Surging Demand Stresses Grocery Delivery And Pickup Systems
When you sign at a Giant Eagle supermarket in Indiana, drivers will be directed to the roadside pickup location … [+]
The sudden surge in online grocery orders sparked by the coronavirus pandemic has left some retailers’ pickup and home delivery operations stressed to the point.
Daily online grocery sales in the US spiked in mid-March and doubled earlier in the month, according to the Adobe Digital Economy Index published Tuesday by Adobe Analytics. The new index analyzes trillions of online transactions over 100 million items in 18 product categories.
The index’s data also shows that grocery orders placed online for consumer pick-up between February 24 and March 21, increased 62% compared to the same period last year. A surge in demand was not unexpected as state and local authorities across the country pushed for social distancing and staying home to help curb the spread of COVID-19 disease.
Most of the major U.S. supermarkets were offering home delivery and buying online / in-store pickup (BOPIS) as early as 2019 before the full impact of the outbreak was clear. While grocery chains have invested to make their pick-up and delivery services even more robust, the increase in demand in March outstrips logistical capacities.
“Every retailer I’ve spoken to has been overwhelmed for the past few weeks,” said Gary Hawkins, CEO of the Center for Advancing Retail & Technology. “The rapid rise in online volumetric systems and the flurry of stores have overwhelmed retailers’ ability to pick, fulfill and deliver orders, whether BOPIS or home delivery.” Prior to founding the center, Hawkins was CEO of Green Hills Supermarket in Syracuse, New York.
Kathy Kimple, chief retail officer at FitForCommerce (FFC), says grocers had already prioritized BOPIS and home delivery before those services became vital as consumers stay at home. According to FFC’s Grocery Omnichannel Index study, which was completed in the fourth quarter of 2019 in collaboration with the Food Marketing Institute:
- 96% offer home delivery
- 81% offer pickup options (68% offer roadside pickup)
- 77% offer both delivery and collection services
- 96% allow customers to select delivery and collection time slots
“Now that more and more families are staying home and self-isolating, grocers are finding they can’t handle the huge surge in demand, and delivery times have lengthened to days or weeks,” says Kimple. “In many badly affected areas, delivery is simply not an option. The challenge is not a technological challenge. It is a human resource challenge as the grocers turn to the staff to cope with the surge in demand. “
Online shoppers placing orders for groceries to be picked up in-store, on the roadside, or at home … [+]
Consumer concern over the ability to replenish their kitchen pantries and fridges is heightened by strikes at the grocery delivery service Instacart and Amazon AMZN by workers demanding risk payment as well as better personal protection against COVID-19. Whole Foods Market WFM employees hosted an illness on Tuesday.
The discounter Dollar Tree has suspended online ordering through its website in order to replenish its stores with stock.
According to Hawkins, grocery retailers can play an important role in easing consumer anxiety by communicating measures to protect shoppers and employees. Retailers have a unique opportunity to “be a soothing voice to instill confidence that we will do this”.
Now is the time for retailers to shine, says Jenn McMillen, CEO of Incendio, the loyalty marketing firm she founded after leading loyalty and customer relationship management at retailers like GameStop GME and Michaels, among others.
“The future viability of certain companies is now being decided,” she says. “Since many companies are looking for their digital or online solution for BOPIS quickly, remember to consider the customer experience and customer loyalty.
“During these uncertain times, consumers have placed their trust in you. Meet their expectations now and expect future loyalty in return for being a trusted partner. Are you failing on product, price, timing, or experience? Expect immediate effects by handing over to a competitor or longer lasting effects such as: B. a lifelong critic.
“You don’t want to be ‘that guy’. ”