Supply Chain Management

A grocery order typically has a large number of order lines (items) when compared to an order for non-food items. (The average order value may not be comparable though!). Since the typical homemaker tends to buy the same product/brand month after month after month, retailers attempt to attract/retain them by simplifying the experience of placing the order. This is done by offering functionality on the website/customer service application to retrieve and modify previously placed orders to reduce the order creation time and providing the ability to save (in a  technically secure manner) the customer's payment details for future use.

In case of food products, the delivery method preferred by a grocery shopper is one that offers her the flexibility to choose a date/time slot of her convenience at which the order is to be delivered. While this is convenient from the customers' perspective, it presents the retailer a few challenges:
1. Building the infrastructure (warehouses, depots, stores) to deliver 'fresh' produce and other food products to the entire delivery area.
2. Building the transportation processes and capability (either in-house or by contracting with a carrier) to be able to deliver at chosen slots
3. Providing an easy-to-use interface during order creation for the customer to be able to select the slot of her choice
The opportunity here for retailers is that the infrastructure built can be used to not only deliver food products, but can also be leveraged to deliver non-food products ordered by the same customer. The other opportunity here is for the retailer to charge a premium for the most preferred delivery slots. For example, the 7-9am delivery slot in the morning may have a shipping charge of $15 while a slot between 1-3 pm on the afternoon may be priced at $10.

I will discuss a few more differences in my next post. In the meantime, do let me know if you have any comments.