Online Grocery Shopping

Disruption Report ONLINE GROCERY SHOPPING

by Table of content

Disruption Report - Online Grocery Shopping

About the report 2

Part 1: Online grocery market overview 4

Online sales: the main challenges 5

Conclusions on consumer attitudes from our survey 8

The impact of COVID-19 on grocery retail 9

Part 2: How to adapt to the changing reality 11

Industry predictions 11

Effects of the pandemic on the digital world 12

What’s missing from existing solutions 13

Part 3: Recommendations for frictionless online grocery shopping with 15

Click & Collect

Why Click & Collect? 15

Online shopping reinvented 18

Summary 24

About Netguru 25

Partners 27

Contributors 31

Online Grocery Shopping - Report 1 About the report We hope that this report will be a source of interesting insights for retailers and changemakers alike while inspiring them to reimagine online grocery shopping in a way that boosts their business While regulators around the globe are huddling to contain the spread of COVID-19, consumers are towards profitability and brings delightful experiences to end consumers. trying to adapt to the new normal: severe social distancing and self-isolating measures.

Retailers that want to accelerate out of the economic downturn need to be very Given the dawn of this new reality, many aspects of online shopping behavior will alter in the customer-centric in their decisions and investments. During discussions with retail leaders coming months. Preparing for these changes will become a basic necessity for the retail industry. from Delivery Hero, Zabka, and Ebay during our last Disruption Forum Retail, it became clear that customer-centricity is the way to win during the next normal. This ‘Disruption Report’ on online grocery shopping is aimed at Product Owners, Head of Moritz Spangenberg, Strategy & Transformation Leader, Netguru Innovations, and C-level executives from the retail industry who are working on the implementation of cohesive customer journeys. It will enable key decision-makers to have a bird’s eye view of the current market trends, prevailing challenges around sales and delivery, existing gaps within present solutions, and the aftereffects of COVID-19 on the online grocery market.

The report also touches upon our reimagined digital shopping solution, i.e. Click & Collect, which allows consumers to order online and pick their groceries up from a designated spot. It is also a way for retailers to tackle issues around last-mile delivery.

We built the report by doing thorough secondary research into existing data sources. We collated data from Statista, Forbes, Barclays, and Gordon Haskett, to name a few.

The desk research was followed up by performing qualitative competitor analysis of top solutions from the European and the US markets, in which we examined the top retail chains including Walmart, Amazon, Tesco, Instacart, Żabka, and Glovo to understand their best online practices and digital sales touchpoints.

To delve deeper into online shopping behaviors, we also conducted an exploratory survey with 75 respondents from Germany. The aim of this was to grasp and identify problems with existing online shopping solutions. We used the responses as a foundation for our reimagined Click & Collect solution that we discuss in detail later in the report.

Online Grocery Shopping - Report 2 We hope that this report will be a source of interesting insights for retailers and changemakers alike while inspiring them to reimagine online grocery shopping in a way that boosts their business While regulators around the globe are huddling to contain the spread of COVID-19, consumers are towards profitability and brings delightful experiences to end consumers. trying to adapt to the new normal: severe social distancing and self-isolating measures.

We built the report by doing thorough secondary research into existing data sources. We collated data from Statista, Forbes, Barclays, and Gordon Haskett, to name a few.

Online Grocery Shopping - Report 3 Part 1: Online grocery market overview

According to Statista, online grocery sales in the United States reached $29 billion in 2019. The prognosis for the following years, as stated by Forbes, is even more optimistic - $34.4 billion in 2020 and $41.3 billion in 2021. The numbers may seem even more impressive taking into consideration the fact that online sales’ share of the grocery market worldwide was 4.4% in 2016 and is forecasted to increase to 9% in 2025 (source: Statista).

It is worth noting that the share of the online channel in grocery shopping differs depending on the market. In South Korea it’s around 20%, which is the highest level worldwide. The US is at 4% and European markets range from 0.3% to 7%, with the UK in the leading position (source: CNBC).

There may be many reasons for such differences, but one of them is related to the specifics of each food retail market. For example, countries such as the UK or France have highly consolidated grocery markets, which means less price competition and fewer hard discount stores. This opens the door for “high value service” retail concepts, such as online grocery shopping.

