How to Succeed in Grocery e-Commerce Management

In the spring of 2020, grocery e-commerce experienced a meteoric rise in popularity as consumers sought the touchless convenience of online shopping to protect themselves from COVID-19. Retailers had to adapt quickly, but the process was not easy or cheap.

The firm Mercatus developed a study to help conventional grocery stores understand the process they must follow to succeed in grocery e-commerce.

Although the collective fear of COVID-19 has gradually subsided, many of the habits that took hold during the first two years of the pandemic remained with shoppers, including the preference to order weekly groceries online for pickup (curbside or in-store) or home delivery.

According to Mercatus, research suggests that online grocery sales will account for 20.5% of total grocery sales in 2026, or about $263 billion. The report underscores the importance of grocery retailers investing in e-commerce.

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Brick Meets Click/Mercatus survey from August reinforced the idea: That month, over 68 million households went online to buy at least one grocery order via Delivery, Pickup, or Ship-to-Home. Although the total base of monthly active users (MAUs) for August 2022 is down by just over 1% versus 2021, it’s still up 23% from 2020 and 116% compared to 2019.

Mercatus claims that supermarkets investing in digital maturity are seeing the most significant benefits; digital grocery technology leaders are experiencing more than five times growth compared to laggards.

At a minimum, Mercatus recommends that supermarkets measure the success of their grocery e-commerce sales programs based on the following metrics:

  1. The Total number of completed orders.
  2. Percentage of orders completed for pickup versus delivery (if you offer that fulfillment option).
  3. Fulfillment cost per order (CPO). Consider all associated costs, including direct labor, indirect labor (e.g., returns handling), additional packaging supplies, facility costs if you have expanded your retail presence, delivery service providers, and the cost of managing your online ordering site and application.
  4. The average time it takes to place an individual order, including processing the online order and payment, picking and packing the order; the amount of time all staff spends interacting with the customer.
  5. Average waiting time at pickup. The time it takes for staff to deliver the order to the customer at pickup is a key metric.
  6. Replacement rate.
  7. Accuracy of orders and catalogs. Ensuring that your grocery e-commerce database is up to date, especially when shortages occur, will help improve order accuracy and reduce the need for substitutions.
  8. Customer satisfaction ratings and feedback.
  9. Frequency of new hires or training of existing resources required on an ongoing basis per month/year.
  10. The average time it takes to train and start a new store.