Omnichain's Neil Soni explains how blockchain can enable grocers to deploy ecommerce, while meeting consumer demand for speed and freshness.
Have you ordered groceries online before? Grocery ecommerce presents consumers ease and convenience—a few taps or clicks and your groceries are well on the way to your front door. It’s great for people with busy schedules (or just don’t feel like putting on pants to drive to the store).
Studies by eMarketer show that U.S. grocery ecommerce sales will grow 18.2 percent up to $19.89 billion this year—making it the fastest-growing online product category.
With billions of dollars on the table, grocers across the country are all keen to capture this growing market segment. Amazon via Whole Foods, Walmart and Kroger have all been frontrunners, developing their own infrastructures to launch new online sales channels. Meanwhile, others seem to be lagging behind. Some have looked to third-party partners like Instacart, DoorDash or Shipt, but obstacles remain for widespread grocery ecommerce offerings.
What’s holding grocers back from going all in with ecommerce?
One big problem is just lack of knowledge or established processes to meet online demand, especially if a grocer has never had to incorporate ecommerce into their business, much less their supply chain. It can be completely uncharted territory.
Numerous questions start to pop up: who is going to fulfill a customer order? Will it be a distribution center or nearby grocery store? When data silos already commonly exist among physical stores, how do we account for online sales in our demand forecasts and replenishment planning?
Grocers eager to capitalize on ecommerce but left with continued uncertainties can consider distributed ledger technology, i.e. blockchain, as a great first step.
Fulfill customer orders—and do it fast!
If you’ve ever bought anything online, you know the feeling where you want your order—and you want it now. With grocery ecommerce, the need for speed is even greater given the perishable nature of food. After all, nobody wants spoiled groceries.
So, if a grocer is fulfilling orders directly from their stores, they need to know not only which stores have every item in a customer’s order, but also which one is the closest to their home.
Blockchain offers an innovative way to get this level of visibility. Blockchain provides a decentralized record of all inventory and transactions shared between parties—in this case, stores. When integrated with a company’s mobile app or online store, it is possible to then pinpoint the closest store with stock to fulfill a customer’s order. Customers enjoy faster, fresher groceries—and will continue to order more in the future.
Find the right balance between supply and demand
The food & beverage business is perhaps the most challenging to balance supply with demand given the time-sensitive nature of what you’re selling.
Most grocery retailers find themselves constantly in a reactive mode, which presents challenges in costs and waste. Namely, stores can’t sell items past their expiration date, so any excess product just becomes waste.
Conversely, if you under-project demand, then you have unhappy customers and lost sales. It is already challenging enough trying to forecast demand among stores—now you have to think about what people online want.
But with real-time data flow across the supply chain, you can have instant insight into what people are currently buying in store and online. It is then possible to proactively find an equilibrium between supply and demand across all sales channels, including ecommerce.
You can produce just the right amount to keep your shoppers happy and coming back for more. No more excess inventory and no more waste. Suddenly, you find your profits going up through a customer-centric, demand-driven supply chain.