Online Grocery Shopping - Report 4

Taking into consideration an increased need for social distancing, huge mobility & internet’s presence in people's lives, I expect a great increase in online sales in the grocery shopping market. Commercialization of 5G and IoT will boost it even further. More and more people, especially among 20-to-40-year-olds, are changing their shopping habits towards the online experience. This is because of time savings, convenience, simpler logistics, and automation. Additionally, I am observing a change in the way people do grocery shopping. They avoid malls and go shopping less frequently, but at the same time they buy more. Marcin Smelkowski, Presales Lead, Devoteam Cloud Services

The online grocery market will only rise since it's beneficial for both the businesses and customers. Customers will be able to manage their spending more carefully, while business es will be able to offer discounted products on online platforms thanks to the savings made on staff, rent, and shrinkage. I believe that businesses will use AI in the nearest future as well. This will allow them to build predictable revenue flows by diving deeper into customer behavior. Yevhen Vavrykiv, Engagement Manager, OGD Solutions

Consumers are discovering the convenience that online grocery stores provide. The notion that shopping online is more expensive due to additional service costs like delivery fees is being replaced by the notion that saving time is saving money. Younger generations are not interested in visiting large warehouse-like stores. What used to be entertaining for previous generations has turned into a chore. Atanas Sechkov, Founder, Ufleet According to Statista, online grocery sales reached $29 billion in 2019. The prognosis for the following years, as stated by Forbes, is even more optimistic - $34.4 billion in 2020 and $41.3 billion in 2021. The numbers may seem even more impressive taking into consideration the fact that online sales’ share of the grocery market worldwide was 4.4% in 2016 and is forecasted to increase to 9% in 2025 (source: Statista).

A few examples of how these costs can be incorporated into the pricing model include: In an increasingly disloyal world where there are more and more buying options, and Taking into consideration an increased need for social distancing, huge mobility & internet’s considering that retaining existing customers is easier and more profitable than acquiring presence in people's lives, I expect a great increase in online sales in the grocery shopping • The Click & Collect model, where the order is not delivered but collected by the customer, new ones, to build brand loyalty among those who have already purchased is one of the market. Commercialization of 5G and IoT will boost it even further. More and more people, which reduces logistical costs; most common challenges for retailers. The higher the variety of options, the more indecision especially among 20-to-40-year-olds, are changing their shopping habits towards the • Buying and delivering in partnership with delivery providers where logistics and while buying. Here is where personalization technology comes in to offer each customer what online experience. This is because of time savings, convenience, simpler logistics, and behind-the-scenes processes are handled by the partner company. This can be set up by they are looking for. automation. Additionally, I am observing a change in the way people do grocery shopping. introducing delivery conditions (e.g. a minimum cart amount for delivery); Truong Michael Ly, Enterprise Solution Consultant / Global Partner Manager, Retail Rocket They avoid malls and go shopping less frequently, but at the same time they buy more. • Introducing a subscription model for online ordering. International Marcin Smelkowski, Presales Lead, Devoteam Cloud Services Consumers demand the highest standards of last-mile delivery, meaning they expect fast and The growing trends of sustainable delivery and eco-friendly packaging should also be kept in mind The online grocery market will only rise since it's beneficial for both the businesses and efficient service. For retailers, challenges include storage & delivery infrastructure. To be able to as consumers are becoming increasingly conscious about their purchasing decisions. customers. Customers will be able to manage their spending more carefully, while deliver perishable goods fresh, stores should have access to specialized delivery vans or containers. business es will be able to offer discounted products on online platforms thanks to the The additional delivery infrastructure can put a dent on capital. However, systems costs can be Another significant challenge in grocery retail is the high level of competition. This is the case for savings made on staff, rent, and shrinkage. I believe that businesses will use AI in the nearest trimmed by integrating state-of-the-art inventory management. some countries, such as Germany, where the price race is an important force driving the market. future as well. This will allow them to build predictable revenue flows by diving deeper into The increased focus on strategies targeted at price competition pushes the deployment of customer behavior. The grocery players are experiencing major changes mostly on the consumer side, including high-level services into the background. Yevhen Vavrykiv, Engagement Manager, OGD Solutions a dramatic increase in consumers’ online activity that leads to longer delivery times and damaged deliveries due to heavy loads and insufficient capacity. This dramatic increase will Developing online solutions for grocery retail comes with a set of obstacles. Legacy systems that do Consumers are discovering the convenience that online grocery stores provide. The notion challenge retailers and force them to crack the last mile delivery/in store pick up problems in not integrate with new tech stand as a barrier for innovation. As more customers choose to shop for that shopping online is more expensive due to additional service costs like delivery fees is order to gain profitability and future growth. groceries online while still also shopping in a traditional way, retailers should seek a seamless being replaced by the notion that saving time is saving money. Younger generations are not Oren Paran, Managing Director, Retail Innovation Club cross-channel experience between offline and online. interested in visiting large warehouse-like stores. What used to be entertaining for previous generations has turned into a chore. Over the last few years, retailers were good indicators of shifts happening among their Offline retailers ignored online sales at first and then they realized that the segment is Atanas Sechkov, Founder, Ufleet consumers, such as increased share of online purchases or the growing importance of stores growing fast. So they approached online sales as a virtual store. Based on this approach they proximity. However, there are still many challenges faced by retailers nowadays. Being tried to manage online sales with an offline mind-set - this mind-set is the most common user-centric and driving shoppers’ loyalty is one such challenge. This usually means that and biggest challenge in front of all offline retailers. Online sales: the main challenges retailers need to regularly adjust their assortment and pricing to fit customer needs. Today we are pretty sure that the winning scenario is seamless omnichannel, which means Although the online grocery market is a lucrative one, it does not come without challenges. There Another huge challenge for omnichannel players is making sure that the user experience designing the entire customer journey with an end-to-end approach starting from the are numerous issues that retailers face when it comes to e-commerce. One of them is lower profit matches expectations in both online and offline. Solutions such as Click & Collect are being customer. margins coupled with last-mile delivery problems. Retailers incur an additional cost burden by offered by some players, with the aim of making the user journey as seamless and pleasant S. Gurhan Saatcioglu, Supply Chain Director, Metro Cash & Carry Turkey delivering to the customer or include the cost in their pricing models. However, it seems that there is as possible. no predominant business model yet. Anastasiia Moldavska, Digital Transformation Manager, Żabka Polska

