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Managing Inventory in the Age of Grocery Delivery and Curbside Pickup

Michael Wilson | Nov 29, 2018

Category: Hospitality

Digital communication is changing the way we connect, work, and shop. Grocery stores and big box stores are faced with the need to constantly evolve to meet growing consumer ...

Digital communication is changing the way we connect, work, and shop. Grocery stores and big box stores are faced with the need to constantly evolve to meet growing consumer demand for near instant and effortless fulfillment. Due to this increase in demand, managing inventory can be a challenge, but consumer interest in these services makes it a necessity. From Target’s second try at curbside pickup to the rise of personal shopping brands like Shipt and Instacart, grocery retailers are working hard to meet consumer needs and win the curbside grocery wars.

Curbside Pickup is Impacting the Way Consumers Shop

Big box stores and grocery chains are increasingly adopting a streamlined, easy to use online ordering system—one that allows the consumer to shop, checkout and receive orders without even leaving the car. Walmart offers curbside pickup, Target just relaunched a curbside plan, and several other brands have followed suit. According to a recent report from research firm Nielsen, about 55% of consumers either have ordered groceries online (for delivery or curbside pickup) or state they intend to in the future.

With half of all consumers indicating a preference for e-commerce shopping for groceries, stores have had to either begin offering this type of service or risk losing shoppers to competitors willing to comply with the rising demand. According to RetailDive, offering curbside service could be a way to cement consumer loyalty and become part of the consumer’s daily life.

The Rise of Grocery Delivery

Some brands take delivery a step further; e-commerce sites like Shipt and Instacart charge consumers a fee for selecting, purchasing, and delivering groceries and big box store items. Brands like Target, LIDL, BI-LO, and more offer customers a convenient way to shop online and simply have the items in question delivered.

Delivery and curbside pickup are making it easy for the average consumer to access concierge- level service that was a luxury for people who could afford a personal shopper or assistant to handle these tasks. Today, the availability of delivery and pickup offers real convenience for consumers for a small price tag and could be a differentiating factor that leads consumers to choose one brand over another.

In-store Pickup Stocking Challenges

Although consumers love and respond to curbside grocery pickup, stores face challenges in managing inventory and fulfilling orders. The convenience of the ordering process is lost if the order is not ready on time and there is little benefit to the store if managing inventory becomes so challenging it eats into profits and disrupts in-store shopping.

The challenge is greater for grocery chains and big box stores that offer grocery pickup; according to Supply Chain Drive, these stores have more of a burden since produce, meats, and other items have a short shelf life.

We Want It Now!

The convenience of curbside pickup and the entire process hinges on successful inventory management and the ability to properly fulfill orders. Items that are displayed online for the consumer- facing side, need to actually be available in the store and added to the customer’s market basket. If too many pieces are missing or unavailable, the convenience of the process is lost—and instead of cementing loyalty, the store could inadvertently drive the customer away.

How to Keep up with Changing Demand

Consumer demand and competition from other brands could drive you to offer curbside pickup—but unless you are truly ready, the process could backfire. According to Nielsen, the following strategies can help with managing inventory and implementing a successful program:

Maintain accurate inventory: In your online offerings, your inventory and offerings need to be truly up to date; ideally, any product offered in-store should be in stock at the warehouse to avoid consumer frustration.

  1. Learn the market

The items that customers buy in store may vary from the ones they order. The best way to determine what should be in stock is to track consumer trends for your brand and adjust inventory based on your results.

  1. Choose the right items

Non-perishable, non-breakable items are ideal candidates for curbside pickup; if your in-store team is the one pulling the items, they need to pack anything that is perishable or breakable with extra care.

  1. Choose the right team

Your pickers and pullers need to be your rockstar employees—if they include rotten fruit, the wrong flavor chips or diet soda instead of the full sugar version, your customers won’t be happy.

  1. Create dedicated parking

Set aside several parking spaces that clearly define where the customer should pick up their groceries. Convenient parking makes it easier for you to fulfill orders and for the customer to accept delivery, according to RetailDive.

The rise of consumer interest and the need to keep up with the competition could propel more grocery brands and retailers to offer curbside pickup and other options for consumers, simply to keep up with demand. Understanding your market, what your customers buy and creating a system that allows your team to swiftly and accurately fulfill orders and reap the rewards of offering this popular shopping model.

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