Online grocery delivery boosts revenue, not profit

spencers

Despite mixed economic benefit to date, grocery retailers are moving ahead with online delivery.

According to “Online Ordering in Grocery: State of the Industry Benchmark,” a new study from retail research firm Incisiv and AT&T, grocery retailers who have offered online delivery for at least 12 months report an increase of 15.8% in incremental revenue, 30% higher than their pre-launch estimates. Most of this growth is net-new addition to the top line, with only 18% of retailers experiencing cannibalization of in-store sales by offering online delivery.

However, the study, based on a survey of 107 respondents, 10 qualitative interviews and Incisiv industry data points, does not reveal purely positive economic results. Other than shipping from distribution centers or drop-shipping by vendors, all other forms of online order fulfillment (third-party delivery, click & collect and curbside) negatively impact grocery retailer profit margins. Profit per order has worsened for three in five retailers who offer online ordering.

Despite this mostly negative profit picture, the study projects digital grocery sales will double over the next two years, reaching $50 billion by 2021 before accelerating further to more than $150 billion by 2025, at which point they will account for 14% of overall grocery sales.

In addition, the number of grocers who offer click & collect and third-party delivery are expected to grow 150% between 2019 and 2021. Three in four survey respondents plan to integrate with third-party delivery platforms such as Instacart by 2021.

Other noteworthy findings include:
• 100% of respondents plan to use advanced analytics to increase basket size.
• 96% of respondents don’t have predictive models that trigger just-in-time ordering to keep pace with online orders.
• 93% of respondents are dissatisfied with their online order picking efficiency.
• 92% of respondents are dissatisfied with their labor utilization for online order picking.
• 81% of respondents do not have a real-time view of inventory.
• 80% of respondents plan to use mobile tools to improve picking.
• 50% of respondents have provided store associates adequate training to support online operations.
• 44% of respondents don’t provide customers clarity on where to pick up online orders.

The study also ranked top supply chain and technology challenges for respondents:

Top supply chain challenges
• Manage inventory 57%
• Ensure on-shelf product availability 52%
• Meeting expected shipping time 34%

Top tech challenges
• Inventory data accuracy/availability across systems 65%
• Implement/extend OM solution 51%
• Order status accuracy/availability across systems 45%

grocery script - groceryncart

Do you need an amazing Grocery app solution for your grocery business? Grocery n Cart is the right choice.

Grocery n cart offers grocery solution like Instacart clone, HappyFresh clone, Grocery script etc. These solutions are high on quality and serve the purpose of ordering groceries with effortlessly and comfort.

Source: https://www.chainstoreage.com/technology/study-online-grocery-delivery-boosts-revenue-not-profit/

About Groceryncart 68 Articles
GroceryNCart is a solution for Instacart Clone, Honestbee clone, Honestbee clone script, Tesco clone, Tesco clone Script, BigBasket Clone, Grofers Clone, PepperTap Clone, HappyFresh Clone, Ola Store Clone. Grocery store creation for customer to order grocery products directly.

Be the first to comment

Leave a Reply

Your email address will not be published.


*