Insight

Scaling Grocery e-Commerce to Meet COVID-19 Challenges

Grocers are experiencing an e-commerce wake-up call.

As COVID-19 continues to disrupt the world, shoppers are increasingly relying on online channels for groceries and essential supplies – challenging grocers to prepare their e-commerce capabilities to respond adequately.

For grocers, the online demand boom is staggering. According to a 2019 report from Gallup, online grocery was relatively rare in the United States prior to the coronavirus outbreak, with 81 percent of consumers citing they’ve never used online grocery services before. COVID-19 has changed that reality as online grocery and shopping habits faced an immediate paradigm shift.

Sudden influxes in e-commerce site traffic threatens risk of overwhelming backend processes, causing prolonged wait times for delivery slots or site/app crashes in times when customers need service most. With the goal to serve as many customers as they can without disruption, grocers worldwide are looking to innovative ways to solve these problems by optimizing their e-commerce processes and safeguarding against the unexpected, while also providing better products and services to their customers.

Given the risk resulting from surges in online site traffic, effectively scaling e-commerce capabilities will rely on a combination of non-invasive and disruptive tactics to mitigate short-term, medium-term and long-term impact. Though overall strategies will differ, the fundamental e-commerce questions grocers must answer are:

• Platform scalability: Will the existing e-commerce platform support increases in traffic as more customers shift to online ordering? When considering dark stores, which are not open to the public, what kind of scalability is achievable?
  
• Supply chain and operations viability: With so much unknown about the duration of the pandemic, will grocers be able to keep supply chain, DC and store operations moving un-interrupted.
  
• New/updated offerings: With clear possibility that customer load might increase beyond platform capabilities, how can grocers modify or introduce new offerings to maximize customer value, while keeping e-commerce systems running?

From an engineering and product perspective, cross-disciplinary squads must be created to identify and implement scalability levers, with appropriate representation from both product and engineering teams in order to identify opportunities and achieve these goals. Essentially, these initiatives should be divided into two categories, with respective teams assigned to each project:

Scaling downstream systems

Businesses scaling their e-commerce platform also need to scale order management systems, warehouse management systems and store operations.

Product-Led Initiatives

Given the unexpected traffic and load on e-commerce platforms, grocers are also preparing product/offering changes and optimizations to scale e-commerce initiatives in response to COVID-19. Product optimizations allow grocers to keep the customer experience in mind, creating more accessible services for shoppers, while also optimizing backend processes like inventory management and supply chain.

• Curation: Carrefour, for example, has built with a microsite for curated essential products containing weekly supplies for customers. Curated lists makes checkout faster, while also making easier for the customer to find what they need in quantities that do not risk putting pressure on inventory.
  
• Suspended Promotion: Some grocers have temporarily discontinued promotions, opting for markdowns instead. Others have limited real-time personalization and moved loyalty functions offline to reduce load on the customer-facing platform.
  
• Managing Wait Times: In order to mitigate lags and lapses in customer service, some companies have worked to throttle traffic, setting controlled wait times for shoppers. This way, customers have clear expectations on when they will be served with more transparency. CDNs like Akamai provide this feature with minimal configuration.

Scaling E-commerce

These are times of emergency, where providing essentials to consumers remains an upmost priority. But as grocers look ahead, the decisions made now could have long-lasting impacts when improving e-commerce processes as a whole. Understanding areas for optimization and creating a plan to scale capabilities for both short-term “quick-wins” and long-term transformation is the first step towards a more e-commerce enabled future.