Online Grocery Shopping - Report 5 A few examples of how these costs can be incorporated into the pricing model include: In an increasingly disloyal world where there are more and more buying options, and considering that retaining existing customers is easier and more profitable than acquiring • The Click & Collect model, where the order is not delivered but collected by the customer, new ones, to build brand loyalty among those who have already purchased is one of the which reduces logistical costs; most common challenges for retailers. The higher the variety of options, the more indecision • Buying and delivering in partnership with delivery providers where logistics and while buying. Here is where personalization technology comes in to offer each customer what behind-the-scenes processes are handled by the partner company. This can be set up by they are looking for. introducing delivery conditions (e.g. a minimum cart amount for delivery); Truong Michael Ly, Enterprise Solution Consultant / Global Partner Manager, Retail Rocket • Introducing a subscription model for online ordering. International

Consumers demand the highest standards of last-mile delivery, meaning they expect fast and The growing trends of sustainable delivery and eco-friendly packaging should also be kept in mind efficient service. For retailers, challenges include storage & delivery infrastructure. To be able to as consumers are becoming increasingly conscious about their purchasing decisions. deliver perishable goods fresh, stores should have access to specialized delivery vans or containers. The additional delivery infrastructure can put a dent on capital. However, systems costs can be Another significant challenge in grocery retail is the high level of competition. This is the case for trimmed by integrating state-of-the-art inventory management. some countries, such as Germany, where the price race is an important force driving the market. The increased focus on strategies targeted at price competition pushes the deployment of The grocery players are experiencing major changes mostly on the consumer side, including high-level services into the background. a dramatic increase in consumers’ online activity that leads to longer delivery times and damaged deliveries due to heavy loads and insufficient capacity. This dramatic increase will Developing online solutions for grocery retail comes with a set of obstacles. Legacy systems that do challenge retailers and force them to crack the last mile delivery/in store pick up problems in not integrate with new tech stand as a barrier for innovation. As more customers choose to shop for order to gain profitability and future growth. groceries online while still also shopping in a traditional way, retailers should seek a seamless Oren Paran, Managing Director, Retail Innovation Club cross-channel experience between offline and online.

Over the last few years, retailers were good indicators of shifts happening among their Offline retailers ignored online sales at first and then they realized that the segment is consumers, such as increased share of online purchases or the growing importance of stores growing fast. So they approached online sales as a virtual store. Based on this approach they proximity. However, there are still many challenges faced by retailers nowadays. Being tried to manage online sales with an offline mind-set - this mind-set is the most common user-centric and driving shoppers’ loyalty is one such challenge. This usually means that and biggest challenge in front of all offline retailers. retailers need to regularly adjust their assortment and pricing to fit customer needs. Today we are pretty sure that the winning scenario is seamless omnichannel, which means Although the online grocery market is a lucrative one, it does not come without challenges. There Another huge challenge for omnichannel players is making sure that the user experience designing the entire customer journey with an end-to-end approach starting from the are numerous issues that retailers face when it comes to e-commerce. One of them is lower profit matches expectations in both online and offline. Solutions such as Click & Collect are being customer. margins coupled with last-mile delivery problems. Retailers incur an additional cost burden by offered by some players, with the aim of making the user journey as seamless and pleasant S. Gurhan Saatcioglu, Supply Chain Director, Metro Cash & Carry Turkey delivering to the customer or include the cost in their pricing models. However, it seems that there is as possible. no predominant business model yet. Anastasiia Moldavska, Digital Transformation Manager, Żabka Polska

