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7 Digital Transformation Trends in Food and Beverage Industry

July 4, 2022
4 mins reading

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Retailers have intensified their digital transformation in response to the COVID-19 health crisis, and nowhere is this shift more pronounced than in Asia.

According to Inside Retail Asia’s report on Asian Retail Outlook 2022, the most prominent challenges for retailers currently are: impacts of Covid (80.30 percent), supply chain disruptions and issues (42.42 per cent), consumer confidence (37.88 per cent) and lack of cross-border travel (37.88 per cent).

As a result, many businesses are investing in new capabilities and partnerships earlier than anticipated, revamping conventional storefronts, and switching to more data-driven operational models and solutions.

Below are some of the top trends in digital transformation happening across the retail and F&B industries across Southeast Asia.

1. Using Technology to Deliver Business Strategy

It’s no surprise that the pandemic has accelerated technology adoption across industries, including retail and F&B. It is no longer considered a ‘good-to-have’, but a necessity for business survival.

Thanks to new technologies, the retail industry has recently seen some significant changes.

While technologies like artificial intelligence analyze data and increase efficiency, tools like augmented reality and virtual reality can improve the user experience.

2. New Operating Models

The closure and/or inactivity of physical outlets and location has led those operating in retail to have to adjust their operating models. This is where the concepts of dark stores and cloud kitchens come into play.

A Dark Store is a physical site that has been converted into a hub for fulfillment activities after being closed down.

Since these distribution centers are not open to the public, there is more room for storing merchandise and swiftly and precisely filling orders. In addition, dark Stores give customers access to resources and choices, including online shopping, same-day delivery, and in-store pickup.

Though not a novel concept, the number of Dark Stores has increased dramatically over the past year as brick-and-mortar stores have struggled during lockdowns.

A similar concept applies to the F&B industry in the form of a cloud kitchen. A cloud kitchen, sometimes known as a "ghost kitchen" or "virtual kitchen," is a type of commercial kitchen where food establishments can produce their menu items for takeout and delivery. Contrary to conventional brick-and-mortar establishments, cloud kitchens enable the production and delivery of food products with low overhead.

3. Subscription-Based Sales

One method to leverage data to rethink retail enterprises is through subscription businesses, where customers pay a set amount repeatedly for a service or collection of things. As a result, retailers expanded collectively by more than 300 percent between 2012 and 2018, five times faster than the S&P 500 businesses' sales, according to McKinsey.

The subscription model has the potential to increase average expenditure, start a positive feedback loop where data is used to meet customer demands better, and foster loyalty. It also offers value to customers who value convenience, novelty, and carefully selected experiences.

The majority of conventional retailers, however, have yet to find significant success with their subscription services. The challenges being faced include difficulties of launching a new line of business via an unproven channel and occasionally failing to sustain their subscription businesses (usually just a trial).

4. Social Selling

Social retail is a vital concept in the current digital era as it can boost your brand online and offline.

It is founded on the idea that people are rewarded for sharing goods they already adore. Social selling is all about how businesses use social media to forge these particular connections with customers.

Retailers have realized that social media platforms serve more purposes than just serving up adverts. They are a vital resource for comprehending, relating to and winning the loyalty of their ideal client. It offers a human perspective on identifying client needs and promotes conversion rates.

5. Seamless Omnichannel Experience

Retailers who want to stand out in 2022 must master a multi-channel platform that makes it simple to switch between the digital and physical selling environments.

Retailers who use online and offline channels to sell and distribute items differentiate themselves better than those who use one channel. Others may emphasize their brick-and-mortar network, while some may concentrate exclusively on using internet platforms to market their products.

The food and beverage industry is home to a sizable number of retailers new to omnichannel. The number of omnichannel merchants has snowballed as fast-food chains use their drive-thrus to complete orders from mobile apps and grocery chains advertise curbside pickup for online grocery orders.

6. Scaling Ops Efficiency & Transparency

Having a plan set to address operational efficiency and transparency can significantly increase business operations. It helps companies increase profits while reducing expenses, generating a favorable return on investment, to make more informed business decisions. Digital tools such as Nimbly enable you to collect data at multi point-of-sale locations and use the insights to guide your daily operations through real-time data and reporting.

The plan would increase employee productivity, thus enhancing the customer experience. Additionally, your team develops autonomy and decision-making propensity. In the end, employees will typically feel more driven at work leading to more efficiency and operational excellence.

Your employees will hopefully meet and exceed client expectations and create a pleasant shopping environment; customer satisfaction will soar to new heights.

7. Higher Demands from Customers & Regulators

Consumer shopping tastes have significantly shifted since the pandemic.

Consumers now prefer to use hybrid shopping, which involves spreading their purchasing trips across several digital, physical, and mobile touchpoints.

Purpose-driven consumers are another new trend. Instead of basing their purchases only on price, variety, and convenience, customers also select brands based on how closely those companies align with their values.

Sustainability is also a crucial aspect of decision-making when making purchases.

To make more sustainable purchases, consumers seek information on what makes a product sustainable, where it is sourced, created, and made, and how to reuse, return, or recycle it.

They are eager for additional information to assist them in making better selections, being actively involved in the purchasing experience, and engaging with the brands.

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