Efficient Grocery Logistics: Pathways to Better Customer Loyalty and Profitability
Kirk Knauff, President and Chief Executive Officer, Kaleris
By examining their logistics processes, grocers can make substantial gains in delivering excellent customer experiences – which drive preference and loyalty that help their bottom line. Several logistics operations are prime candidates for optimization with technology, ensuring products make their way from the distribution center to the store as quickly and efficiently as possible so the freshest products are readily available to customers. Operations grocers should evaluate include:
Inbound and outbound logistics: Create the best plan to pack and load both store orders and return shipments with purpose-built software that can handle all SKUs - dry goods, frozen foods, produce, and more.
Route optimization and dispatch efficiency: A grocery transportation management system can look across multiple constraining variables, including the number of trucks, available drivers, distance, pick-up time, order splits and commodity separation to assign work orders and delivery schedules to drivers, streamlining dispatch and providing drivers with the most efficient route from the DC to the store.
DC yard workflows: Using a yard management system to direct yard operations boosts productivity while also reducing operating costs. It helps grocers save money on fuel and maintenance for their truck fleets by reducing idle time. Advanced planning tools for trailer pre-cooling and waving stages for combination loads enhance profitability by preventing inventory loss from spoilage as well as stockouts that drive customers to a competitor’s store or website.
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This study was conducted in Fall 2023 as the fourth annual installment of a grocery ecommerce study that Ipsos has conducted since 2020. This study was designed to differentiate between three different fulfillment methods of obtaining grocery orders: In-Store Pick-up, Curbside Pickup and Delivery.
The approach was 2-pronged:
- Step 1: Ipsos conducted a 7-minute survey of 1,200 Americans to understand which elements of grocery pick-up and delivery are most important to consumers. The survey was conducted October 25, 2023. A Key Drivers Analysis was conducted to identify the top drivers of “Likelihood to Use Brand Again for grocery ecommerce” using Ipsos’ proprietary Ipsos Bayes Net (IBN) modelling technique.
- Step 2: Ipsos then deployed their panel of trained mystery shoppers to measure brand performance across a specific set of elements related to grocery pick-up and delivery. Roughly 33 mystery shops per method (In-store Pick-up, Curbside Pick-up, Home Delivery) were conducted for each qualifying retailer. Retailers were only shopped for methods they offered, so in some cases sample was redistributed appropriately across offered methods. Geographic representation was ensured across 4 regions (West, Midwest, Northeast, South). Mystery shops were fielded between October 23 – November 17, 2023. The relative importance of each service element ascertained from Step 1 was applied as a weighting factor to the Mystery Shopping results.
For a full copy of the results or to participate in Ipsos’ next ecommerce study (coming Fall 2024), contact Silvana Daehn at silvana.daehn@ipsos.com.
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At Ipsos Channel Performance, we partner with our clients to understand their shoppers and how they shop. We measure the execution of brand promises. We drive compliance and sales conversion. We improve performance across all sales and service channels – physical, contact center, and digital – and help deliver profitable growth. Learn more.
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Contact: Silvana Daehn
Email: silvana.daehn@ipsos.com.