Online Grocery Shopping - Report 6 A few examples of how these costs can be incorporated into the pricing model include: In an increasingly disloyal world where there are more and more buying options, and considering that retaining existing customers is easier and more profitable than acquiring • The Click & Collect model, where the order is not delivered but collected by the customer, new ones, to build brand loyalty among those who have already purchased is one of the which reduces logistical costs; most common challenges for retailers. The higher the variety of options, the more indecision • Buying and delivering in partnership with delivery providers where logistics and while buying. Here is where personalization technology comes in to offer each customer what behind-the-scenes processes are handled by the partner company. This can be set up by they are looking for. introducing delivery conditions (e.g. a minimum cart amount for delivery); Truong Michael Ly, Enterprise Solution Consultant / Global Partner Manager, Retail Rocket • Introducing a subscription model for online ordering. International

Online Grocery Shopping - Report 7 Conclusions on consumer attitudes from our survey

The exploratory survey that we undertook amongst 75 respondents in Germany gave us a glimpse of existing online grocery sales solutions and the corresponding pain points. While there are features within the online shops of Amazon, Rewe, dm, Lidl other chains that consumers find useful, the overall experience is far from ideal. Below we list the responses from our survey.

At the outset, the most popular advantages that customers see while shopping online are:

• Convenience - ease of the shopping process, ability to shop from home and save time; • The option of home delivery - the fact that it is fast and eliminates lifting heavy shopping bags; • Lowering the risk of COVID-19 infection by reducing social interactions; • App-related advantages, such as ease of placing an order, efficient search functionality, and fast checkout; • Wide selection of available products; • Price-related benefits, e.g. good deals.

Respondents who consistently shop groceries online from stores such as Amazon, Rewe, dm, and Lidl found the following application features useful:

• Search functionality (especially intelligent/autosuggest search); • Overall clarity and usability of the application or website; • Good categorization of products so that items can be easily found; • Payment with PayPal, express checkout, saving address and payment.

The issues that the survey respondents struggled with are:

• Items out of stock sometimes shown as available; • Lengthy or canceled delivery, damaged products; • Limited choice of products, difficulty finding particular products; • COVID-19 related - canceled deliveries, collection instead of delivery, limitations on the number of items that can be ordered.

Online Grocery Shopping - Report 8 The impact of COVID-19 on grocery retail Additionally, numerous social complications emerged, such as the ethical issues around having couriers deliver orders when the nature of the task is strongly connected with frequent social contact, or questionable customer behavior such as withdrawing tips for couriers and drivers. The new reality The list does not end here and will continue to grow as the situation changes and new implications emerge. The COVID-19 pandemic has had an unprecedented impact on our reality. It has complicated our lives and brought about the new normal. Grocery retail has gone through a number of changes that A blessing in disguise were difficult to predict and were driven by the initial panic, which resulted in increased demand for certain products. Putting these issues aside, the increased interest in online grocery shopping has opened new customer opportunities. Many shops went online for the first time and learnt new digital skills as a Retailers had to implement social distancing, which entailed changing their operational result of the current situation. infrastructure and training staff. Moreover, the initial trend of shoppers panic-buying pantry goods and disinfectants introduced a series of complications within supply chain management. If retail leaders have the financial opportunity to make drastic changes to their operating models now to infuse more technology into it, this is the perfect moment to accelerate The combination of several factors has motivated the sales growth in the grocery market: on projects that may have been less prioritized pre-pandemic. Data analysis shows that even one side, consumers' interest in avoiding public places and long queues; and on the other before the pandemic hit, 92 percent of companies thought their business models would need side, the social behavior of compulsively collecting essential goods during the lockdown. to change. Moritz Spangenberg, Strategy & Transformation Leader, Netguru. In the current situation, new patterns of behavior have emerged that have accelerated online traffic to the point that there are supermarkets, for example, that have seen their growth Other sources (see this Gordon Haskett research) mention a rise of food purchases online by one truncated by not being able to meet that demand due to logistical capacity issues. third, with a significant share (41%) of first-timers doing online grocery shopping in the US.

With the return to normality, we will see how the market evolves and how many consumers Furthermore, sales shifts related to the coronavirus are now forecasted to grow not only short-term, who made their debut in buying online will continue doing it. but long-term as well. According to Barclay’s research into the US market, food sales will shift from Truong Michael Ly, Enterprise Solution Consultant / Global Partner Manager, Retail Rocket away-from-home (restaurants) to at-home (food stores) and are predicted to increase from 32 to International 62% in the second quarter, resulting in an overall 8-15% lift for the fiscal year.

