TOP TAKEAWAYS
- 97% of grocers say they view improving product availability as their top technology priority
- Produce and center store products are the top two categories where grocers say they could use more options for fulfillment
- 59% of grocers say they are dissatisfied with their ecommerce fulfillment solutions
Some 89% of grocers say they believe optimizing fulfillment is key to improving digital profitability in the industry, according to a joint report from FMI — The Food Industry Association, retail planning platform Relex, and insights firm Incisiv.
The report examines the importance, challenges, and impact of strategic fulfillment within the grocery industry. With 69% of grocery sales in 2023 being digitally influenced, the report says the omnichannel grocery experience has become more critical. However, profitability still remains a significant challenge, with $23 billion lost in digital sales due to unavailable or unsubstituted items in 2022.
“Digital offers immense potential for growth. However, for that growth to be profitable, grocers must improve their fulfillment operations considerably. Grocers can unlock the opportunities presented by optimizing availability, enacting more strategic fulfillment methods, and harnessing the power of AI to improve their margins,” said Gaurav Pant, chief insights officer of Incisiv.
Other takeaways from the report include:
- 97% of grocers say they view improving product availability as their top technology priority, followed by using technology to better balance workload and orders (89%)
- Produce and center store products are the top two categories where grocers say they could use more options for fulfillment
- Close to 90% of respondents stated that better optimizing their end-to-end order fulfillment methods will get them the best opportunity to improve profitability
- 59% of grocers say they are dissatisfied with their ecommerce fulfillment solutions
FMI Vice President, Industry Relations, Doug Baker said, “Technology is enhancing customer loyalty and retention; Since 2019, among the wide range of applications we see in our operations analyses is that most food retailers have been experimenting with new technologies to improve customer experience and efficiency, relieve margin pressures, shore up labor limitations, and improve ecommerce capabilities. Key strategies have included shopper loyalty programs and a checkout experience focused on speed that is frictionless.”
