Since 2020, many major grocery chains have struggled, with chains like Kroger, Giant Eagle, and more shutting down hundreds of stores. If you want to buck the trend, you need to do something different.
The secret to thriving is staying ahead of the curve and turning emerging trends into profitable opportunities. Online grocery shopping is the norm now. Maybe not for all your customers, but it’s fast becoming an integral part of our lifestyle.
Advancements in technology and changes in consumer behavior are dictating the direction of retail. But with this rapid evolution comes a new set of challenges — rising costs, inventory management struggles, labor shortages, and supply chain pressures — to name a few.
To ensure you turn trends into opportunities, let’s explore the major trends of online grocery fulfillment, so you can learn how to capitalize on them for profitability.
Why Online Grocery Fulfillment Is the Future
It’s here to stay; online grocery shopping is the new normal. Many people still shop in brick-and-mortar grocery stores, but the convenience of having fresh produce, pantry staples, and gourmet ingredients delivered to our doors is transforming how we shop.
While it’s great for the customer, it can be a logistical minefield for grocery store operations. From inventory management to packing orders and delivering them to the customer, grocery fulfillment requires a great deal of coordination.
Technology drives innovation and growth in online grocery fulfillment. Driven by consumer behavior, many grocery stores are exploring an omnichannel approach, leveraging artificial intelligence (AI) to forecast demand and ensure that customers get fresh groceries delivered on time.
At IT Retail, we’re helping forward-thinking grocery store owners keep their customers happy. Grocery store owners face rising costs and labor shortages. But with features like integrated e-commerce capabilities, advanced analytics, and automation, IT Retail supports businesses in their journey to profitability in online grocery fulfillment.
Related Read: The 5 Best POS Systems for Grocery Stores Available
Still, the market is constantly changing, and we want to give you some extra help. What trends can you look out for this year?
Trend #1: The Omnichannel Approach
Your customers want a fast, convenient, and seamless shopping experience. The lines between physical and digital shopping continue to blur, and because online shopping is so prevalent, adopting an omnichannel approach is a must. So, how can you provide a unified experience?
A popular example is BOPIS (buy online, pickup in store). In 2022, 37 percent more consumers used BOPIS for their most recent purchase than in 2021. And it’s not just because it’s more convenient. Supply chain issues impact delivery times, leaving shoppers worried their groceries won’t arrive. Add rising shipping costs, and you have a perfect storm.
Related Read: Brick-and-Mortar vs. E-Commerce: Which Is Best?
To avoid the storm, shoppers would rather order online and forgo delivery conveniences in favor of BOPIS. It’s a win-win. They — and you — can save on delivery costs.
Providing a consistent experience across all channels helps attract more customers, retain your current customers, and drives sales, improving profitability.
Pro tip: Use your POS system to unify your online and physical operations. Manage inventory in real time across different channels, streamline order fulfillment, and provide insights into customer behavior across different shopping platforms, so you can deliver personalized offers.
Trend #2: High-Demand, Low-Competition Products
It’s no secret that consumer prices are rising. And it’s not your fault! With higher manufacturing and logistics costs, optimizing for profit is critical. How does focusing on high-demand, low-competition products help?
When you identify the right products based on consumer preferences, you can stock your virtual shelves and drive revenue. You’ll need to understand your customer base, monitor market trends, and leverage your POS data.
Let’s say you discover that locally sourced, organic products are a favorite among your customers, and you have little competition in your area. You also notice that imported goods don’t contribute positively to your bottom line. This data lets you focus on locally sourced products online and in your store.
Pro tip: Use your POS system's sales analytics to identify which products fly off the shelves and which don’t, and which have a high profit margin and low competition. You can even plan promotional campaigns! Optimize your inventory and drive profits, even in competitive markets.
Trend #3: AI and Machine Learning for Demand Forecasting
Predicting consumer behavior and trends can be difficult, but it’s the holy grail for many businesses.
Thanks to AI and machine learning, it’s becoming far easier — if you know where to look. With advanced technology comes vast amounts of data, so identifying patterns and trends is almost impossible to do manually.
But with AI and machine learning, you can accurately forecast demand, optimize inventory, reduce wastage, and maximize profits. Your grocery store can thrive with inventory management more in tune with customer demand. Let’s look at an example.
Related Read: How Do Grocery Stores Manage Inventory? 4 Core Ways To Be Successful
Your POS system analyzes past sales data, considering seasonal trends and promotional events. It notices an uptick in sales of baking ingredients during the holiday season and more demand for healthy snacks in January (New Year’s resolutions, anyone?). With these insights, you can predict future demand more accurately and ensure your online store is stocked well — you might even create online promotions to increase cart sizes!
Pro tip: Some POS systems come with prebuilt, customizable reports. Harness reports and insights to ensure your inventory aligns with consumer demand and reduce the chance of overstocking or understocking.
Trend #4: Localized Delivery Models
If your customers want fast delivery and locally sourced products, hyper-local delivery could be a service your store offers. The idea is simple: Connect local sellers with customers in their immediate vicinity for faster delivery and fresher products.
There are various benefits — like speedy deliveries, local business support, and an increased customer base. Let’s say your store decides to offer a same-day delivery service for customers within a mile of your physical location. As soon as an order comes in, you can deliver fresh produce within a few hours of the order being placed.
Pro tip: Some POS systems enable the hyper-local approach. POS software can manage delivery zones, assign orders to local delivery personnel, and provide real-time status updates to customers. In addition, it helps maintain optimal stock levels at various local distribution points based on local demand.
Trend #5: Automation To Reduce Costs
Time is money, and online grocery fulfillment can be costly without the right tools. Automation is a powerful tool that helps you save time, reduce costs, and increase efficiency. Let’s use customer service as an example.
Customers want 24/7 support. Meeting this demand is difficult and prone to inconsistencies and errors. Chatbots are a great way to automate some of the process. Chatbots offer instant, consistent responses to customers' questions anytime, saving you time and money on customer service personnel.
You can even automate inventory and fulfillment. Picking, packing, and preparing orders for delivery can be done automatically with incredible speed and precision, reducing manual labor, minimizing errors, and speeding up order fulfillment.
Automating these repetitive tasks allows businesses to dedicate human resources to areas that add more value — such as strategy, customer relationship building, and product development. This is an innovative and highly profitable approach.
Pro tip: Use your POS system to automatically update inventory levels after every sale, reduce the time spent on manual stock checks, and eliminate stock discrepancies. Your POS system can also automate sales reports, track deliveries, and even integrate with customer service chatbots — saving you time and money.
Profitable Online Grocery Fulfillment: It’s Possible
Online grocery fulfillment is evolving in ways that enhance profitability, streamline operations, and meet consumers' changing expectations. You need to define the strategy that works for your store and use the tools that make it possible.
Your POS system is a partner in driving modern processes. It’s not just a tool for transactions. With valuable insights into product performance and sales data, you can make data-driven decisions, streamline inventory management, reduce wastage, and ensure you never miss a sale.
IT Retail provides grocery store owners like you with the tools to enable profitable online grocery fulfillment. With e-commerce integration and a vast delivery network, we enable our customers to get their stores online quickly. Want to find out more?
