The online groceries business has gone through important phases in the past few years. It could be said that e-groceries has undergone four key phases of e-commerce macro models within the supermarket category.
Today, e-groceries and on-demand delivery are constantly changing to cater to consumers. Brand loyalty is feeble, and supermarkets will need to optimize their systems and operations in order to successfully deliver against customer expectations.
Here, we present five ways supermarkets can improve their operational efficiency, and even triple it.
A Brief History of the Evolution of On-Demand Delivery Models
One of the first models was the delivery model of traditional supermarkets in the late 90s to early 2000s, where supermarket chains first entered the world of delivery and e-commerce, typically offering delivery within the next day. Tesco was one of the pioneers, with its full assortment of stores, and which took the first steps toward delivery within the supermarket category.
A second wave came along where fully digital players such as Ocado in the UK, Amazon Fresh, and PrimeNow, fulfilled a 2-hour delivery promise through their own inventory and warehouses.
The third wave between 2014-2015 occurred when marketplaces with on-demand delivery entered the market. Fast deliveries, typically within an hour, were being completed. Glovo, Instacart, and Rappi are of the big players in different regions globally. These marketplaces worked with retailer inventory instead of their own.
The fourth wave started in 2020, with new industry players such as Getir and Gorillas promising 10 to 15-minute deliveries. This model has propagated globally with many new market players promising ultrafast deliveries. This model typically takes place through the use of dark stores and smaller inventories and is impacting industry trends and where consumer expectations are heading.
Today, we could say there are three groups of players that are taking market share:
- ‘Aggregators’: Marketplaces working off an on-demand delivery model and partnering with supermarkets.
- ‘Pure players’: market players that emerged fully under a digital model and work on short delivery times, and are focused solely on the supermarket category.
- Retailers: Traditional brick-and-mortar grocery stores that have entered the on-demand marketplace through their own e-commerce solutions and unique value propositions.
In an ever-changing and somewhat saturated marketplace with diverse value propositions and delivery models, how can traditional supermarkets optimize their digital operational efficiency to effectively compete?
Follow along to learn five common errors hindering your operational efficiency and five ways to optimize it today.
5 Common Errors That Are Hindering Your Operational Efficiency
There are usually five steps that retailers follow along the value chain of e-grocery deliveries to effectively fulfill and deliver orders. Within each step, there are common errors that may be setting back your operational efficacy.
1. Order Entry
Some basic questions to consider in the first step within the value chain of e-grocery deliveries are:
- How is the order reaching your operations?
- Where is it going within your systems and teams?
- What information is being included and delivered to the person who receives the order for fulfillment to quickly begin?
- How do I merge orders from different demand generation channels into one core logistic platform?
A common error retailers make here is how the orders are received and fulfilled in the first place. Using excel spreadsheets to keep track of orders or methods that are not automated can cause serious mistakes from the start.
2. Picking and Packing
In this second step, what most pickers are after is that of quick order fulfillment in the shortest window frame possible, with the least amount of effort or steps taken at a location to meet the delivery promise.
At this stage of the value chain, manual processes can produce a margin of error that can affect productivity and effectiveness. For example, human bias can generate errors whereby a picker didn’t read information or instructions properly and an error in the order taking was produced. Technology and automation can help pickers and packers mitigate these types of occurrences.
3. Storage and Shipment
In this third stage, supermarkets should question how they can improve storage and shipment of products. Technology solutions can not only help locate the products according to the demand and manage activity accordingly but also help those in charge of this process to complete it as quickly as possible.
A lack of package traceability at the time of storage or shipment can also contribute to errors within the process. An order may get delivered to the wrong customer or items may be missing. This is where an automated identification process is critical.
4. Delivery
The final stage is all about the last-mile logistics. This step involves having all the right information at hand about where the order needs to be delivered and finalizing the order status with the customer.
Common errors that hinder efficiency at this stage are the misuse of delivery resources and effectively synchronizing operational timeframes.
5. Real-Time Visibility
One key component that must accompany the journey from order intake to delivery is the ability to have real-time visibility. Essentially, being able to generate real-time order status traceability for monitoring and incident management.
Incidents can occur at any stage of the process, such as a change in delivery address, product changes, and availability, notifying the customer of order status, and so forth. All of these factors impact the overall operation. So, the question here is how can routing be managed in the most logical and efficient way?
5 Ways to Immediately Improve Your Operational Effectiveness
1. Automate Task Assignment
Supermarket e-commerce is a process of task orchestration that has to be completed by different stakeholders. Assigning these tasks without a centralized system that indicates to each person along the fulfillment process what they need to do can cause confusion, error, and inefficacy.
It’s especially important when businesses promise a value proposition of short delivery times, as it implies coordination of tasks that must be synchronized, error-free, and time-sensitive, in a way that is micro-planned by technology. Using technology that can automate task assignment will help guarantee the delivery promise made to the end-user.
2. Maximize Fulfillment Efficiency
Having visibility in the fulfillment process will guarantee the customer value proposition is in fact met. Empowering the employee responsible for the fulfillment process and helping them respond or react to an issue in a timely manner is the key here, and technology can help.
Find a software solution that provides:
- Picking and packing and multi-order picking solutions
- Picking routes based on store configuration and stock distribution
- Zone picking based on product types and having specialized pickers per zone. For example, one picker to be responsible for perishables and dry products, one for fresh or frozen, and so forth. Through this modality, products picked per minute per order will increase, also enabling batch picking.
- Exception management for stock breakage, whereby replacements can be executed in an agile way.
3. Employ Mechanisms for Continuous Auditing
Setting up audit mechanisms will help reduce errors from reaching your customers. There are different checkpoints that can be put in place to mitigate issues. Generally speaking, without the right technology in place, fulfillment and delivery processes will not be linked to each other, causing a greater margin of error due to lack of visibility and traceability. This can be achieved by pairing a technology application with barcode scanning for a more automated verification process.
4. Provide Multiple and Flexible Delivery Models
A smart delivery system will help supermarkets maximize their fleet resources and reduce delivery costs. By offering multiple delivery models through a centralized technology application, retailers can better fulfill their delivery promise.
Implement technology that allows you to:
- Deploy delivery models that are express, programmed, or offer in-store pickup.
- Create dynamic routes that maximize fleet utilization.
- Use multi-fleet management to integrate in-house fleets (proprietary and crowdsourced) and outsourced fleets (3PLs).
- Enable auditing mechanisms that mitigate errors during the delivery process.
5. Manage Incidents in Real-Time
Without technology available to help manage issues or incidents in the past, retailers had been operating from a reactive vs. proactive standpoint. Today, technology can help assist with issues in real-time, by having a centralized hub with the information at hand so that incidents can be identified and solved quickly.
Through technology, customer support agents can identify exactly where an order is, can take corrective action for each order being fulfilled, and can connect the agents with field representatives, be it the pickers, drivers, or with the customer from a single interface. Dashboards and analytics will also be available to supervise operations at the store or order level.
