Over the last five years, grocery chains have begun offering online shopping experiences to their customers in a few different shapes and forms. Some grocers have built their websites and fulfillment operation in-house. Other food retailers have worked with white-label partners such as Self Point to use their e-commerce and fulfillment platforms. However, a large portion of grocery chains have signed up with Instacart or Shipt and outsourced their e-commerce business to these affiliate marketplaces. Unfortunately, these grocers may not realize that they have positioned themselves as warehouses for the affiliate marketplaces. Grocers have chosen affiliate marketplaces because there is no marketing, additional labor, or delivery infrastructure required to set-up and get started. Affiliate markets are seductively simple and appear to be turnkey e-commerce. However, many grocers may not be aware of the abundant risks to their business!
Many industry experts are writing about, the affiliate marketplace is a dangerous move for retailers. Like my dad always says, "Cheap is expensive." What he means, is that when you do something the cheap and easy way, in the long run, it will cost you more, and you'll potentially lose it all. In this case, retailer are taking the cheap path by signing with affiliate marketplaces, they do not own the customer experience, and the customer and transaction data belongs to the affiliate marketplace. Retailers are handing their hard-earned customers over to the affiliate marketplaces on a silver platter which will eventually be expensive.
So what is the alternative solution for grocers?
At the risk of oversimplifying this, I have broken down selling online into three categories: 1) Marketing, 2) a Great Website, and 3) Order fulfillment. The marketing will drive traffic to your website, the website needs to be great to convert browsers into customers, and the fulfillment is where the magic happens. To quote my friend, Doron Bakchy, CEO and founder of Bringoz, "e-Commerce is great until it hits the dust of fulfillment."
Let's start with Order Fulfillment. Tony Hsieh, CEO, and Founder of Zappos understood when he founded Zappos, that for the customer to trust buying shoes online, the customer experience would need to be above and beyond what he could expect. To quote Tony, "We believe that the speed at which a customer receives an online purchase plays a significant role in how that customer thinks about shopping online again in the future, so at Zappos.com, we have put much focus on making sure the items get delivered to our customers as quickly as possible." Amazon also recognized that the speed and quality at which a customer receives an order determines whether or not they shop online at their website again and started Amazon Prime. These two services have elevated the expectation of the consumer to the point where next-day delivery, and in some cases same-day delivery is a must for customers to consider shopping online.
So how can grocers go about having a white-label website, and fulfill orders at the same speed and excellence as Amazon and Zappos, or more importantly, as the grocers across the road using an affiliate marketplace?
The leading hurdle grocers face when starting to sell online, is how they will fulfill the orders. Fortunately, there are many ways a grocer can pick and deliver an order efficiently and cost-effectively that will satisfy their customers' demands. The first is using in-house labor with the help of a picking app by Self Point, and a delivery management software like Bringoz. The second is to outsource the work to companies like Jyve.com to pick the order and deliver with a 3rd party delivery company like Deliv. The third delivery option is a combination of the two.
Eli Yehezkel, Self Point's Director of U.S. Operations and a former grocer, tells us that using a combination of the two is the most cost-effective and control-able option. "Using our in-house staff to pick orders at regular capacity, and beefing up with 3rd party labor companies for peak delivery times, gave us the flexibility to grow at a low cost."
Eli also talked about the efficiency of Self Point's picking application, "Before we started using the picking app, we would receive orders over the phone and via email. Our employees would then pick the orders with paper and pen. Using the app, we were able to decrease our picking cost by 50%, and our customers love it because we don't have any mistakes."
Jyve is a company that, among other things, provides in-store picking labor, taking away the need to hire an army of pickers to begin selling online. Grocery chains can partner with Self Point for their website, partner with Jyve for picking, and with Deliv for delivery, making eCommerce easy to start and scale gradually. This also gives them full control of their customer experience, owning their data, and scaling without the need to hire an army upfront.
The best news of all is that working with Self Point, grocers can choose the partners and services that suit their business needs best. Self Point already has relationships in place so that you don't need to work with each partner individually. Our established process allows grocers to create a mobile-first, online storefront, with full infrastructure in a matter of weeks.
Click below to email us to schedule a meeting with one of our specialists. Learn more about how we can help build your website and keep your customers happy, providing them with the service they expect, while maintaining your data close to home.