Company: White Papers and Blog

 

Logistics Management Challenges for Online Grocery Stores

Date: Tue, Sep 23rd, 2014 12:00:00 am

Food distribution has long been a challenge from a logistics standpoint. Consumers are ordering more and more products online these days, and it's not hard to see why. The Internet offers convenience, a greater selection and lower prices. Most retailers have noticed this trend and are more than happy to accommodate online shoppers, but there is one segment of the business world that has been slower to adopt the online shopping model: grocery stores. Here are five reasons why, each relating to logistics management. 

Logistics Management Challenges for Online Grocery Stores

Logistics Management Challenge #1: The Expense

In order to cover the costs of the trucks, the labor and everything else companies would need to be able to ship groceries to individual customers' homes, grocers would have to charge for the service. Some customers may not pay the increased cost.

Logistics Management Challenge #2: The Hassle

Shipping groceries isn't as simple as pulling items off of a store shelf, loading them in a truck and driving them to a customer's home. Companies would need distribution centers, online ordering software and other logistical elements. These take a lot of time and hassle to set up.

Logistics Management Challenge #3: The Difficulty of Keeping Items Cold

Once grocers get the groceries to the customer's door, another potential problem arises. If the customer is not home, the grocer can't just let the groceries sit outside where they would spoil, be tampered with or be eaten by wild animals. 

Logistics Management Challenge #4: A Lack of Storage Room

One way some grocers are dealing with the challenge is by setting up an "order online, pick up in store" model. The problem with this model, however, is that not all stores have the space to keep items set aside until the customer is able to come pick them up. 

Logistics Management Challenge #5: Increased Stocking Difficulties

Lastly, adding an online ordering method would also decrease the difficulty of keeping items in stock. Grocers would have to make sure their online system was kept up-to-date, which can be difficult to do when customers are grabbing items off of the shelf.

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