Supermarket Fresh Supply Chain Upgrade and Digital Operation Transformation

Traditional supermarkets mainly offer two types of product services, fresh and non fresh. Fresh food is a necessity and has a high frequency of consumption. Data shows that within a week, 44% of consumers will go to the supermarket to purchase 2-3 times of fruits, 37% of consumers will purchase 2-3 times of vegetables, and 36% of consumers will purchase 2-3 times of meat, poultry, and eggs. Whoever masters fresh food can attract more customers and drive the overall vitality of the supermarket.On the one hand, chain supermarkets and convenience stores are gradually replacing the agricultural market as the dominant fresh retail channel, and on the other hand, they are also exploring new retail formats under the influence of fresh e-commerce. However, various downstream fresh food retail channels lack comprehensive cold chain logistics capabilities and supply chain ecology, and traditional fresh food supply chain enterprises do not have C-end service capabilities. Therefore, most supermarkets build new retail solutions in the form of existing offline stores and home delivery services, resulting in high fulfillment costs. Supply chain capability has become a bottleneck in the development of new retail. The upgrading of the underlying supply chain of traditional formats and the transformation of digital operations complement each other.The essence of community fresh food management is the supply chainThe essence of community fresh food management is the supply chain, which includes a complete process of procurement from the origin, intermediate logistics, store allocation, and ultimately delivery to consumers for fulfillment. Compared to the difficulty of digital transformation of the entire supply chain, the digitization and rapid replication of terminal stores are often a relatively simple step. This is also why in the past two to three years, community group buying type internet retail enterprises have been able to quickly replicate and deploy a large number of stores in a short period of time, giving people the impression of “high dimensionality but low dimensionality”.However, no matter how many stores and branches there are, without comprehensive supply chain support, there will also be situations where the distribution of goods is uneven, the number of SKUs is too small, and the quality of goods cannot be guaranteed.For internet community group buying with only sales outlets, what they need to expand is not only more community stores and group buying WeChat groups, but also more difficult is to solve the problems of where goods come from, how logistics is solved, and how goods are distributed nationwide. In fact, compared with large supermarket enterprises, community group buying Internet companies have far less control over the supply chain. Therefore, community group buying can only provide consumers with limited products in a sporadic way through “guerrilla warfare”. Therefore, on the surface, community group buying and large-scale supermarkets are a “high-dimensional vs. low-dimensional” war, but in fact, it is an attempt to “challenge the front-end to the back-end”.In fact, the change in front-end consumption mode is simple for supermarkets. Under the support of a stable and huge supply chain, if consumers tend to visit stores, then supermarkets only need to optimize store services and improve digital sales capabilities; If consumers tend to go home, supermarkets and businesses can improve their home service through internet platforms such as apps, WeChat mini programs, Meituan, and JD.com. If consumers are inclined towards community group buying, traditional supermarket enterprises can also distribute points in the communities near their stores, covering consumers through satellite warehouses. The difficulty of its transformation is much lower than that of expanding the supply chain. This is clearly more difficult for internet community group buying enterprises that only have community group buying as a sales form and cannot fully control the supply chain.The New Development of Fresh Supply Chain IndustryThe domestic fresh food supply chain system is still dominated by the traditional supply chain system centered around the agricultural market. Currently, there are few cities and enterprises that can achieve a supply chain model centered around supermarkets, such as Yonghui Supermarket and Jiajiayue; In addition, a open platform style fresh food supply chain system is taking shape. The third-party supply chain system, represented by Yonghui Colorful Fresh Food, American Cuisine, Song Xiaocai, and Shanzhinong, integrates the upstream planting and breeding bases by controlling goods without controlling stores, collects small B-end orders, and realizes large-scale collection and transportation.In comparison, a closed modern supermarket system is more efficient, followed by an open fresh food supply chain system, but overall higher than traditional fresh food procurement models; Domestic production and supply chain enterprises such as Yonghui Supermarket and Jiajiayue have formed a platform for the full industry chain connection, with strong management in the middle and back ends forming high stickiness in the front end; Compared to traditional models, fresh agricultural products are relatively high-quality and safe, with relatively high product prices.With the increasingly segmented trading channels, supermarkets have higher requirements for refined management capabilities, such as improving their own capabilities in product configuration, supply chain, and service capabilities. At the same time, to truly achieve refinement, it is necessary to do a good job in digitization, such as how to ensure that the store is not out of stock, accurate ordering, and automatic replenishment. At the same time, in terms of store manager management, it is particularly important to help store managers create standardized reports.