Consumers have started changing their shopping behaviors due to formal guidelines and personal Changes as more people are willing to shop online to avoid crowded places, we will witness struc- concerns and are now looking for alternative methods to obtain their necessities. In the UK, 30% of tural changes within the industry and expect a continuous shift in consumer behavior. shoppers purchase their food and drinks online because of the coronavirus pandemic (source: Statista). A data analysis from McKinsey & Company shows that the number of consumers using online channels, across segments, has increased by 25% overall in the United States.

Online shopping with home delivery seemed a natural alternative to traditional shopping. However, there was the problem of last-mile delivery: waiting periods increased by days and placing orders wasn’t feasible.

Online Grocery Shopping - Report 9 Additionally, numerous social complications emerged, such as the ethical issues around having couriers deliver orders when the nature of the task is strongly connected with frequent social contact, or questionable customer behavior such as withdrawing tips for couriers and drivers. The new reality The list does not end here and will continue to grow as the situation changes and new implications emerge. The COVID-19 pandemic has had an unprecedented impact on our reality. It has complicated our lives and brought about the new normal. Grocery retail has gone through a number of changes that A blessing in disguise were difficult to predict and were driven by the initial panic, which resulted in increased demand for certain products. Putting these issues aside, the increased interest in online grocery shopping has opened new customer opportunities. Many shops went online for the first time and learnt new digital skills as a Retailers had to implement social distancing, which entailed changing their operational result of the current situation. infrastructure and training staff. Moreover, the initial trend of shoppers panic-buying pantry goods and disinfectants introduced a series of complications within supply chain management. If retail leaders have the financial opportunity to make drastic changes to their operating models now to infuse more technology into it, this is the perfect moment to accelerate The combination of several factors has motivated the sales growth in the grocery market: on projects that may have been less prioritized pre-pandemic. Data analysis shows that even one side, consumers' interest in avoiding public places and long queues; and on the other before the pandemic hit, 92 percent of companies thought their business models would need side, the social behavior of compulsively collecting essential goods during the lockdown. to change. Moritz Spangenberg, Strategy & Transformation Leader, Netguru. In the current situation, new patterns of behavior have emerged that have accelerated online traffic to the point that there are supermarkets, for example, that have seen their growth Other sources (see this Gordon Haskett research) mention a rise of food purchases online by one truncated by not being able to meet that demand due to logistical capacity issues. third, with a significant share (41%) of first-timers doing online grocery shopping in the US.

Online Grocery Shopping - Report 10 Part 2: How to adapt to the changing reality Other mechanisms to deal with last-mile delivery will involve developing cutting-edge digital alternatives. Technology offers numerous new frontiers for digital transformation within the online Industry predictions grocery shopping industry, such as:

Keeping in mind the current state of the grocery market, general consumer attitudes, and the • Using Internet of Things (IoT) to streamline retail processes and enhance the customer extraordinary moment in history related to the pandemic, we want to present our predictions of experience; what will happen in the industry in the coming years. • Using Artificial intelligence (AI) and Machine Learning (ML) for consumer data analysis and better stock predictions; The value proposition of physical stores will evolve from being a distribution channel to that of a • Using Augmented Reality (AR) and Virtual Reality (VR) to enable virtual store tours and platform for discovery, engagement, experience, and interactions. A solid omni-channel strategy will enhance the in-store experience; be a must. The internet, apart from being an additional sales channel, will play a critical role within • Deploying Automated Guided Vehicles (AGV) and drones for better order delivery. all customer touchpoints. A key phenomenon is showrooming: many consumers still prefer to see and touch the goods before finalizing an online purchase. Other technological possibilities include the use of robotics, 3D printing, digital traceability, and blockchain, but this list is obviously not exhaustive. Shoppers will also have access to a wide range of products, price transparency, bespoke experiences, and convenient order completion options. Shopping in-store will no longer be a chore or merely about a product purchase, but a rich, engaging, and specialized experience driven by innovative business models.

Every online purchase starts with trust. Trust means that you feel that it’s safe to order, return, or refund anytime and anywhere. On top of that, online shopping becomes more social and community-oriented when purchase decisions are created and supported by the crowd and led by community leaders or influencers. Oren Paran, Managing Director, Retail Innovation Club

Grocery retailers are going to continue to build more “dark stores”. They look like real stores and have all the regular supermarket products, but are not open to consumers. Dark stores are meant exclusively for online orders. When an order comes in, the staff fulfill the order and prepare for delivery or Click & Collect service. The thought behind these stores is to locate them in populated areas to reduce delivery times and facilitate a convenient shopping experience.

Last-mile delivery challenges can be addressed thanks to innovation. One of the solutions is to format e-commerce co-operation between retailers and delivery companies in order to become cost-effective, eco-friendly, and consumer-responsive. This will likely happen through establishing macro-aggregators, investing in containerization, and rethinking how costs are split between retailers and consumers.

