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Warehouse Fulfillment - Your Best Weapon in Grocery eCommerce Retail

Warehouse Fulfillment – Your Best Weapon in Grocery eCommerce Retail

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. And, if online grocery retailers want to successfully implement a last-mile solution, they’ll first need to develop a warehouse fulfillment strategy.

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—fueled 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 grocery eCommerce 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 grocery pickup programs, 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).

Learn what happens when traditional regional grocery & eCommerce collide (hint: online shoppers order more items…)

Ensure sustainability and scalability of your warehouse 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) 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? Here are 20 things to consider when selecting 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 warehouse 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 omnichannel shoppers, 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.

The real deal-breaker: delivery

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 warehouse 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.

If you want to stay ahead of other retailers in the market, then you need to:

  • Invest in last-mile delivery technology,
  • Prioritize delivery scheduling capabilities,
  • Have a real-time inventory management system to manage substitutions,
  • And more.

Explore the full list of delivery challenges that modern retailers must solve here.

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Headshot of Mark Fairhurst

Mark develops global growth strategies for Mercatus and leads the Marketing, Sales, and Customer Experience teams.