Is In-Store Picking a Viable Fulfillment Model?
eCommerce fulfillment is a hot topic these days, with dozens of third-party partners vying for the attention of grocery chains, and grocery chains hunting for the most cost-effective, efficient, and scalable solution. With each passing quarter, industry players are discovering new aspects of various fulfillment strategies, which sometimes results in more questions than answers. What works long-term, versus what methods are merely a short-term fix? What new technologies are emerging that can simplify and optimize the process? What are the biggest issues grocers face when striving to create a sustainable, profitable fulfillment strategy?
An Overview of eCommerce Fulfillment
In recent years, as retailers have taken their business online, consumers have learned to expect more and more from their digital shopping experience. Fast, efficient home delivery – sometimes as fast as one hour – has become the norm, which means that competition among grocers is fierce, especially with Amazon blazing the delivery trail.
Consumers increasingly prefer same-day pick-up and delivery, yet many grocers are ill-equipped to provide that service efficiently. Building an infrastructure that’s capable of handling omnichannel fulfillment takes time – which is why many grocers first turned to in-store picking.
At first, this method made sense. Grocers could outsource fulfillment by bringing in contracted workers, often called “shoppers,” who would physically walk the store’s aisles and pick each item off the shelf, then either deliver the order to the customer or place it in a designated pick-up spot, usually a repurposed shelf or corner within the store.
But this method quickly proved too problematic to be a viable long-term solution. Why?
What’s Wrong with In-store Picking?
- It’s not scalable. Because this method relies on human contractors working within a physical space, there are limits to how many orders can be fulfilled at one time. This means online customers will face longer waiting times, which will often spur them to buy from a competitor.
- Congestion in the Aisles. Third-party fulfillment workers sharing space with in-store shoppers means crowded stores, longer lines, and a diminished in-store experience.
- No inventory visibility. This method makes it more difficult for stores to keep an accurate inventory, which leads to…
- Escalating Out-of-Stocks. Both in-store customers and third-party “shoppers” picking from the same pool means that shelves empty fast and store employees can’t keep up with replenishment. Out-of-stocks are extremely damaging to customer loyalty and a reliable way to send consumers straight to your competition.
These issues have all been exacerbated during the Covid pandemic, as online sales reached record highs, adding sustained pressure to grocers to fulfill online orders quickly and efficiently. Without a reliable way to solve these problems, many grocers saw a decrease in sales, lower profits, and disgruntled customers.
The Solution: Evolve Your Fulfillment Strategy
Fortunately, in-store picking isn’t the only fulfillment method available to your grocery business. Fast pick areas, dark stores, micro-fulfillment centers(MFCs), and omni-stores are strategies grocers can implement to be more efficient and to improve inventory accuracy as part of providing a better omni-channel experience to their customers.