable processes

With one channel to manage ordering (rather than multiple outdated ones), reordering as soon as inventory dips is painless. Easily accessible catalog information is useful for creating and managing replenishment orders.

Sustainability in grocery retailing goes beyond environmental concerns. It’s about maximizing efficiency, minimizing food waste and keeping your shelves stocked with the freshest products. Order Central tackles these challenges head-on, providing a single, smart solution for end-to-end replenishment ordering.

Ready to take the steps toward a more sustainable supply chain? Reach out to SPS Commerce today to learn more about Order Central, our single, smart solution to end-to-end replenishment ordering.

To learn more about Order Central, visit our webpage.

Angie Jula