Ecommerce and home delivery, the new normal of Retail Food & Grocery

In the month of May 2020, in full phase 2, large-scale retail sales in Italy recorded growth of +6.9% with three-figure growth for e-commerce: +178% of consumer goods sales in online stores [Nielsen]

There are few who did not attempt to do their shopping online during the lockdown, only to be met with the message “No delivery slots available for the selected date”. Or for the next day, the day after, and so on, often for weeks and weeks..

Or, on managing to get an online delivery, receiving a message on the day of delivery notifying them that many of the products – and even substitutions for those products – were not available.

The unprecedented experience we went through during the Covid-19 lockdown undoubtedly increased many consumers' level of tolerance for the inefficiency of online deliveries in the Retail Grocery sector, but at the same time it led many to do their shopping online for the first time, often creating a new habit which has extended beyond the initial crisis, requiring an ever-increasingly precise and efficient service, day after day.

The Coronavirus and the new normal have emphasized and highlighted the problems that retailers in the grocery sector must manage and optimize:

• Lines at checkouts, today the number one enemy of preventing crowds and allowing contactless interaction, optimized thanks to custom apps
• Complex fulfillment, from management of the cold chain and therefore perishability of goods to POS integration, which acts as a hub for the rest of the operations, gathering information and connecting it with big data and AI logic to supply intelligent operations in the supply chain: from the back office, through the sales department, right through to management of deliveries, also making use of the data gathered through the loyalty program
• Preventing outof-stock items, a dynamic naturally connected to the previous point

If the solution is and has always been obtaining inventory omni-channel visibility in real time thanks to OMS (Order Omni-channel manager) and optimization of logistics, with the use of dark stores or lockers, the need to quickly adopt solutions allowing for genuine omni-channel management also depends on another issue which has struck the sector – the loyalty crisis. This means that the service provided is of even greater importance: genuinely omni-channel deliveries and returns, which allow customers to choose the type of delivery which best meets their requirements, create the conditions for strengthening a long-term relationship between the brand and customer, or creating the conditions for them to switch to another supermarket …

The lockdown inevitably caused a rush on provisions, accelerating the digitization process for retailers who did not yet have an online store, as well as optimization of the logistics and distribution processes for those who had an e-commerce presence which was previously more a storefront than a real business.

While in other sectors, starting with Fashion Retail (link), e-commerce has for some time been a step which was taken for granted in companies' Sales&Marketing Digital Transformation, this is not the case in the Grocery sector in Italy. There are still many players who do not have a “real” online store, with a digital product catalog to GDSN standards which allows customers to be genuinely informed on their products. Being ready to manage the need to maintain a food catalog which is updated in real time and that, as well as monitoring warehouse information, must also monitor expiry information for the many perishable goods, is a challenge for all operators, and for many one which they have not even begun.

Like in other sectors, but in particular Retail Food&Grocery where customer loyalty is a key driver, e-commerce is not just a sales channel, but also and above all a marketing tool: online purchases build and consolidate the customer profile information and allow incredible personalization of the customer experience by capitalizing on the order history with consistent content and promotions.

In this scenario, loyalty cards and programs, of primary importance in day-to-day food shops at large retailers, must naturally be enabled for use both on the physical and online channel, allowing omni-channel management of the customer purchase experience.

E-commerce and home delivery on the one hand strengthen the relationship with the customer from a retention point of view, and from the other they are the key method for reaching new customers, as well as zones where the company has no physical presence. The drive to build loyalty with customers, both those previously and newly acquired, is officially open.

New delivery and collection methods which are as contactless as possible, from click&collect and drive&collect, to locker collections and home delivery, the main choice of new customers of online grocery stores, are made possible by an efficient logistics and distribution network and optimized order management, permitted by Order Omni-channel Manager (OMS) solutions combined with picking management solutions: 

Improving the customer experience and delivering them the product they want with their preferred method and timescale requires a digitization process which enables real-time inventory visibility to prevent out-of-stock situations:

1. Distributed Order Management, solutions which allow management of the flows between order acceptance and delivery, planning the preparation times and the work of the teams (pickers, drivers, shop assistants)
2. Optimization of picking process, cwhich allows the greatest possible efficiency and simplicity in picking products, thanks to store assistant performance monitoring
3. Last-mile, management to optimize the work of the delivery team

What is the key to guaranteeing efficiency and ease of fulfilling orders, from picking products in the store or warehouse, right through to delivery to the customer's home?

The answer lies in real-time sharing of information with all members of the team: pickers, drivers, home delivery operatives – they must all be able to view the orders in real time, organize deliveries wherever they are, while customer support monitors the process centrally. The ability to easily modify the order status, make changes to the price, manage payments upon delivery, print documents and synchronize information with the POS allows for significant reductions in the risk of errors, improving customer satisfaction and therefore loyalty.

Distributed Order Management allows optimization of orders, subdividing them and assigning the order to the store automatically on the basis of the timescale, delivery address and order contents, allowing:

• Management of home delivery, click and collect, lockers and dropshipping

• Management of time slots, delivery areas, collection points and related prices, which are more advantageous for longer and more flexible slots
• Subdivision of orders, allowing carts with perishable and home products from the point of view of priority
• Automatic choice of processing store on the basis of the products, delivery times, delivery options, delivery address, selection of potential stores

Optimizing the picking process means improving efficiency in terms of costs and, as a consequence, the impact on productivity and order accuracy by minimizing the risk of errors.

Order Management systems integrated with automated picking solutions, which nevertheless always allow manual management on the basis of specific requirements, have the following goal:

• Optimizing the picking routes within the store or warehouse thanks to multi-order picking, following a route designed to reduce the time spent on foot gathering the products required for delivery on the basis of the period of time available for picking, in relation to the start of the deliveries and the physical location of the product
• Allowing barcode-based picking which allows for error rates close to zero
• Replacements for out-of-stock products based on customer preferences and their order history and behavior, with accurate product recommendations.
• Picker efficiency analysis: monitoring of the pickers' performance for a constant increase in customer service

Complete last mile solutions optimize the delivery team workflow thanks to:

• Optimized and automated routes for every delivery van, in order to reduce timescales and costs, with route suggestions on the basis of the delivery zones and slots
• Automated delivery route optimization on the basis of order grouping for one or more time slots, with the possibility to manually assign orders where required
• Purchasers can receive automated notifications on the expected delivery times during the delivery route