The Online Grocery Report: The market, drivers, key players, and opportunities in a rising segment of e-commerce
In the first Online Grocery Report, Business Insider Intelligence looks at a variety of grocers’ curbside pickup and grocery delivery options, analyzing how they compare with competitors’ strategies, how profitable they are for the grocer, and what their future may be. In the report, Sylvain Perrier, president, and CEO of Mercatus, shared his thoughts on the variety of different strategies that grocers are using to optimize the profitability of their online grocery offerings. Here are a few excerpts:
- Walmart is piloting automated kiosks that act as vending machines for online orders. This eases the workload for employees who put together pickup orders because their job is done once items are bagged. However, many pickup customers may appreciate the human element of getting their groceries from someone they can talk to if something is amiss, Mercatus CEO Sylvain Perrier told Business Insider Intelligence. The loss of this human contact, along with the fact that they require the user to load groceries into their vehicles themselves, could make these kiosks less compelling on the customer side.
- Only pay to operate the level of service that’s necessary to meet demand. Managing labor costs against the volume of anticipated transactions is a method some grocers use to spur profitability, Mercatus CEO Sylvain Perrier told Business Insider Intelligence. For grocers, this can mean only dedicating enough labor to a curbside pickup offering to handle the number of orders coming in or, on a larger scale, cherry-picking which markets to offer delivery in to avoid hiring a delivery service that doesn’t end up fulfilling many orders. By collecting data that can be used to generate more accurate predictions about the amount of traffic an existing or prospective service would receive, grocers can cut extraneous costs and only pay to operate what they need.
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