When Robots take over: Strategizing to win the Grocery Game

Looking to stay relevant in the competitive landscape of eCommerce, supermarkets have begun to test micro fulfillment in an attempt to control costs and increase the speed and accuracy of online order fulfillment.

Only time will tell if automating fulfillment will in fact speed up deliveries while keeping costs low. The grocery space is hard with its low profit and high margins. Yet, Grocery has a $800 billion market annually and it continues to grow. However, online orders still only compromise a small portion of the US grocery market at 3.5 % annually. So the question remains why are grocers so heavily concerned with their delivery segment?

Learn more about how Bringg helps provide the perfect grocery delivery experience here

According to eMarketer, Food and Beverage is the fastest growing eCommerce segment in the US with a projected estimated revenue of $40 billion in 2020. The growth has grocers scrambling to go online and fulfill orders for delivery. If you can order a shirt or a pair of shoes online and have it delivered the same day, why can’t your groceries be delivered the same day as well. However, unlike a shirt or a pair of shoes, grocers face a major challenge in that perishable products leave little room for error. In panic, Grocers are turning to short term strategies to try and keep up by sending store employees down aisles to fulfill orders.

Fabric suggests retailers are not investing in the right initiatives and are failing in three key areas: customer proposition, profitability and online grocery penetration. In order to solve these problems, grocers need to take a holistic approach and look to invest in technology to boost their position in this space.

How does one solve the growing demand facing grocers today? Sending pickers to stores doesn’t create an economy of scale. Grocers need to focus on home delivery but are unprepared to meet the growing demand of online sales. Many believe that moving to micro fulfillment and robotics would help increase efficiency by removing human factors to speed up local deliveries as these systems are capable of fulfillling more than 4000 orders a week. The advantage to micro fulfillment is that they combine artificial intelligence and robotics at locations already close to the consumer (such as existing stores) and can help maximize the efficiencies of online grocery delivery.

By leveraging their physical locations, traditional grocers have an advantage over strictly online businesses as they’ve already done the work to determine where their customers are, which is why they have a store in that area. So why not leverage them to fulfill their eCommerce in order to get the deliveries to their customers faster.

By utilizing existing physical locations, grocers can serve both click and collect and on demand deliveries using micro fulfillment and robotics to increase the customer experience through speed, accuracy, real time inventory and by adopting artificial intelligence to predict purchasing patterns.

However, the problem doesn’t end there. Unfortunately, many grocers believe they can solve their fulfillment issue with implementing robotics and automation alone. As online grocery continues to grow, grocers will need to ensure they can fulfill orders quickly while ensuring on time delivery. To accomplish this, Grocers need deep data intelligence which will be integral to help understand how orders are fulfilled and dispatched. Micro fulfillment can only be successful if grocers can successfully introduce a layer of orchestration capable of understanding all internal systems such as warehouse and inventory management to help leverage data by automating the entire supply chain process.

At Bringg, we understand fulfillment of the supply chain is changing the way everyone has traditionally looked at this process. Instead of seeing fulfillment and delivery as siloed technologies, we see a data intelligence challenge needing orchestration. Leveraging this data, Bringg can optimize and automate your supply chain for maximum operational and logistical efficiency.

Learn more about how delivery orchestration here.

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