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 essentially 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 – including me – are now writing about, the affiliate marketplace is a dangerous move for retailers. Like my dad, Partner at VC Fund Olive Tree Ventures, Mayer Gniwisch always says, "Cheap is expensive." What he means is that when you do what is cheap and easy, in the long run, it will end up being expensive, costing you more, and potentially losing it all. In this case, the retailer does 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. See this article for more information on the matter, read more.
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 main hurdle grocers face when deciding how to start selling online, is how they will fulfill the orders. Fortunately, there are many ways a grocer can pick and deliver an order, in an efficient and cost-effective matter 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 Delivery Solutions. 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 in-house staff to pick orders at regular capacity, and beefing up with third-party labor companies for peak delivery times, allows grocers to keep their cost down while maintaining a high level of service."
Eli also commented about the efficacy of the Self Point picking application, "Before we started using the Self Point picking applications, we would receive orders over the phone and via email, and our staff would pick the orders with a paper and pen. Once we started picking with the Self Point picking app, we instantly saw a 30% decrease in the amount of time it took to pick an order, and our customers loved it because we didn't have any mistakes."
Jyve is a company that provides a service to grocers to pick and pack orders in-store for them, taking away the need to hire an army of pickers to begin selling online. Partnering with Self Point for the website and management system, with Jyve for picking, and Delivery Solutions for delivery gives grocers the ability to sell online on their white-label website, enjoying full control of the customer experience and data, while also scaling in a timely manner without the need to go on a major hiring spree.
Tom Kooser, CIO, Total Wine & More, works with Delivery Solutions and here is what he had to say about them, "Delivery Solutions, as a middleware solutions provider, offers Total Wine & More true flexibility to help our complex delivery business. They provide an effective resource that allows us to optimize our delivery approach,"
The best news of all is that working with Self Point, grocers can choose the partners and services that suit their business best, and Self Point already has the 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 in a matter of weeks.
Click the link below to schedule a meeting with one of our specialists to learn more about how we can help you build your website and keep your customers happy by providing them with the service they expect — all while maintaining your data close to home.
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Mendel Gniwisch VP Business Development
I am Mendel Gniwisch.
I have been working in the grocery industry for the last few years, developing strategies for grocers to advance into the digital age. I love to spend time with my family, my work, skiing, and studying the craftsmanship of cigars and whiskey. I'm always happy to learn from anyone I can and love driving positive change in organizations and industries.