What can UK grocery retailers learn from Scandinavia?

The Arc­tic Cir­cle is a place of won­der over Christ­mas, but this year it should be gro­cery retail­er lead­ers, not just wide-eyed chil­dren, look­ing to the snowy North for some much-need­ed inspi­ra­tion.

Accord­ing to Jacob Tver­aabak, chief exec­u­tive of Scan­di­na­vian gro­cery tech­nol­o­gy com­pa­ny Strong­Point, Scandinavia’s adop­tion of tech­nol­o­gy by gro­cers can pro­vide valu­able lessons for UK super­mar­kets fac­ing unprece­dent­ed cost hikes and labour short­ages.
“Pre-pan­dem­ic, UK gro­cery retail­ers tra­di­tion­al­ly ben­e­fit­ed from price sta­bil­i­ty and access to rel­a­tive­ly low-cost labour,” says Tver­aabak.

“But now, UK gro­cers are fac­ing chal­lenges which Scan­di­na­vian coun­tries, with some of the high­est labour costs in the world, have had to grap­ple with for decades. They have been forced to lever­age tech­nol­o­gy much faster to reduce costs, boost effi­cien­cy and increase prof­itabil­i­ty, and have become the Sil­i­con Val­ley of gro­cery retail tech­nol­o­gy. If you go into a Scan­di­na­vian super­mar­ket, you’ll find it is years ahead of most oth­er coun­tries.”

Tver­aabak acknowl­edges that UK gro­cers have made strides in gro­cery tech­nol­o­gy, par­tic­u­lar­ly ware­hous­ing, but upgrades are avail­able to dri­ve fur­ther effi­cien­cies, improve cus­tomer expe­ri­ence and retain cus­tomers who are look­ing for sav­ings. “There are a lot of effi­cien­cy-sav­ing oppor­tu­ni­ties for UK gro­cers under pres­sure, and they can learn from what the Scan­di­na­vians have done by lever­ag­ing tech­nol­o­gy,” he says. “Every­thing has changed in the last 12 months. This makes find­ing these sav­ings more impor­tant than ever.”

The focus needs to be on three key areas – ware­hous­ing, ecom­merce and shop floor tech­nol­o­gy. With ware­hous­ing and auto­mat­ed ful­fil­ment, Strong­Point has worked close­ly with fel­low Nor­we­gian robot tech­nol­o­gy group Auto­Store to pro­vide an auto­mat­ed solu­tion for gro­cery retail­ers that stores four times the inven­to­ry in the same space. Retail­ers can auto­mat­i­cal­ly store and retrieve items includ­ing frozen goods (which saves work­ers going in and out of frozen rooms col­lect­ing items).

This links to ecom­merce tech­nol­o­gy, where fur­ther sav­ings can be made and pro­duc­tiv­i­ty boost­ed by improv­ing in-store pick rates – essen­tial­ly how quick­ly staff can com­plete online orders for cus­tomers. Tver­aabak says that store work­ers with­out tech­nol­o­gy assis­tance can, on aver­age, pick 60 to 90 items an hour. Exist­ing self-built UK gro­cery pick­ing tech­nol­o­gy and repur­posed ware­house man­age­ment sys­tem tech­nol­o­gy have lift­ed this to around 150 to 220 items an hour. How­ev­er, StrongPoint’s solu­tion can help work­ers almost imme­di­ate­ly raise their rate to between 240 and 350 items per hour.

“This isn’t robot­ic tech­nol­o­gy, which remains a very small part of the mar­ket, but aug­ment­ing the pow­er of man­u­al pick­ing, which is still the most com­mon way for British super­mar­kets to ful­fil orders,” explains Tver­aabak. “Some store own­ers who didn’t believe our num­bers actu­al­ly fol­lowed their staff count­ing items just to dou­ble-check!”

Cham­pi­oning click-and-col­lect over home deliv­ery is anoth­er way gro­cers and cus­tomers can find sav­ings. In Swe­den, click-and-col­lect hov­ers at around 50% of all gro­cery ecom­merce orders, unlike the UK’s home deliv­ery dom­i­nat­ed mar­ket. Super­mar­kets can install tem­per­a­ture-con­trolled gro­cery lock­ers next to stores or along com­muter routes, allow­ing cus­tomers to pick up their online orders on their way home from work or at their con­ve­nience. Any shift towards click-and-col­lect can sub­stan­tial­ly slash retail­ers’ costs.

On the shop floor, elec­tron­ic shelf labels – small screens next to goods show­ing real-time price changes and pro­mo­tions – can also remove labour-inten­sive tasks such as pro­duc­ing and replac­ing paper labels. Addi­tion­al­ly, the shelf edge labels can be set up with blink­ing lights to iden­ti­fy items to pick, sav­ing pre­cious sec­onds when locat­ing prod­ucts. In fact, Nor­way has one of the high­est rates of elec­tron­ic shelf label pen­e­tra­tion in the world.

Oth­er in-store inno­va­tions, which would make any UK shop­per blink twice, include AI-pow­ered self-check­outs which iden­ti­fy not just the type of fruit or veg­etable but which vari­ety, avoid­ing the need to search through menus.

These check­outs can also ver­i­fy age when pur­chas­ing restrict­ed items, avoid­ing the awk­ward and slow staff approval process. In Nor­way, anoth­er com­mon sight is age-con­trolled or high-val­ue items resid­ing in auto­mat­ed pick-up cab­i­nets that cus­tomers can access after select­ing the item from a dig­i­tal screen, retriev­ing a tick­et and pay­ing for them at check­out.

“None of this is expen­sive ‘pie-in-the-sky’ tech­nol­o­gy. It is proven and inte­grat­ed into thou­sands of stores used today by mil­lions in Scan­di­navia,” says Tver­aabak. “This is a win-win for UK gro­cers want­i­ng to save costs and for shop­pers, who will see a much more fric­tion­less and poten­tial­ly cheap­er shop­ping expe­ri­ence in the years ahead.”

To find out more, vis­it strongpoint.com