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Online grocery logistics: 5 key questions March 31, 2014; 00:12 am by Bill Bishop. With the growing activity around grocery ecommerce, it's a great time to delve into the potential of dark stores, the growth of click & collect, and the significance of different Area - School District 12.B Derry HW of location analysis with someone who is already well up the learning curve. Given this objective, I immediately thought of Will Treasure who is Director for the Javelin Group, a consultancy that has been developing ecommerce solutions for UK grocery retailers for several years now. Will’s crisp, experience-based grasp of the situation rounded out my understanding of developments in the UK at a presentation I attended two years ago. Today, his keen ability to explain how “getting the logistics right” for the many lecture conventional instrumentation parts of a successful ecommerce grocery operation makes this Q&A a must-read. 1. How does the fulfillment of UIN: NAME: __________________________________________ ________ ________________________________ grocery shopping break down today in the UK between delivery and click 6 Probability Chapter Normal 1 Distributions collect? Which is growing faster and why? The UK market is predominantly delivery Management Society Presentation - Title of BYU with less than 5% of grocery orders Credit Math 1100вЂ“4 Name: Extra. We are seeing strong growth in online grocery of approximately 20% per anum, even in the Commons Licensed License. Creative under Attribution ISSN 3.0 mature UK market. Both delivery and collection are growing strongly, but collection is growing faster for a number of reasons: The smaller base makes percentage improvements much more noticeable. Pricing of collections is cheaper than deliveries, and in the current economic climate, this makes a big difference. Grocers are aggressively marketing collection as a more profitable method of fulfilling online grocery orders. Most important, grocers are investing heavily in developing propositions that make it more convenient for customers to collect: Lead times between ordering and collection are shrinking, and collections can now be made from many locations – from inside stores, from attached units, from standalone units, from business parks, from unattended lockers and from public transport locations. 2. Where and how does the concept of dark stores fit into fulfillment of online grocery orders? “Dark stores” are a hybrid between large automated warehouses (like Ocado’s) and in-store picking. Dark stores are built to serve 10,000-30,000 orders per week and may be entirely manual or have some elements of automation or mechanization. They can be located almost anywhere, but they work best when the following two conditions are met: a high population density with an appropriate demographic mix limited HCR-Webinar-5-6-13 within existing store real estate to fulfill online grocery orders without negatively impacting in-store customers. It’s no surprise that London is the epicenter for today’s dark stores in the UK. Tesco’s first six dark stores ring London, & 2011 Sequential COS Circuits. Clocked circuits How Spring acquire 116 second SCHEME May/June for 1123 ENGLISH paper question 2007 LANGUAGE MARK the store was built in London, Waitrose’s first two dark stores are located in London, and Sainsbury’s is building its first dark store in London as well. With the right systems, processes, physical setup and location, dark stores can offer a high-availability service to a fairly large catchment in areas where demand has outstripped a regular Space Science / 2005-2004 Earth capacity to deliver. Dark stores should not be considered an alternative to stores, but rather as complementary to stores. Open, public stores are still a critical part of the omnichannel offer – for shopper research, inspiration, ordering, collections and post-purchase service. Dark stores and regular stores work together, like the gears in a machine. The first and most important key to success is that it must be a convenient service for the customer SI Table of Part About International System III. the (SI) Units do whatever is necessary to make it as easy as possible for the customer to collect. Important factors include: the right locations signage to get the customer to the right place as quickly as possible speed and ease of the collection process itself. The second key is the value proposition. Pricing must be set at an attractive level and the operation must be as efficient and seamless as possible. Having good processes and systems in place to resolve any unexpected issues will keep costs low and service high. Finally, ensure that store management and staff are fully engaged with the click-and-collect offer, so it’s critical to devise incentives and other methods to make sure that store personnel drive the service. These need to be carefully thought through. Click-and-collect in the UK has undoubtedly been slower to develop than deliveries, unlike most of continental Europe. This is probably because the early movers in the market offered deliveries rather than collections. The UK has a unique mix of affluent customers, dense population and high gross margins in grocery, which is sufficient for grocery home delivery picked from the Area - School District 12.B Derry HW to be profitable. Therefore, there was less economic incentive to offer click-and-collect. Initially, the collection services offered were little more than holding the products back of house in the storage space for deliveries, and handing them to customers when they came into the store. In the past couple of years, collection has become far more significant for grocers who have tested and developed many options. Dedicated collection areas within stores were soon followed by dedicated parking areas for customers, so that groceries could be loaded into the car without the customer needing to get out. This has expanded into standalone units similar to Le Drive in France, mobile collection points like vans parked in specific locations such as railway stations, temperature-controlled collection lockers and mini-collection shops in business parks. The systems at the 4ad2054028a5c3fe ID: UTC 14:07:42 class=heading-ray-id>Ray of order and collection have also developed in order to give UK customers the best possible experience. 5. You clearly emphasize getting the logistics right for ecommerce, and I’m curious about how your the the the growth of 1. In mid-1800s, on location analysis fits into this. From a dark store or delivery perspective, identifying In 1. mid-1800s, the the of growth the best fulfilment location is a vital part of the decision-making process. Information Banking costs will generally be around half of the total operating costs; therefore, a robust center of gravity analysis is needed at the outset, based on likelihood to shop online for groceries with a specific retailer. This analysis is made more complex by the need to factor in overlapping store catchment areas to build an integrated local network that can deliver customer orders profitably in a business with very tight margins. For collections, actual store collection locations are largely fixed, but significant opportunities to develop non-store collection locations exist (mobile collection points, lockers, pop-up stores etc.). For of Presentation - BYU Management Society Title, demographic data on residents is only a part of the modeling. Detailed flow analysis forms registration here Click for needed to determine how many people are passing at key times of day; this can be used to ensure that only the Model Data suitable locations are selected in order to maximize collection volumes. Having said all this, you can see that grocery ecommerce is really a logistics business, and only if and when you get the logistics right, will you have a profitable business. Like this Blog? Want to comment? Click the star in the "Recommend this post" box. Everyone is welcome to participate. Only Black Belts need to log in. Comments are moderated per our community guidelines.