Just a few years ago, investments in digital grocery services such as online ordering, curbside pickups, and home deliveries were considered speculative and experimental.
Many big industry players and analysts were forecasting an eventual online grocery boom, but it wasn’t here yet.
Then 2020 happened, and the boom came all at once. A short-term necessity became a permanent shift in customer behavior. Hundreds of millions of consumers worldwide have now had a full year of experience with digital grocery shopping.
The question isn’t whether to go digital or how much to bet on it anymore. It’s how quickly and effectively businesses can use digital strategies and technologies to optimize e-commerce, curbside pickup, home delivery, and digital loyalty programs.
Many grocers, especially independent stores and chains, are still taking a low-tech approach to serving their digital customers. They’re still relying on manual picking and pickup processes to fulfill online orders in their stores. They’re also outsourcing a lot of the digital aspects of e-commerce to third parties such as Instacart.
To keep up with the growing demand for online grocery ordering and fast delivery, many stores have realized that they need to go digital. They need to automate processes so that they can manage and fulfil orders.
Top 3 Digital Transformation Strategies
Below are three areas in which grocery services need to be thinking about implementing new digital strategies and investing in the right solutions.
1. Taking Over and Automating Online Order Picking
Stores offering grocery e-commerce with curbside pickup or home delivery are starting to look at doing the order picking and assembly themselves. Why share 10% of profit with third parties like InstaCart when they can half percentage by handling pickup and delivery themselves.
Stores across North America are investing in order and labor management technology to help them boost e-commerce fulfillment performance. For example, stores that have equipped their staff with wearable Zebra mobile computers and barcode scanners have witnessed many benefits. It has helped them manage orders, scan barcodes to verify correct pickup locations, and automate the whole process for better efficiency.
By taking over the picking and order assembly process, and automating it where possible, stores can fulfill more orders faster. They can do it accurately while maintaining more control and keeping more of their sales revenue in their pocket. It’s also a smart strategy to protect against potential moves by companies such as InstaCart into more of a competitive posture. After all, they’ve collected massive troves of data on customers’ purchasing behavior and trends from grocers. Stores could easily use this data to open their own online grocery business as a direct competitor.
2. Enabling Smarter and More Automated Grocery Fulfillment
In 2018, long before the COVID-19 pandemic, Kroger and British e-grocer Ocado signed an exclusive agreement. The agreement was to create automated fulfillment facilities for Kroger in the United States.
In Britain, Ocado uses dedicated warehouses and dark stores to pick and pack orders for leading grocers. It uses a network of robots to replace manual processes with automated ones, plus proprietary technology. These optimize delivery routes, customer service, and many other aspects of order fulfillment.
Kroger and Ocado teamed up to bring the same technology to the United States and create robot-run fulfillment centers for Kroger. They’re opening their first facilities this year, giving Kroger a distinct advantage over competing stores.
It takes years and a staggering amount of money to do what Kroger and Ocado have done with robotics. However, there are much easier and affordable wins available with more of a human touch. These include creating in-store picking areas with a dedicated inventory of popular items. This will allow looking for items quickly and fulfilling curbside pickup orders faster and efficiently.
Jordan Berke, an ex-Walmart executive and Founder of Tomorrow Retail Consulting advises grocers to expand fulfillment capacity. He advises expanding fulfillment capacity at their own stores by utilizing extra space and automation technologies.
Some grocers are also creating “dark” stores that aren’t open to the public. They are set up as a dedicated fulfillment center so that workers can use mobile technology to pick orders faster and more efficiently.
Independent grocers must consider the strategies stated above to keep pace with customers and the biggest industry players.
3. Introduce Premium Digital Loyalty Programs or New Perks to Free Programs
Loyalty programs are nothing new in the grocery industry. However, the days of just offering a basic discount card or points-based incentives are giving way to more sophisticated and premium options.
For example, Walmart has introduced a paid membership program called Walmart+. This program offers free shipping, free home grocery delivery, and in-store self-checkouts via mobile scanning and payments. Amazon has extended its Prime membership program into its Whole Foods grocery stores, and Hy-Vee has created a new program called Hy-Vee Plus. The Hy-Vee Plus program includes a personal shopping service, free delivery, and a dedicated customer help line for paid members.
However, requiring fees isn’t necessary to build out a better loyalty program. New perks and benefits can be built into existing free membership programs. They will likely become increasingly necessary to compete with customer-friendly offerings from paid programs through big grocery chains.
By integrated your loyalty programs into curbside pickup and delivery services, you can provide new benefits that help increase online orders and retain customers. In that case, it can be a big win in an increasingly digital grocery market.
Plotting Your Best Digital Grocery Moves
These are just a few ways that grocers are beginning to optimize their online ordering, curbside pickups, and home delivery. There are many other potential strategies, solutions, and innovations that stores can consider, but not every option fits each store or its customer base
Analyzing your unique business situation, your current and future goals, and your customer service needs are essential. You’ll get a better understanding of what digital technologies and strategic moves are right for you.
Transform Your Shopping Experience With Zebra Technologies and DCR
Zebra Technologies has partnered with DCR to provide our customers with retail solutions that can offer an unparalleled in-store experience while connecting staff to the tools they need for maximum efficiency and productivity.
At Data Cash Register, we’ve provided expert advice and consultation to many of our grocery clients. We keep them updated on the latest industry developments and the newest grocery technologies. We also provide recommendations and strategic guidance based on what’s best for their business.
If you think that any of these insights are useful for your next digital store, please don’t hesitate to contact us. Contact us now to get started with a complimentary consultation and review of your digital business. You can schedule a discovery call at 1-888-429-4493 or email us at firstname.lastname@example.org.