Grocery retail can adapt to survive supply chain challenges this peak season

Fergal O’Carroll
12 September, 22

There are many lessons we can learn from overcoming setbacks, no matter how numerous they are. Retailers can adapt to changing attitudes, buying habits, and expectation of customer experience to find the answers in critical times like these. 

A brighter note is that despite current problems, grocery is still among the fastest growing eCommerce segments, with up to 60 per cent of UK consumers estimated to buy some portion of their groceries online. There’s also evidence to suggest that demand for fresh foods is fast becoming a primary driver of growth in grocery retail. 

It’s the combination of a surge in demand for online ordering and home delivery, and the growing appetite for fresh, perishable food that’s highlighting the inefficiency of current systems. Add the fact that labour and transport shortages, extreme weather, and conflict in Ukraine are combining to disrupt supply, and it’s clear that the questions far outnumber the answers. In fact, logistics and inventory management processes are having to respond to the seemingly relentless pressure of new challenges and demands. 

As we look forward to peak shopping season, getting out in front of the big logistics obstacles is going to be vital this year. To some extent, in fresh grocery and supermarket supply chains, that will mean implementing new technology solutions. 

When supply chains are under such pressure, stockouts and shoratges are are more likely, and last-mile delivery complications more pronounced. It’s becoming a cliche, and for good reason, but end-to-end supply chain visibility is now absolutely essential. Lack of visibility, especially in the shipment of perishable products, leads to inventory shortages, and ultimately, lost income. 

This is all about controlling the controllables, and for me, one of the biggest areas is customer experience. To capture a fair share of holiday season demand, there is no downside to having an effective online shopping and product delivery experience. It’s widely acknowledged that shoppers at low-cost supermarkets are crying out for online shopping and home delivery options. 

Market research firm Appinio surveyed 2,500 UK consumers on their experiences and opinions of grocery shopping. It concluded that expansion opportunities do exist for retailers that can get to grips with customer experience. Around 80 per cent of respondents said they would shop for food online more if the experience was better, with home delivery the preferred channel of 23 per cent, over pick-up in store (6.6 per cent).

The broader eCommerce market is experiencing the growing popularity of timed delivery slots, greener options, expedited shipping, and click and collect. Large numbers of consumers now expect free delivery, and are becoming far more intolerant of last-mile delivery issues. It’s fair to say that grocery retail needs to catch up. 

In a market that is underserved in terms of online shopping, and more flexible delivery options, there is still early mover advantage. Tailoring delivery options at online checkout to match buyer behaviour and preferences, ensures that customers are given the most relevant options to choose from. 

This could include factors like their basket value and dimensions, loyalty scheme membership, when the purchase is made, and the range of delivery services available. With competition fierce over peak season, and expectations of online retail high, those that can provide an exceptional post-purchase experience will attract more business. 

Across the eCommerce market, customer expectations of delivery are undergoing wholesale change. Grocery retail must begin to adapt. It could be time to think seriously about optimising your shipping and delivery process to create a more personalised, customer-centric experience. The race is on. 

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