In the grocery business, to quote that song from “Casablanca,” the fundamental things apply.
Ideally: Basket sizes grow bigger, increase in frequency, and are “turned over” more quickly, all in the service of boosting margins in a notoriously thin-margin business.
In the age of eCommerce, PYMNTS’ data show that consumers increasingly want to order their groceries online with the certainty that the goods will be available when they want them. As many as 36% of consumers order their groceries online for curbside pickup, while 35% order them for at-home delivery.
Read Also: Grocery Ordering, Curbside and Delivery Seeking Their Own Levels With Digital Shoppers
James Hermanowski, general manager of Bell and Howell, told Karen Webster that if 2020 was the year of the great digital pivot, we’re now in the age where grocers (and other verticals) need to make buy online, pick up in-store self-service options and delivery more profitable.
Simply put, Hermanowski said, “there’s a pain point that exists in fulfilling orders. There’s also a pain point that exists in delivering orders.” Shipping is expensive for grocers, he said, and so is delivery. Better inventory management and solutions that automate eCommerce functions can help.
Grocers have an inherent advantage in enticing consumers to stick with self-service or buy online pick up in-store models, he said — and that advantage is tied to the wide range of inventory they can offer compared with digital upstarts.
It’s a fair bet that if Whole Foods is out of the Horizon Organics 2% milk you typically buy, you’ll simply opt for an alternative and continue the order. That’s a far cry from what you’d demand from Brooks Brothers, for example, where an online session might reveal that, yep, they’ve got the blue button-down in your size — but it’s in stock at a store 6 miles away. Waiting for delivery might take weeks, given recent supply chain snarls.
As Hermanowski told Webster, “The happiest customers are the ones that are most in control of the process.” Grocery has proven to be an ideal target for eCommerce and automation, said Hermanowski, due to the size and frequency of orders.
But, he added, things had changed from just a few years ago, when customers were content to wait in their cars, at curbside, for somebody to come out and bring them the order. As grocers contend with increased demand and lower staffing in the age of COVID, the wait can take 10 or 20 minutes — not a customer-friendly experience.
The situation isn’t optimal for grocers, either. It takes time and money to tear staff away from picking orders and having them sit idle, waiting for customers to arrive. Minutes matter and drags on efficiency translate into drags on profits.
In the past several months, we’ve seen movements to create and operate micro-fulfillment and centralized fulfillment centers. And in other initiatives to streamline and automate the picking process, through robotics, that can quicken the time it takes to find, sort and package the items that may be part of a basket of grocery items ordered online.
Those technologies (among them Bell and Howell’s offerings, such as storage lockers) help remove much of the labor component from the last-mile equation. Cutting down on labor ensures that consumers can get their orders in seconds at the point of pickup rather than minutes.
The Economics
Hermanowski said the buy online pick up in-store model just makes more sense for grocers, as they don’t have to rely on third-party aggregators or pay delivery drivers (It’s partly why Amazon Prime won’t offer you free delivery for that 2% milk from Whole Foods now).
Said Hermanowski: “The delivery of groceries costs [the retailer] $20 to pick the order and deliver it — so it’s an expensive proposition” — some of which ultimately is borne by the consumer.
He said Bell and Howell’s systems are also beneficial to delivery operations too, shaving down the time the cars and vans spend waiting to be loaded and sent off on their routes (and as we all know, time is money when you’re paying drivers, but they are idling).
Broadening the Pickup Options
Bell and Howell said last month that it was teaming up with Delivery Solutions, a last-mile orchestration and post-purchase software-as-a-service platform, to give grocers an easier, more cost-effective way to expand their pickup options.
Their new solution allows supermarket companies to prestock orders (through the “store in a box” concept and BH’ ’s QuickCollect smart grocery lockers) to self-service locations and embrace “batched delivery” to consumers’ homes.
The recent initiatives have seeds sown well before the pandemic. Back in January of 2019 — three years ago though it may well feel like 1,000 years have passed — Bell and Howell CEO Larry Blue told Webster that BH QuickCollect would be positioned as an automated drive-up grocery and general merchandise pickup solution to retailers and grocers nationwide that can be added to an existing retail building or as a stand-alone structure.
“The goal is to help retailers leverage their brick-and-mortar presence by helping them offer value to customers that they haven’t been able to in the past — even if they’ve been offering buy-online, pickup-in-store solutions,” he said then.
Read Here: Bell And Howell CEO: Why Next Gen Click-And-Collect Isn’t Just About Convenience
Hermanowski remarked in the 2022 chat with Webster that oftentimes the attractiveness of being able to pick up items at a buy online pick up in-store location sooner — and without the delivery fees — beats having them delivered (especially as the dinner hour creeps ever closer). And the “store in a box” concept — through which shoppers order online, the orders are loaded into a QuickCollect GO! POD and then the orders are picked up at the pod — means that retail operations need not be physically connected to a “real” store. That opens up territories to a range of merchants, from pharmacies to retailers that have not established brick and mortar locations yet. Fulfillment without a storefront, in other words.
Looking ahead, he said that the grocery store of 2025 will be marked by more automation, particularly robotics.
As he told Webster, “If you could save just a minute per order, and you’re doing hundreds of orders per day or week, well, that’s a lot of hours you can save in labor; 2022 will be the age of eCommerce expansion but also refinement.”
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