Online Grocery Shopping - Report 11 Other mechanisms to deal with last-mile delivery will involve developing cutting-edge digital In markets where the traditional model of onsite grocery shopping is still predominant, e.g. in

alternatives. Technology offers numerous new frontiers for digital transformation within the online Poland, many retailers developed simple solutions enabling customers (in selected locations) to shop grocery shopping industry, such as: online by selecting their order from a limited range of products. Other brands, e.g. Carrefour or Jeronimo Martins, partnered up with delivery companies whose drivers complete a customer’s order Keeping in mind the current state of the grocery market, general consumer attitudes, and the • Using Internet of Things (IoT) to streamline retail processes and enhance the customer and deliver it to their doorstep. extraordinary moment in history related to the pandemic, we want to present our predictions of experience; what will happen in the industry in the coming years. • Using Artificial intelligence (AI) and Machine Learning (ML) for consumer data analysis and better stock predictions; The value proposition of physical stores will evolve from being a distribution channel to that of a • Using Augmented Reality (AR) and Virtual Reality (VR) to enable virtual store tours and platform for discovery, engagement, experience, and interactions. A solid omni-channel strategy will enhance the in-store experience; be a must. The internet, apart from being an additional sales channel, will play a critical role within • Deploying Automated Guided Vehicles (AGV) and drones for better order delivery. all customer touchpoints. A key phenomenon is showrooming: many consumers still prefer to see and touch the goods before finalizing an online purchase. Other technological possibilities include the use of robotics, 3D printing, digital traceability, and blockchain, but this list is obviously not exhaustive. Shoppers will also have access to a wide range of products, price transparency, bespoke experiences, and convenient order completion options. Shopping in-store will no longer be a chore Effects of the pandemic on the digital world or merely about a product purchase, but a rich, engaging, and specialized experience driven by innovative business models. Leading retailers have already been putting innovations in motion when it comes to digital solutions. Amazon, Walmart, and Sainsbury’s are examples of brands that offer fully fledged online grocery Every online purchase starts with trust. Trust means that you feel that it’s safe to order, return, shopping experiences with a multitude of enhancements that deliver customer convenience. There or refund anytime and anywhere. On top of that, online shopping becomes more social and are also digital marketplaces, such as Instacart or Shipt, that have amassed popularity with community-oriented when purchase decisions are created and supported by the crowd and shoppers. led by community leaders or influencers. Oren Paran, Managing Director, Retail Innovation Club In the era of the COVID-19 pandemic, these brands have introduced changes around both traditional and online shopping. Grocery retailers are going to continue to build more “dark stores”. They look like real stores and have all the regular supermarket products, but are not open to consumers. Dark stores are meant For instance, in reaction to the drastically increased waiting time for order deliveries, Amazon exclusively for online orders. When an order comes in, the staff fulfill the order and prepare for deployed a feature which would enable Amazon Fresh users to get a ‘virtual place in line’ delivery or Click & Collect service. The thought behind these stores is to locate them in populated (source: The Verge). Instacart, on the other hand, came up with the ‘Fast & flexible’ and ‘Order areas to reduce delivery times and facilitate a convenient shopping experience. ahead’ features to increase the number of delivery windows (source: The Verge).

Last-mile delivery challenges can be addressed thanks to innovation. One of the solutions is to Many stores, including Walmart, have put focus on contactless deliveries in the form of curbside format e-commerce co-operation between retailers and delivery companies in order to become pickup, where store staff place the shopping bags with an online order directly in the customer’s car. cost-effective, eco-friendly, and consumer-responsive. This will likely happen through establishing macro-aggregators, investing in containerization, and rethinking how costs are split between retailers and consumers.

Online Grocery Shopping - Report 12 In markets where the traditional model of onsite grocery shopping is still predominant, e.g. in Poland, many retailers developed simple solutions enabling customers (in selected locations) to shop online by selecting their order from a limited range of products. Other brands, e.g. Carrefour or Jeronimo Martins, partnered up with delivery companies whose drivers complete a customer’s order and deliver it to their doorstep.

What’s missing from existing solutions

The websites and applications that we examined, namely Amazon, Rewe, dm, and Lidl, comprehen- sively capture the customer journey. Thanks to a number of available features, customers save time and shop without friction.

These features include intuitive search and category browsing, predefined or saved shopping lists for easier ordering, and personalized item suggestions. Also available are quick and easy payment mechanisms as well as delivery options. Some of them, e.g. Walmart Grocery, offer various conveniences, such as tracking the delivery driver or checking in with a mobile application at a pickup tower if you happen to choose the pickup option for your order.

