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Online grocery: Three steps to creating and optimising an online store
No grocery business can have been expected to comprehensively prepare for such an unprecedented event as the global Coronavirus pandemic, but now that they find themselves facing enormous demand to deliver an efficient and easy-to-use online service, it is vital that they move quickly.
How, then, can businesses which sell food and drink move online quickly and effectively if they do not already have an e-commerce operation in place? And how can those who are already online optimise their operations in order to deliver reliability and efficiency in a time of crisis?
We think there are three stages to consider in developing online grocery capabilities. First, immediate actions for offline businesses which need to get online quickly. Second, optimisation actions for businesses which already have an e-commerce operation but need to streamline and improve it to cope with increased demand. And third, enhancements six to 12 months in the future for consolidating these improvements and ensuring long-term e-commerce success.
Stage 1: How to set-up an online grocery store
Getting online grocery capabilities quickly means balancing speed and effectiveness. It is no good setting up an online shop tomorrow if it is unable to deal with customer requests effectively. And in the grocery sector, there are some specific challenges to address.
First, grocery businesses need to have a specialist approach for products which are sold by weight. Consider, for example, loose fruit or vegetables, or fresh cuts from the delicatessen. Businesses selling such items need to enable customers to order by weight – which means they also need to be able to charge by weight. This means that their commerce software needs special capabilities to handle different units of measurement across pricing, ordering and billing, and these must apply throughout the entire end-to-end e-commerce process, from ordering, to picking, to invoicing. On top of this, in most countries there is a legal requirement for e-commerce businesses to provide base prices, making the product data model even more sophisticated.
Second, grocery businesses need to consider their approach to product availability and replacement – particularly at these times of unusually high demand. Perfect demand planning, ensuring that they can always deliver precisely the products ordered by customers, is impossible. But so too are extensive buffers when it comes to perishable groceries. As such, businesses need to deal with substitutes in a way which both ensures customer satisfaction, and integrates seamlessly with the wider supply chain.
Third, and in part because of these two challenges, grocery businesses need a way of handling payments when the exact invoice amount at the time of ordering is not clear. This may include distinguishing between a payment reservation and a payment capture, or using payment methods which only become effective after delivery, such as a mobile terminal. This, however, requires a credit check.
The best way of navigating these challenges whilst also getting an online store set up quickly is to take a ‘headless commerce’ approach. This means separating the front end of the e-commerce platform from the back end – that is, separating the presentation layer which customers navigate from the functional layer comprising elements like the shopping basket, the payment processing and order fulfilment. It is far more agile and flexible than traditional approaches to e-commerce, and enables businesses which are new to digital operations to take an ‘out-of-the-box’ approach to setting up a new website.
Stage 2: How to improve grocery delivery efficiency
Once businesses have an online grocery store in place, it is vital that they work on optimising their logistics in order to cope in a time of unprecedented demand.
Once again, there are particular challenges for grocery businesses compared with other retail sectors. First, they need to consider the logistics of delivering perishable groceries and chilled products, which mean that local delivery is preferable to central warehouses. This also helps with packaging waste, which is a growing concern amongst environmentally-conscious consumers.
Second, online grocery providers need to offer faster delivery than, say, furniture retailers. The e-commerce software and entire pick-pack-ship process must support same-day or at least next-day delivery – within a desired delivery window, of course. For local retailers as opposed to national chains, this is actually a great opportunity. They can use a single local store or group of stores as the locus of the operation, retaining control over assortment and prices, and delivering with their own vehicles locally, which acts as additional advertising. Such grocers create trust for the end customer about the origin of the food and the competence of the retailer.
However, picking in-store brings two further challenges: avoiding disturbing local customers; and ensuring efficiency. Good software to sell groceries online guides the grocer’s staff through the shelves in the shortest and fastest way possible. Wave picking, whereby all groceries for all orders are collected at once, is the most efficient picking method unless a grocer has just a handful of online orders per day. The order picker processes all orders in an order cycle at once in a defined route through the aisles. If multiple picking zones are defined, pickers can pick in parallel.
Provided a headless commerce approach has been chosen, then it is very fast and straightforward to integrate such software into the existing e-commerce site – it is simply a case of adding a new module or application.
Stage 3: How to personalise the online grocery experience
Once those core tenets of a successful online grocery operation are in place – the e-commerce site itself, and the enhanced logistics to support effective pick-pack-ship processes – then online grocery businesses can think about further enhancements, such as personalisation, additional digital touchpoints and brand building.
Customers can be particularly sensitive to brand when it comes to purchasing food, especially fresh groceries. They want to know where it came from and who handled it – they want to trust the business in question, particularly in times of wider uncertainty. And trust in a business is built on a strong brand.
Typically, brand building exercises, online personalisation and the addition of new touchpoints such as mobile shopping or social media channels involve bringing additional agencies in to augment the core e-commerce website. They might be specialists in design, or particular social media, or e-commerce analytics. These can all have a dramatic impact on the performance and reputation of online grocery businesses – but there is also no doubt that in a time of crisis, they are nice-to-haves.
For grocery businesses working hard to keep food and drink flowing to people’s homes throughout this time of national emergency, such projects are likely to be placed on the list for six to 12 months’ time. But with the foundations outlined above in place now, grocery businesses can respond to the crisis now, and create a powerful e-commerce platform for the future.
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