Our latest white paper entitled ‘Taming the E-tail Tiger’ takes an in-depth look at the logistical and storage challenges facing the e-tail sector in the UK as online ordering continues to grow in volume and popularity year after year. Here we take a look at the fifth chapter of this white paper which examines the grocery market in detail.
Supermarket storage and logistics challenges
Online orders account for a relatively small percentage of the total spent on groceries in the UK (5% in 2014), but this is expected to rise steadily and double over the next five years – and when you consider overall this market is worth 174.5 billion, food retailers should already be taking e-tail very seriously.
Rivalry between the major players in this industry is well documented, with different competitive pricing strategies in use. When you couple the varying impact these have with the logistical options e-tail brings, it’s clear that no ‘one fits all’ solution will serve as a quick win.
Retailers now have a variety of fulfilment options, such as picking online orders from their stores, using existing distribution centres, opening dedicated e-fulfilment centres or utilising a combination of these depending on the density of customer orders.
The complexity of the grocery sector supply chain is even further compounded by the nature of the goods being stored. How do retailers find a single solution for fresh, ambient and frozen products that all require storage at different temperatures? Add click and collect and home delivery options for consumers into the mix and the picture gets even more convoluted.
So what are the solutions? Lockers and dark stores
Our white paper suggests a number of ways e-tail grocery businesses can start to make their supply chains more e-tail friendly.
One potential solution to the issue of mixed temperature deliveries is using ‘cold’ lockers. Lockers are gaining popularity as a method of receiving goods and temperature regulated lockers can be used to storage chilled or frozen products for customer collection.
Dark stores are an effective solution for meeting large volumes of e-tail orders. This refers to warehouse-built stores that are similar to traditional supermarkets, but which are not accessible to the general public. They are designed to increase picking efficiency – letting staff process twice as many orders as normal.
Whatever option works best for your business, careful stock management is vital and as the UK’s leading storage experts Link 51 can supply Pallet Racking, Shelving and Lockers to help you reach your e-tail goals.
One thing is for sure, e-tail is here to stay and with customers likely to spend up to five times more online than in store – nowhere will the effects of this be more noticeable than the grocery sector.
Why not click here to download our e-commerce white paper in full or call us on 0800 169 5151 to speak directly to a storage expert about your requirements?