Leading retailers have already been putting innovations in motion when it comes to digital solutions. However, there is still room for improvement. In our survey, we asked respondents about features Amazon, Walmart, and Sainsbury’s are examples of brands that offer fully fledged online grocery they missed and options they would add. They indicated several interesting points, a few of which shopping experiences with a multitude of enhancements that deliver customer convenience. There were: are also digital marketplaces, such as Instacart or Shipt, that have amassed popularity with • A wider variety of payment options (e.g. PayPal, paying with cryptocurrency, paying cash shoppers. on delivery); • Better product descriptions (e.g. country of origin, ingredients, special nutritional values, In the era of the COVID-19 pandemic, these brands have introduced changes around both ways to use the product); traditional and online shopping. • Free delivery.

For instance, in reaction to the drastically increased waiting time for order deliveries, Amazon deployed a feature which would enable Amazon Fresh users to get a ‘virtual place in line’ (source: The Verge). Instacart, on the other hand, came up with the ‘Fast & flexible’ and ‘Order ahead’ features to increase the number of delivery windows (source: The Verge).

Many stores, including Walmart, have put focus on contactless deliveries in the form of curbside pickup, where store staff place the shopping bags with an online order directly in the customer’s car.

Online Grocery Shopping - Report 13 When it comes to application-specific issues, we identified 4 groups of potential frustrations.

1. Problems with the pickup location, such as not being able to collect the order or trouble finding the place where the order can be collected.

“What went really wrong was that they used misleading names for the stores.” (respondent quote, Netguru survey)

2. Items missing from the order and receiving mismatched replacements for out-of-stock items.

“Products offered as compensation were often very different (e.g. a cleaning product for wooden floors instead of toilet cleaner).” (respondent quote, Netguru survey)

3. Lack of timely information about the overall process and specific steps, which confused customers, especially after placing an order.

“I didn't get any message that [the order] was confirmed and I can pick it up. [...] I had to call customer service to get the info that I can go now as my groceries are now being packed.” (respondent quote, Netguru survey)

4. Some of the respondents did not feel entirely comfortable with how order collection was handled by the retailers in light of social distancing practices.

“I was a bit disappointed I still had to interact with someone - of course no hard feelings since there were so many orders, but I wish I had been informed sooner.” (respondent quote, Netguru survey)

Although the online grocery shopping solutions offered by the top players, such as Amazon, Rewe, dm, and Lidl, seem to be working well, enabling users to make and receive purchases without much hassle, a number of improvements can still be made to the experience.

Online Grocery Shopping - Report 14 Part 3: Recommendations for frictionless online Click & Collect is the easiest entry point into online grocery shopping. It doesn't require the heavy investment and know-how of home delivery yet allows retailers to experiment, grocery shopping with Click & Collect validate concepts, and work on their offering. Atanas Sechkov, Founder, Ufleet Why Click & Collect?

According to a Barclaycard Study (UK), 85% of customers claim that they would buy additional products when using a Click & Collect service. On the other hand, over ¾ of retailers (77%) observe a reduced returns level, which leads to lower costs of processing refunds and restocking goods. In many countries, Click & Collect is a must-have option rather than a nice-to-have feature. For instance, 43% of retailers in Germany and Austria offered Click & Collect in 2018 (source: Statista).

I think that Click & Collect addresses many of the challenges faced by the grocery sales market. It gives users convenience and freedom and at the same time solves retailers’ problems in last-mile logistics. The full ecosystem has a chance to be a gamechanger in the world of online grocery shopping. Marcin Smelkowski, Presales Lead, Devoteam Cloud Services

Click & Collect allows suppliers to take into account the individual lifestyle and personal circumstances. This in contrast to traditional courier delivery, which involves a long wait for the goods and does not meet the needs of busy people.

Click & Collect is an opportunity for buyers to order the product of interest in the online store chains and pick it up at a geographically convenient offline point of sale. This technology makes shopping easier and cheaper and is equally in demand among teenagers, veterans of online shopping, and traditionalists who resist the digitalization of life. Yevhen Vavrykiv, Engagement Manager, OGD Solutions

Online Grocery Shopping - Report 15 Click & Collect is the easiest entry point into online grocery shopping. It doesn't require Although the weight of these arguments might have shifted since the pandemic, patterns can be the heavy investment and know-how of home delivery yet allows retailers to experiment, spotted when looking at data from before the coronavirus appeared: validate concepts, and work on their offering. Atanas Sechkov, Founder, Ufleet

Benefits for retailers

Click & Collect is a hybrid solution where customers purchase products online but collect their order at a predefined location rather than have it delivered. It is worth paying attention to due to One major benefit of Click & Collect for retailers is a drastic fall in costs related to logistics and the number of benefits it presents for both retailers and customers. delivery. Customers choose a time and pickup location according to their convenience, so issues related around last-mile delivery are taken care of.

