Dave Clements is chief strategy officer at dunnhumby, a customer data science company.
Transformation used to come in waves. Over the past 75 years, the grocery industry has changed beyond all recognition — but it has done so gradually. Take the rise of the supermarket, or the introduction of barcode scanning. Think about the growth of online or the trend towards quick commerce. These are seismic shifts, but ones that have unfolded at a glacial pace.
Gradual change has its advantages, of course. When trends play out over years and decades, retailers can afford to keep most of their focus on the here and now. Change still needs to be managed, but it can be managed away from the core day-to-day functions.
Transformation at every turn
Today, new and disruptive forces are emerging at unprecedented speed. Seemingly generational events now occur in quick succession, from conflicts and geopolitical tension to new technology and AI integration. Change isn’t just getting faster — it’s also now happening in parallel.
There’s the ongoing digitization of the store, for example, that touches on everything from shelf-edge technology and retail media to real-time customer engagement. There’s the move away from traditional retail towards marketplace ecosystems powered by agentic AI, and the need to prepare for a fundamentally different approach to product discovery. There’s the trend towards GLP-1s and the impact on what — and how — people purchase.
Individually, each of these represents a potentially gigantic new development, but even when combined, they represent only a fraction of what retailers are now contending with. To the list above, we can easily add changing consumer behaviors, CPG partnerships, the evolution of private brands, and many other high-impact topics. Lift the lid on just about any part of the industry right now, and you’ll see at least some evidence of disruption.
That’s not to say that this situation is unique to grocery retail; transformation is alive across a multitude of other sectors, too. What makes things particularly challenging for grocers, however, is that these revolutionary forces need to be balanced against the relentless pursuit of day-to-day excellence.
Flawless execution at incredible scale
Few industries operate under the same pressure as grocery. Every single day, retailers need to ensure they’re delivering the right ranges, the right prices, the right level of quality and the right shopping experience. Beyond that, they need to deliver on the raw fundamentals too, like getting products back on shelves in time for tomorrow’s visits. In short, grocers need to execute flawlessly, at scale, and without ever really pausing for breath.
That’s particularly true right now, when external factors are making an already competitive environment even more challenging. When costs are volatile, consumer confidence continues to yo-yo, and supply chain disruption is rife, retailers need to be at the very top of their game just to keep edging forwards. Everyday excellence is now just a basic requisite for success.
With that in mind, the logical — and entirely reasonable — temptation is to remain focused on the “now.” Who has time to worry about an 8% drop in grocery spending as a result of GLP-1 adoption when on-shelf availability is under threat? Who’s really thinking about the risks posed by agentic commerce when this year’s targets need to be hit? This is where an uncompromising focus on the current trading horizon can quickly become a trap.
In days gone by, when market shifts unfolded slowly, retailers had the luxury of time. They could afford to focus primarily on the now, safe in the knowledge that they still had time to adapt, even if they arrived slightly late to the party.
That’s no longer the case. Change is accelerating. Change is beginning to overlap, and those who fail to keep up will quickly find themselves overtaken by faster, more future-focused competitors.
Now, next, and beyond: the new retail horizons
Mitigating that risk means managing three different horizons simultaneously. To remain competitive both now and in the future, grocery CEOs should establish a vision that stretches across three distinct periods.
The first — and the one that we’ve already explored — is the “now.” That flawless execution of the fundamentals must continue, regardless of the increasingly intense macro pressures that retailers now face.
The second, somewhat obviously, is the “next.” This is where rapidly developing near-term trends sit — think store digitization and marketplace ecosystems. Many retailers already have pilots or proofs of concept in place here, even if they’re yet to activate them at scale.
Finally, there’s “later.” Here, retailers need to be preparing for longer-term, more existential issues, like the huge shifts resulting from trends like GLP-1s or agentic commerce. How grocers will decide to adapt to issues like these will come to redefine successful retailing.
This is the new reality. All three of these horizons need to be managed, and they need to be managed in harmony. Dedicated resources are required, as is governance. Retailers will need to be increasingly smart about which trends must be chased down and which can be left by the wayside.
Crucially, every retailer’s journey on these paths will be different. As we explore in our Retail:Vision opinion paper, in order to succeed, grocers will need to refocus on the fundamentals of their brand and how to stay close to the customer.
Ultimately, this will lead them to the most important question of all: not “What is everyone else doing?” but “Where do our customers need us to lead next?”
