Blog Posts Fulfillment Strategies for Food & Beverage Ecommerce
- Grocery retailers and food and beverage companies are adding ecommerce sales channels to meet consumer demand.
- Online orders can tax traditional fulfillment and distribution operations.
- Incorporating effective fulfillment strategies can help to keep customers coming back.
The coronavirus pandemic has prompted a sea change in consumers’ food and beverage buying habits. A record number of shoppers are opting to purchase groceries online, and they’re likely to continue doing so. A new study projects that ecommerce grocery sales will surpass $250 billion by 2025 – more than double the current market share.
In response, grocery retailers and food and beverage companies are scrambling to expand their ecommerce offerings. Home delivery and curbside pickup, web stores, mobile apps, subscription services, and marketplace sales are fast becoming commonplace.
Adding ecommerce sales channels can be more complicated than many companies anticipate, cautions Perry Belcastro, Saddle Creek’s Senior Vice President of Fulfillment Services. Traditional warehousing and distribution operations are often ill-equipped to accommodate the intricacies of ecommerce fulfillment. Common challenges include piece-picking individual orders, handling fluctuations in order volume, accommodating the need for more space and labor, and meeting consumers’ increasing service-level expectations.
In a new column for Food Logistics, Belcastro details the complexities of selling food and beverage online and recommends several strategies for effective order fulfillment.
Following is an excerpt…
Food & Beverage Ecommerce: How It Impacts Order Fulfillment
The following strategies can help to deliver a positive ecommerce experience that will help to build customer loyalty.
- Position products close to consumers
Using multiple distribution centers in strategic locations allows companies to meet consumers’ expectations for fast, free shipping – often via more cost-effective ground service. The closer products are to the end customer, the faster and more economically they can be delivered.
For additional responsiveness, tagging, labeling, assembly and other customization functions can be moved closer to the customer as well.
While some grocery retailers fulfill orders from store locations, this can cause congestion and hamper the in-store experience for customers. Dark distribution centers or micro-fulfillment centers can be a more effective option.
- Keep an eye on inventory
If products are stored in multiple locations, it is important to maintain a single view of inventory enterprise-wide to ensure accessibility. Utilizing an order management system (OMS) can help to improve visibility and determine the best source from which to fulfill orders for optimal service.
An OMS also can help to provide information on product availability and identify the potential for out of stocks and back-orders.
- Scale to suit demand
To provide responsive service, fulfillment operations need to have capacity to handle the maximum potential volume, even when business slows. Flexible space and staffing are critical to accommodate business fluctuations and prevent service failures.
The right facility design (with the optimal aisle width, racking and shelving, etc.) can also help to ensure adequate space for peak order processing.
- Find the best delivery options
When it comes to shipping, it is important to strike a balance between cost and service. Parcel analytics and rate shopping software can help to find the most efficient and cost-effective shipping options to meet service expectations. Establishing relationships with carriers can also be helpful.
Strategies like these can help grocery retailers and food and beverage companies to attract and retain online customers. However, implementing them in-house can be difficult, particularly in the current environment.
Outsourcing to a third-party fulfillment provider often proves to be an effective option. With an established distribution network, flexible resources, robust technology and ecommerce expertise, an experienced 3PL can serve as a reliable guide in an uncertain landscape.
Read the full article.
Related to: COVID-19, Food & Beverage, Omnichannel, Selling Online