The shift to grocery e-commerce has retailers hungry for fulfillment improvements and supply chain efficiency gains. BY HELEN MANN IF you’re like most consumers, you probably spent a lot more time at home in 2020, and spent a lot more money online. E-commerce purchases rose in categories ranging from furniture and home improvement to bicycles and gym equipment. One of the most acute shifts was in grocery e-commerce. Prior to the onset of the pandemic, 7% of grocery shopping was done online, according to a MasterCard Economics Institute report. The pandemic pushed online grocery shopping to 10% by the end of 2020. Going forward, Mastercard expects 70% to 80% of that shift to be permanent. This is great news for grocery merchants who are on top of their game, but it comes with a side order of supply chain challenges. Accommodating a new deluge of orders left grocery retailers with a mountain of concerns to iron out, nearly overnight. “Prior to the pandemic, 52 cents of every dollar was going to food service outside the home,” says Doug Baker, vice president of industry relations at the Food Industry Association. “COVID moved much of that business toward grocery. Online retail growth exceeded 300% in the first few months of 2020.” As a result, many of the usual grocery delivery challenges, such as temperature control and inventory management, were amplified as order volume ramped up. Take omnichannel. Integrating products into one sales channel is something that grocers have been working at for years, but the pandemic forced them to accelerate its adoption. Grocers had to quickly grow the assortment of products that they sold online. “Food retailers had to move an assortment that they previously sold only in stores into the omnichannel space, so they could offer everything to consumers,” explains Annibal Sodero, assistant professor of marketing and logistics at Ohio State University. “This challenge existed before COVID, but the pandemic magnified it.”
June 2021 • Inbound Logistics 31
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