The way people shop for groceries is changing. The “click and collect” eCommerce model—where a customer picks up groceries from their local store after placing an order online—is now more popular than ever, driven in large part by changing consumer habits during the pandemic.

Per Supermarket News in May 2020, pre-pandemic about 4% of US online grocery shoppers were using eCommerce grocery curbside pickup. Research conducted more recently shows that percentage skyrocketing to 31% in March 2020 and 43% by the end of June 2020.

 

 

Warehouse-Worker-and-Shelves

This research also found that the click and collect model has broad appeal across demographics, including 39% of grocery shoppers aged 60 and over per a Consumer Survey conducted by Brick Meets Click and online order fulfillment platform ShopperKit (March 23-25).  Pull all of those results together, and it’s easy to see that eCommerce is quickly changing the grocery shopping landscape. Grocers are adapting to the click and collect business model, working to expand pick-up availability and creating a more customer-centric experience overall.

The Success Of Grocery Click And Collect Depends On Offering An Omni-Channel Experience

For grocery retailers, creating an omni-channel experience involves offering products through a variety of delivery channels, so that customers can choose the method that best suits them, whether that’s ship-to-home, pick-up at the store, or delivery by the store. An August 2020 survey by BMC/Mercatus found that 32% of online grocery shoppers prefer a ship-to-home experience, while 18% prefer pickup at the grocery store.

Traditionally, shoppers have used ship-to-home delivery and curbside pick-up for larger bulk ship items, such as paper products and toiletries; they have preferred to shop in store themselves for produce, dairy, meats, and other items best bought fresh. However, as consumer confidence in the click and collect model grows, increasing numbers of consumers are turning to curbside pickup at their neighborhood stores for all of their grocery needs.

The emergence of micro-fulfillment centers

Grocery retailers are adapting to these new consumer demands in a variety of different ways. When click and collect was first introduced, the typical scenario was for a customer to place their order from an online ordering catalog. The grocer would employee personal shoppers to walk throughout the store picking up the individual items to complete that order. Then, the grocer placed the order curbside or in a storage locker for customer pickup.

Today, grocery retailers are starting to recognize the value of having a more controlled environment for online order fulfillment. In this micro-fulfillment model, customers place orders from a consolidated platform of SKUs and then, these orders are fulfilled at warehouse-like structures, called “dark stores.” Essentially, their dark stores are set up like grocery stores, but without the shopping public. They allow grocers to better control the flow of their personal shoppers, maintain tighter control over inventory, and fill customer orders quicker and more accurately.

In addition, one localized micro-fulfillment center can service multiple different neighborhoods and/or towns, making it easier for larger grocery retailers to fill and distribute online orders, versus relying on each individual store to have their own fulfillment and pickup system.

Improving the grocery customer experience is a key competitive differentiator

Today’s online grocery shoppers want what they want, when they want it—and when they want it is usually as quickly as possible, whenever it’s most convenient for them. Expectations like these have grocery retailers wondering how they are going to keep their customers satisfied. Will they be able to fulfill online orders quickly and efficiently, and do so in a way that is cost effective?

The pandemic intensified all of these concerns, leaving many grocery retailers reevaluating their plans for the future. In this dynamic environment, improving the customer experience has emerged as a key competitive differentiator. But many grocery retailers remain unsure how best to meet their customers’ eCommerce needs and preferences while also maximizing profits.