E-commerce has become commonplace in nearly every industry around the world, with more people than ever shopping regularly from their computers, tablets, or even their mobile phones. But despite the huge growth in e-commerce overall, grocery stores have not seemed able to keep up with the trend. While grocery delivery and pickup are becoming more common, the majority of customers still prefer to shop for their groceries in-store, choosing items by hand rather than on a computer.
But does this failure to catch on have to do with the way grocery stores have their e-commerce sites set up, or is it simply the public’s aversion to online grocery shopping for reasons yet undiscovered? Here are some of the challenges that grocery stores face in developing and improving their e-commerce strategies.
E-commerce and online sales account for more than 20 percent of the profits of most commercial retailers, many of whom have been offering online shopping since the early 2000s. Grocery stores, on the other hand, are significantly behind the times in that respect. It is only in the past few years that online grocery shopping, with pickup and delivery options, has even been an option.
While these options are growing in demand, many grocery stores will need to make some changes to solve problems that are becoming more and more obvious.
The Cost of Storage and Delivery
One of the biggest costs facing developers of e-commerce options for grocery stores is the storage and delivery of food items. Many items require specialized containers, storage warehouses, and refrigerated delivery trucks to ensure food safety, making the importance of proper storage and timely delivery an essential part of the equation. It also requires significant up-front investments in capital. That infrastructure ensuring proper food safety during storage and delivery must be in place for the e-commerce component to work for grocery stores.
For grocery shopping apps, the ultimate issue affecting the user experience is ensuring the store’s inventory is as accurate as possible. Some of the difficulties customers often experience when using a shopping app for groceries are unwanted substitutions and items appearing available when they are not.
Items are pulled from the shelves by in-store shoppers at the same time online shoppers are placing orders, making it extremely difficult to maintain an accurate inventory in real time.
Perfect fulfillment of orders from online grocery stores is in the 25 percent to 30 percent range, a significant negative for the overall customer experience. Some stores are working to combat this issue by keeping smaller, ‘dark’ stores in place, specifically for the fulfillment of online grocery orders. These stores are not open to the public, making for better pick efficiency. However, due to their smaller spaces, they do not have the capability to stock the range of a typical grocery store. Typical grocery stores can carry as many as 70,000 SKUs, almost impossible to do in a dark store.
Low Profit Margins
The overhead costs of running an e-commerce segment for a grocery store can offer some challenges. Customers are often turned off by convenience charges and other extra costs associated with delivery. Often, it becomes a challenge of making that worth it to the customer.
For the retailer, managing the costs of storage and delivery, along with the costs incurred by creating the app, can add up quickly, cutting into their profits. However, the increased growth in the e-commerce industry for grocery stores may soon change consumers’ minds. Added charges may soon be seen as a necessary part of the process, eventually becoming an accepted aspect of online grocery shopping.
Another barrier to the common acceptance of online grocery shopping is widespread concern about quality control. Perhaps it’s a human trait, but most people prefer to hold food items in their hands, smelling them and feeling their qualities before purchasing them. It’s this hurdle that has held customers back from using online grocery shopping for their produce, fresh meat, and other similar items. Packaged goods, canned items, and cereals, however, seem to present less of a problem.
But grocery stores don’t make the most money on pre-packaged food items. Their high-margin items, like fresh produce and meats, make more of a profit than dry or canned goods. That alone will keep fresh items in the e-commerce grocery rotation consistently.
One solution for this type of quality control involves having customers going to the store’s designated pick-up spot to inspect the quality of their products before completing the purchase, in a way combining in-store shopping with the online shopping experience. Many stores have already implemented pick-up options for consumers, which can offer a chance to double-check the quality of the foods selected.