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The world of e-groceries has evolved very quickly in recent years. Through the pandemic, buyer behavior pivoted heavily to online grocery shopping, with many first-time buyers entering the market. 

In the US alone, the online grocery market generated an estimated 95.8 billion USD, with a sales forecast of 187.7 billion USD by 2024. With traditional retailers undergoing significant digital transformation to meet consumer demand and expectations, and last-mile e-grocery startups sprouting globally with deep funding, it’s an evolving market that’s moving at the speed of light.

Here’s a look at the evolution of e-grocery shopping and five trends that are shaping the industry today. 

4 Main Waves Have Dictated the Evolution of E-groceries

  1.  Traditional supermarkets begin next-day delivery practices 

The first wave began with traditional supermarkets offering next-day delivery operations. Companies like Tesco, Carrefour, and Whole Foods led this trend. 

  • Next-day delivery promise
  • Fulfillment through own inventory
  • 30-40K SKUs available
  1. Digital-first players begin delivering within slots

Amazon Fresh, Ocado, and Prime Now led the second wave with shorter delivery times than the first wave but still slower than what was to come.

  • 2-Hour delivery promise
  • Fulfillment through own inventory
  • 20K SKUs available
  1. On-demand is the third delivery model to come into the scene. 

Companies like Instacart, Glovo, and Rappi begin offering quick deliveries. 

  • 30-minute delivery promise
  • Fulfillment through third-party retailer inventory
  • Number of SKUs dependent on retailer availability

4. Ultra-fast deliveries make a splash globally in 2020.

A growing trend with many new players sprouting in every region. Gorillas, Getir, and Jokr led the market offering 10-minute on-demand delivery. 

  • 10-min delivery promise
  • Fulfillment through own inventory
  • 1K SKUs available

Top 5 Trends in Grocery Last-Mile Delivery

1. Quick Commerce

Also known as q-commerce and on-demand delivery, quick commerce has emerged and refers to the delivery of small grocery orders in 1 hour or less. Benefits of q-commerce include speed, product availability and curation, and convenience. Quick commerce is usually offered in urban centers.

The quick commerce trend is being offered by 3 types of market players today. 

  1. Aggregators: Third-party players offering operational and delivery on-demand. Think Instacart, Rappi, and Cornershop by Uber.
  1. Online pure players: Digital-first players that manage their operations independently through dark stores, such as Gorillas, Jokr, and Merqueo.
  1. Retailer-led solutions: Retailers are coming up with their own solutions for quick delivery either by making alliances with aggregators or betting on their fulfillment operation through dark stores. Censosud, Oxxo, and Fazil are just some examples to look at.

2. Dark Stores

With the disruption of traditional retail in the last two years has also risen an emerging trend: dark stores. These are traditional retail stores or spaces converted into local fulfillment centers. Dark stores enable speed, cost savings, and complete operational control, and could become the infrastructure for all e-commerce players in the future. While setting up the physical center can be costly, there are true benefits that are enabled by this type of operation. 

In the future, we might see many collaborations instead of competition taking place between retailers and dark store operators. New technology enabling real-time inventory management and operations will be at the heart of the success of this e-grocery operational model.

3. Crowdsourcing 

While not necessarily a new trend, crowdsourcing models—also known as Third-Party Logistics or 3PLs—have been proliferating in recent years with higher funding in the grocery space. With the need for retailers to compete on fast deliveries while cutting costs, crowdsourced delivery is an emerging method for delivery fulfillment that maximizes supply chain efficiency through 3PLs.

Crowdsourced delivery can provide a better shopping experience for customers through greater visibility into the delivery process. Customers can choose a time slot to ensure they can receive their delivery, and track their packages through SMS text alerts, push notifications, or GPS tracking on their smartphone

  • Market leaders are using 3pls to offer express delivery and have more resources at peak times without incurring fixed costs.
  • Players with other core businesses are entering the market. For example, Cabify.
  • Supermarkets are betting on in-house crowdsourcing networks. For example, H-E-B.

Tips to consider when crowdsourcing:

  • Set up a deliveries hub to manage multiple operators simultaneously.
  • Don’t rely on a single logistics operator.

4.  Dynamic Routing

Another trend and delivery model that’s gaining traction is dynamic routing. Through dynamic routing, retailers can manage multiple drop-off points along a delivery route instead of static one-to-one delivery. Companies have complete visibility over a delivery while offering drivers a suggested best route.

Benefits of dynamic routing:

  • One delivery vehicle carrying multiple orders at a given time
  • Minimizes distance covered per vehicle
  • Maximizes fleet use
  • Provides real-time tracking visibility and precise delivery times
  • Enables fast delivery times, usually within 20-minute slots and 95% on-time delivery

5. Automated Micro Fulfillment Centers

As the volume of e-grocery orders increase, retailers are looking for automated warehouse solutions that take their e-grocery fulfillment from manual to automated, especially in the picking

process. Currently, there are various market players that are already fulfilling their picking operations through emerging robotic technology. 

British online supermarket Ocado has 3,000 robots fulfilling its shopping orders at one of its London warehouses.

Automation through robots is a growing trend in more developed regions where labor costs tend to be higher. Penetration in developing countries will take longer but as technology continues to evolve and costs to purchase lower, adoption will increase globally. 

Looking for a technology partner to digitally transform your last-mile operations? Contact us to book a demo today.