If grocery e-commerce, also known as click-and-collect grocery and delivery, was ever going to take off, few would have predicted it would skyrocket courtesy of a global pandemic.
Perhaps never before in the history of modern grocery stores has there been trepidation from consumers about doing their shopping. But as Neil Stern, senior partner with McMillanDoolittle in Chicago, sees it, this business has grown exponentially overnight.
“People are trying these services for the first time, and a lot of these people had never experienced pickup or delivery for grocery. That’s the good news if you’re looking at where this goes for the future; the bad news is these people are getting really horrible service, often waiting four or five days for an open spot for their groceries,” Stern says.
What’s also challenging, he says, is that with the volume of click-and-collect orders increasing in tandem with the number of coronavirus cases, stores are experiencing out-of-stocks on some particularly coveted items. “The situation is getting really strained,” Stern says, “when an employee is selecting groceries for a customer.”
Despite the downsides, Stern believes the switch by many consumers to click-and collect grocery will have a lasting effect on the industry, increasing the amount of shopping that’s done online in the long term.
Part of the growth, he says, “will come from this causing a change in consumer habits. How big those changes are going to be depends on how long this goes on. And the service will get better as [stores] start to build mechanisms to deal with it.” These mechanisms include dark stores or warehouses, rather than employees patrolling the regular stores to fulfill orders.
Here are four elements of click-and-collect that retailers need to be aware of:
E-commerce “has grown exponentially over the past 30 days,” says Joe McMenamin, director of e-commerce for KPS Global, Fort Worth, Texas, “and retailers are realizing they’re not ready for [e-commerce].” KPS is accordingly seeing an uptick of interest in its online grocery pickup (OGP) boxes, a line of coolers/freezers where retailers can store online orders that are ready for pickup. The OGP box is smaller than a traditional cooler space yet offers 25% more capacity, with two additional bins per door.
“You only have a certain amount of retail estate in each store, but you want to maximize the orders you can put in there,” McMenamin says. “Our boxes lend themselves perfectly to that. We can go deeper, taller.”
The modular design of the boxes means they can be added to—or subtracted from—as needed. This allows retailers to move into e-commerce gradually, McMenamin says. The boxes can also be switched from refrigeration to freezer, based on demand. Typically, retailers use 70% of the boxes for refrigeration and 30% for frozen items.
The OGP boxes are intended to be accessed by store employees who then hand the contents over to the customers. “People like human interactions,” says McMenamin, adding that while retailers typically place the OGP boxes in a back room, they can also go into the front of a store. “They have to have their own place because this has become so important.”
Apex Supply Chain Technologies in Mason, Ohio, offers pickup lockers for grocery stores that are available heated—for prepared food orders—or ambient. “It’s become more important because it minimizes contact and allows customers to pick up products on their timetable,” says CEO Mike Wills.
Wills believes grocery stores will experience a dramatic increase in prepared food sales due to the closure of restaurants and the ease of picking up dinner at the same time as groceries. Typically retailers have at least 70% of their lockers as ambient, so some may want to rethink the ratio.
Apex’s lockers, which also come in different sizes to fit the needs of different orders, are also accessible directly to consumers. When customers order they receive a barcode that unlocks the doors associated with their order, once they arrive at the pickup location. “It’s a closed-loop system,” says Wills, which means “there are no mistakes.”
He expects implementation of the lockers to lead to more customer loyalty as they discover how seamless this process is.
Overall, Wills is seeing click-and-collect take off more in urban environments due to crowds and parking. “In a city, if I know I have a designated area for pickup orders, I can be more efficient with my time,” he says.
If there are boxes and lockers filled with groceries, those products have to come from somewhere. Swisslog, which has U.S. headquarters is in Newport News, Va., provides robots and automation for behind the scenes. What most retailers need, says Colman Roche, VP of sales and consulting for e-commerce/retail Americas, is “a dense, high-performing system.” That is, an assembly line robot that will gather up all the required groceries in the smallest space possible so that when customers place an order, the robot gathers all the items and places them in a specific location. When they arrive for pickup, a human gathers the order and delivers it.
Swisslog uses a software-driven automation system using SynQ software, which manages the individual SKUs, down to expiration dates, and prioritizes orders. The system itself features storage totes stacked on top of each other with robots running around picking them. “It can be configured to any size, whether you’re bolting it onto an existing grocery store or building it separately,” Roche says. It can also fit any shape of building to maximize the space and take advantage of every nook and cranny.
Typically it takes 12 to 15 months to get Swisslog’s system deployed, but with the increase in orders recently, “we’ve learned we can do it even faster,” Roche says, “perhaps in as little as six months.” What takes the most time is the manufacture of the system and the installation on-site. “Once it’s installed on-site, things can happen very quickly,” he says, while advising retailers to start with a small system that makes it easier to scale up rather than down.
Besides time, another worry of retailers, he says, is that the customer experience will be impacted. “They should be concerned. A lot of our process is working with retailers and educating them. At the point of collection, where someone loads up their car, the human touch is still very important—so an associate brings the groceries to the car and it’s important to have that person,” Roche says.
Scanners, Printers and Tablets
Any click-and-collect system requires many different pieces to put it all together, and scanners, printers and tablets play a critical role.
Lincolnshire, Ill.-based Zebra is among the companies that are experiencing the effects of COVID-19. “We’re feeling the surge of activity,” says Anees Haidri, global retail strategist. “In the grocery space, there’s an uptick of usage of online solutions to have product delivered and to pick it up, and they all require different solutions.”
The Zebra product that’s been particularly in demand is the TC52 touch computer, which can do tasks ranging from inventory management to price checks. “The primary place for us is in order fulfillment: how a store would pick products and stage them, and communicate with the customer as they come to pick it up,” Haidri says. “All of those processes leverage a mobile device of some sort to guide where to pick or where to store product.”
When a customer arrives, a store employee uses a Zebra scanner to scan a barcode on the customer’s phone. This can then be coordinated with the label that’s printed on the order. Zebra offers both desktop and mobile printers, and the former are the most popular, Haidri says. But all of the devices interact, with Android at their core, and additional software tooling helps the customer manage all of their devices. “That’s a big part of Zebra’s differentiation,” he says, adding that when combined with Zebra’s partners who spend time in the stores bringing retailers up to speed, “retailers can be focused on their operations, rather than the tools that run their operations.”
“For technology to work best it requires some hand-holding,” Haidri says. “We do a lot of work to make sure our products are easy to take out of the box and function right away with the software up and running.”