If grocery store owners are to tap into the huge potential associated with online sales, they need to understand how to get the product to the consumer. There are several approaches to consider, so what are the options for delivering groceries after online purchase?
Juggling Convenience Against Margins
Margins in the grocery industry can sometimes be small and can easily be affected by relatively minor changes in operations and marketing. Thus, the choice of business model can be crucial, and a retailer must carefully address any move to online sales if they want to ensure an increase in profitability rather than a slide back.
Methods of distribution could be pivotal. If there is any hint of inconvenience, a customer may fall back into old, offline buying habits or simply decide to look elsewhere. In fact, consumers will only turn to online grocery shopping if the complete offer is right. In other words, they won’t be willing to sacrifice quality, price or access to the range of products they may have been accustomed to as they navigate the supermarket environment. While they may well consider alternatives, they may not be willing to order groceries online, especially if delivery or pickup options turn out to be inconvenient.
What Are the Online Grocery Delivery Options?
Pure Distribution from a Dedicated Centre
It pays to look at the various delivery options within the industry to get a feel for the challenge. Certainly, larger retailers have an advantage as they may be able to set up a dedicated centre of distribution, where they can factor in the economies of scale. This type of centre may not be convenient for direct customer access, and the company may only be able to deliver to those clients rather than offering a pickup solution. A centre like this will be an investment in its own right, and the retailer will have to pay close attention to its inherent cost. After all, consumers are only willing to pay a “reasonable” amount for delivery, and this price may not always cover the retailer’s hard cost.
Dedicated Distribution Centre with Collection Options
Sometimes, the company can establish a distribution centre that also has drive-in, “click and collect” capability. This is becoming more popular in many countries as consumers can choose their groceries in the comfort of their own homes before jumping in their car to collect them. They may not need to wait very long to do so and can even pick up their purchase without getting out of their vehicle.
Click and Collect from the Traditional Store
The best solution may end up being a compromise, where retailers offer the consumer access to a pickup point within their traditional brick-and-mortar shop. Rather than spend a certain amount of time within the grocery store as they move up and down the aisles and pick their own products, consumers can do everything online instead. If they frequently purchase the same products as part of their weekly shop for the family, the software can store these details. With this, they can log in and check out within minutes. They’ll then drive to that familiar location and pick up their entire trolley-full at a convenient gate.
This solution gives retailers a relatively easy entry into the growing online grocery market. Furthermore, they may be able to keep any associated fees to a reasonable level, so they don’t scare off those who may be inclined to take up the offer. In a recent survey by McKinsey & Co, high delivery or collection fees were some of the most significant issues for shoppers in France. In fact, this problem appears to have more of an impact than quality issues, poor product assortment or any inconvenience associated with delivery times.
Understanding the Challenge of Delivery
Pure home delivery services can be challenging to set up, and costs can be very hard to contain. Further analysis by McKinsey & Co shows that click and collect options can be much cheaper to operate than delivery and by a margin of some 30%. Also, it can be tough to deal with peaks and troughs in demand for delivery by scaling up and down accordingly. For example, when a long holiday weekend is approaching, people may order a bigger basket for that particular week. This can present a sizeable challenge for retailers as they may not have enough physical space within their own vehicle fleet. If they rely on third-party delivery operators, those companies may not have the capacity either.
Remember, consumers do not like to be inconvenienced. Some of them may be much more likely to favour pickup than they would delivery, especially if they tend to pass the grocery store anyway. They may not like waiting for a delivery, especially if the time slot is too long.
Offering All Solutions
Then again, there’s no such thing as the average consumer. For example, some people may not have a vehicle and would therefore find click and collect to be an additional challenge. In theory, they could simply present themselves at the pickup point on foot, so long as it’s accessible and configured accordingly. Others may work from home and be available to accept a delivery without additional hardship. In this situation, they may see home delivery as the ultimate convenience and expect it to be an option during checkout.
Working Out the Best Approach
Smaller retailers may need to test the waters to see what would work best for them. They could carry out some survey work to ask their current customer base pertinent questions. Would they prefer on-site shopping, click and collect or delivery? The results would help them decide and see whether it would be advantageous to expand into online grocery shopping. Crucially, they would also know how much emphasis to put on the delivery aspect.
Looking at Shopping Platforms
Several software platforms could make it easy for a small grocery retailer to test the waters. For example, Woocommerce has an intuitive shopping platform with a variety of checkout options. During setup, retailers can decide whether to offer a traditional checkout linked to a collection time slot or suggest certain delivery slots attached to a separate fee.
Setting Up Your Own Online Grocery Store
It is nevertheless important to design an online grocery store that is attractive, easy to navigate and comprehensive before you even think about checkout. Consumers will want as much choice as possible so they do not feel as if they are missing out by not visiting the brick-and-mortar store in person. They will want to know that they’re working with the best app to buy their groceries online, and you will also need to focus on SEO for your e-commerce store. After all, you need to be sure that your site will be front and centre when new customers are looking for different solutions.
If you want help with selling fast-moving consumer goods (FMCG) online, reach out to Duelling Pixels. They’ll help guide you in the right direction and ensure that your checkout, pickup and delivery options are robust, convenient and secure.