Nine Challenges for Online Grocery
Selling grocery online differs considerably from non-food in some areas. Thus this rather sensitive product group holds very specific requirements for businesses in this market segment.
#1 High product count per cart
Every consumer is aware of how many different products may end up in the shopping cart during the average weekly grocery shopping in-store. The product count will usually be much higher than when shopping for fashion, books or electronics. Thus IT has to provide systems that can handle those large orders. Additionally the online storefront has to be designed in an uncomplicated and efficient way to enable the consumer to find the desired products as quickly as in-store. Only if the shopping process online can provide significant time savings compared to in-store will it live up to its full potential.
#2 Shopping Lists
Shopping lists have been around for thousands of years helping consumers not to forget the many required products while they are on their shopping tour. This important tool should also be provided by online grocers to its registered customers. Saved online shopping lists not only help to not forget any products but also speeds up the shopping process by ensuring that consumers can find and order their standard items with only a few clicks each and every time.
#3 Legal Requirements
Every country or state may have their very own specific legal requirements concerning the selling of groceries including labelling requirements for specific product groups. While the consumer can look at the actual product package to gather information about ingredients, allergens or preparation instructions in-store the product data section provides this information for each product in an online store. To keep all this information complete, current and legally compliant at all times requires a powerful PIM system as well as efficient managing procedures to be in place.
#4 Pricing Strategy in-store vs. online
Grocery profit margins are slim compared to those achievable in other market segments. Grocers have to be very conscious how to balance the additional cost factors associated with online grocery – e.g. delivery costs: Will pricing strategies lead to more expensive pricing online or will the prices be identical to those in-store? Will delivery costs be charged additionally or will they be free of charge?
#5 Regional Differences in Product Variety and Pricing
Differences in product variety and pricing may not only exist between in-store and online but depending on the strategic and organizational structure of a grocer the individual stores may themselves follow different strategies in product and price range. In this case the grocers have to develop concepts to be able to reflect that decentralized store flexibility – e.g. by assigning online customers to their respective region or store so that product range and prices match that of the respective location.
#6 Handling of Beverages and Deposit
Beverages pose a particular challenge for online grocers. For one beverages are mostly heavy and bulky so that delivery may prove problematic. On the other hand depending on location the driver may be required to collect empty deposit bottles and containers during delivery. Of course this process raises a number of concerns that businesses need to address: How can the delivery van be designed to accommodate that additional load? How can delays be avoided when transferring deposit credits back to the central IT system to not mess up the route schedule? How will the consumer receive the credit for the returned deposit containers?
#7 Transport of Refrigerated Products
Groceries are a much more sensitive merchandise than fashion or electronics. Frozen and refrigerated products in particular require grocers to take on specific responsibility to fully comply with the respective food safety procedures to protect their customers from any food borne illness. Thus refrigeration/freezer systems must be available for all delivery vehicles as well as for all pick-up locations.
#8 Selection of Delivery Time Slots
Food safety and refrigeration in particular are reasons why grocers set up specific delivery time slots with their customers. Additionally time slots benefit the customers by allowing them to integrate the arrival of the groceries into their busy daily schedule in advance. However to make this work the individual time slots cannot be too long so the customer does not literally have to wait for hours. The delivery has to be carried out dependably at precisely the arranged time since the customer relies on that service. A dependable real time route planning software that adapts quickly to current traffic situations is essential.
#9 Handling of Weighed Products
Numerous products like fresh produce are not sold prepackaged in many countries. Instead the consumer expects to buy exactly the amount individually needed. Due to complex picking processes it is currently not efficiently possible to provide this level of convenience to the consumer in online grocery. Thus grocers need to develop concepts to simulate this flexibility as closely as possible via a large range of available packaging sizes.
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