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Tech-Driven Warehouse Fulfillment—Your Best Weapon on the Grocery eCommerce Battleground

Omnishopping is a fact of our digital age: More consumers worldwide continue to go from online to offline and back again to purchase from all types of categories. In fact, one study suggests that 83 percent of shoppers in the U.S. and U.K. and 78 percent of shoppers in Japan use multiple channels and devices to do their browsing and buying.

The increase in omnichannel shopping behavior is an indicator that more eCommerce retailers are finally putting the pieces of the customer experience (CX) puzzle together, to deliver more engaging and personalized service that crosses the digital–physical retail divide.

Yet, many online retailers—especially small-to-medium-sized grocery eCommerce sellers—are still struggling to find a win-win solution in the one area that’s become ever more influential in consumers’ purchase decisions: delivery.

Delivery is the latest battleground for shopper CX

Today’s shoppers are no longer content with finding the right product at the right price. Now, their expectations around delivery are rising, too—fuelled in large part by the amped-up fulfillment protocols of international, cross-category eCommerce powerhouses like Amazon, Alibaba and Wal-Mart. And the result is that shoppers will streamline purchases through eCommerce sites that offer the best possible delivery options. For instance, take the results of this study of 3,000 people across the U.K., the U.S., and parts of Europe, which found that 66 percent of shoppers chose to purchase goods from one retailer in preference to another because the delivery  services offered were more appealing, while 96 percent of the same shoppers said that a positive delivery experience would encourage them to shop with a retailer again.

This trend is changing the way grocery retailers think about their business, too: We’ve seen an explosion of customer-centric grocery delivery solutions over the past several years, including the upsurge of click-and-collect services, in addition to full-fledged grocery delivery services, like Wal-Mart (powered by Uber).

However, many small-to-medium-sized grocery retailers are finding it difficult to take full advantage of the ongoing eCommerce boom. The problem: Their fulfillment strategies—and the supply-chain infrastructure that supports them—aren’t advancing quickly enough to keep pace with online sales growth. This is due to the lack of uptake of technological resources that can build sustainable warehouse fulfillment success over time. Another factor: The pace at which consumer expectations change makes it so that when retailers think they’ve got their infrastructure adjustment underway and are close to being balanced, they’re forced to reinvent themselves again (and again, with every successive shift in consumer shopping behavior).

It’s not enough to focus on delivery speed—you also need to ensure the sustainability and scalability of your fulfillment processes

Delivery services involve so much more than merely a product and a means of getting it to a customer. Instead, it takes the organization of all the people, procedures and technology needed to coordinate the online checkout experience, as well as payment, order management, picking, packing, processing and physical delivery processes to fulfill an online order.

Because of the complexity of eCommerce fulfillment (and the shorter timelines involved), more grocery retailers are leveraging innovations in warehouse fulfillment to meet the delivery demands of shoppers of today as well as the customers of the future.

A short list of some of the solutions being implemented to facilitate scalable fulfillment processes includes:

  • Order-picking robots, augmented-reality goggles technology, and in-house machine learning algorithms, like the ones enlisted by shipping giant DHL
  • Shipping software systems that help to control accelerating delivery costs by defining and formalizing the amount of work called for at various stages of the picking, packing and delivery processes
  • Third-party logistics services (also called 3PLs or 3PFs, for fulfillment services), which can often facilitate higher-quality logistical services than most small-to-medium-sized retailers, and are also a cheaper solution than in-house offerings, as capital doesn’t get tied up in the process of keeping facilities and systems up to date over time.

[Are you weighing the pros and cons of various technical delivery and shipping solutions? Check out this excellent article on the 20 things you should consider when picking a shipping software system, which includes insights into features and functionality, scalability, vendor support, data analysis & reporting, and other factors that are key to eCommerce retail logistics and fulfillment.]

A further benefit of technology-based eCommerce fulfillment solutions includes improved capacity scheduling, which means that grocers can expand the availability of in-store products to offer a broader range of products and special services online. In an age when significant growth is coming from omnishoppers, limiting products to the physical store no longer makes sense. Conversely, expanding eCommerce growth potential and capacity can lead to higher profits from expanded sales and lower costs.

In conclusion

While product selection may sway shoppers to make online purchases on one site over another, the real deal-breaker for many consumers is delivery. Thus, the onus is on forward-thinking grocery retailers who want to compete in the eCommerce space to deliver more of what consumers want: cheaper and more convenient delivery options, all backed by a strong and well-thought-out eCommerce fulfillment and delivery strategy that takes into account the increasingly complex orders that will be coming their way in the months and years to come.

Take the fast-track to eCommerce delivery excellence with our whitepaper, “Mastering Online Grocery Fulfillment”, free to download now.

Stefanie Neyland
Stefanie Neyland is a Content Marketing Manager at Mercatus, specializing in all things grocery eCommerce.

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