The US potential of online grocery delivery via pickup units
After becoming the preferred delivery option for French consumers that buy their groceries online, where more than 90% of online grocery orders are picked up via more than 4,000 “drive through” locations, a similar trend is emerging in the US online grocery market as well.
According to the US online grocery consumer survey published by Coresight Research, 51% of the respondents declared that they prefer to collect their online groceries from a pickup location, while only 45.3% prefer home delivery.This is not surprising given that population in both countries live mainly in suburban areas, where home delivery becomes more expensive. At the same time the majority of the US consumers, similar with French ones, use their cars to go to work, so it is easier for them to collect their online grocery as they drive back home than remain chained at home to receive them, not to mention the additional fees they have to pay for home delivery.
The number of US online grocery pickup locations are increasing exponentially as the market is growing. Spearheaded by Walmart and Kroger, that jointly have already more than 3,000 pickup locations in operation, it is expected that the sector is going to reach 20,000 pickup locations in the next 5 years.
It is interesting to note however that the totality of these pickup units, both in Europe and the US, are manually operated. This eventually results to increased operation costs, mainly labor costs. It also results to recruiting challenges, as finding the proper personnel becomes more and more difficult due to labor scarcity for such job description.
It remains difficult for the grocery retailers to turn online a profit, as the sector traditionally operates at razor thin margin (less than 1%- 1.5%) and online sales create additional costs for the retailers. They have to undertake the order fulfillment as opposed to the store shopping, where the customers pick the items from the shelves by themselves. And the customers generally refuse to pay higher prices for their online groceries than what they would pay if they were buying the same products in the store. Obviously the only way out for the industry is to use fully automated systems for grocery pickup to bring down the operational costs.
It could not be found a better time for Myrmex to launch its patented fully automated Click & Collect delivery system, which is propelled by mobile robotic units and arm manipulators.