Many grocers weren’t prepared for the surge of orders they were getting from new and existing customers, but others have taken steps to set themselves up for success in the future. Figuring out which improvements to focus on, however, can be tricky.
“Retailers can manage inventory by placing purchase limits on high-demand products in-store and online, monitoring real-time inventory at the store level, and adjusting online inventory accordingly,” said Sylvain Perrier, president and CEO of retail software company Mercatus. “Additionally, they can communicate inventory and purchase limits quickly and efficiently with third-party delivery partners or delivery-provider marketplaces. This will help reduce order issues related to inventory.
“If retailers are running into problems fulfilling orders or stocking shelves, they should also consider deploying nonessential head office employees to help support in-store staff. This will help reduce costs incurred when onboarding new employees or asking staff to work overtime.”
Grocers should use what they have learned from these uncertain times to strengthen their ecommerce and fulfillment offerings. Important investments to consider include curbside pickup, more contactless payment options and new ways to manage supply chain demand.
“In the future, similar to what grocers learned about bottled water supply and demand after hurricanes and floods, a certain set of core items may now be added to their disaster response programs,” said Joe Vernon, supply chain analytics practice leader at Capgemini, a digital transformation firm. “Online ordering and home delivery will only increase as people become more aware of the regularity of future virus outbreaks in a global economy. Those options will also be important for the younger generation when they start to have households, raise families and take care of elderly parents. The cost of delivery overall seems very reasonable, and that makes the convenience even more appealing.
“Grocers and delivery services are pushing hard to keep up with demand and construct a working model that can scale and be cost-effective. When this crisis does abate, it will be interesting to see what grocers report about profits with such a surge in home delivery. Like Uber, it may take some time for the new normal to be turned into a profitable business.”
By and large, ramping up ecommerce efforts will be key for nearly all grocery retailers. Amazon has been a top choice of consumers, particularly for its grocery services: AmazonFresh, Amazon Pantry and Amazon Prime Now, according to April 2020 data from Bizrate Insights. A large share (62%) of US digital buyers said they bought food and beverage products from the ecommerce giant over the past month. Younger consumers were slightly more likely to purchase there.