According to a Barclaycard Study (UK), 85% of customers claim that they would buy additional products when using a Click & Collect service. On the other hand, over ¾ of retailers (77%) Click & Collect also gives retailers an understanding of order trends and the ability to manage their observe a reduced returns level, which leads to lower costs of processing refunds and restocking supply chains better. Data collection makes it possible to better predict demand patterns. goods. In many countries, Click & Collect is a must-have option rather than a nice-to-have feature. For instance, 43% of retailers in Germany and Austria offered Click & Collect in 2018 With home delivery, the factor to be taken into account is whether the store is able to meet (source: Statista). the demand. Click & Collect, which benefits both retailers and customers, is a real challenge for the supply chain. To collaborate in the process and benefit from it, it must have sufficient

I think that Click & Collect addresses many of the challenges faced by the grocery sales stock control and an effective system for supplying the physical stores. Therefore, logistics market. It gives users convenience and freedom and at the same time solves retailers’ must develop so that the services offered are always equally effective and agile. problems in last-mile logistics. The full ecosystem has a chance to be a gamechanger in Truong Michael Ly, Enterprise Solution Consultant / Global Partner Manager, Retail Rocket the world of online grocery shopping. International Marcin Smelkowski, Presales Lead, Devoteam Cloud Services Given that 35% of users abandon their orders when they see shipping costs and another 20% exit

Click & Collect allows suppliers to take into account the individual lifestyle and personal when they must enter a shipping address (source: Business Insider), Click & Collect may emerge as circumstances. This in contrast to traditional courier delivery, which involves a long wait a beneficial solution for retailers who wish to exclude that step and influence cart abandonment. for the goods and does not meet the needs of busy people. Benefits for retailers

Click & Collect is an opportunity for buyers to order the product of interest in the online store chains and pick it up at a geographically convenient offline point of sale. This When asked why they use Click & Collect, customers from Germany mentioned convenience, more technology makes shopping easier and cheaper and is equally in demand among trust in getting the ordered items, and avoiding additional charges (source: Statista). teenagers, veterans of online shopping, and traditionalists who resist the digitalization of The other benefits for shoppers are: life. Yevhen Vavrykiv, Engagement Manager, OGD Solutions • Time saved on grocery shopping and standing in lines; • Flexibility of choosing their own preferred time for order collection; • Avoiding crowded areas to practice social distancing.

Online Grocery Shopping - Report 16 Although the weight of these arguments might have shifted since the pandemic, patterns can be spotted when looking at data from before the coronavirus appeared:

Why Do Internet Users Worldwide Use Click-and-Collect Services % of respondents, Jan 2019

Benefits for retailers Avoid shipping changes 47.4% One major benefit of Click & Collect for retailers is a drastic fall in costs related to logistics and delivery. Customers choose a time and pickup location according to their convenience, so issues Save time by not having to shop in-sore related around last-mile delivery are taken care of. 44.4%

Click & Collect also gives retailers an understanding of order trends and the ability to manage their Pick up my porchase on the same day supply chains better. Data collection makes it possible to better predict demand patterns. 38.9%

With home delivery, the factor to be taken into account is whether the store is able to meet Guarantee an item is in stock before I go to the store the demand. Click & Collect, which benefits both retailers and customers, is a real challenge 38.6% for the supply chain. To collaborate in the process and benefit from it, it must have sufficient

stock control and an effective system for supplying the physical stores. Therefore, logistics Can take my time when deciding what to purchase must develop so that the services offered are always equally effective and agile. 38.1% Truong Michael Ly, Enterprise Solution Consultant / Global Partner Manager, Retail Rocket

International Can return items more easily 21.7% Given that 35% of users abandon their orders when they see shipping costs and another 20% exit when they must enter a shipping address (source: Business Insider), Click & Collect may emerge as a Do not buy online, pick up in-store/click and collect beneficial solution for retailers who wish to exclude that step and influence cart abandonment. 16.3%

Benefits for retailers Note: ages 18+ Source: iVend Retail, “Global Shopper Trends Report” in partnership with AYTM, Feb 19, 2019 When asked why they use Click & Collect, customers from Germany mentioned convenience, more trust in getting the ordered items, and avoiding additional charges (source: Statista). The Global Shopper Trends Report by iVend Retail shows numerous factors as to why consumers The other benefits for shoppers are: globally use Click & Collect. The main factors were avoiding shipping charges, saving time by not having to shop in-store, and picking up orders on the same day. The survey conducted in February • Time saved on grocery shopping and standing in lines; 2019, well before the pandemic, clearly demonstrates consumer shifts within online shopping. • Flexibility of choosing their own preferred time for order collection; • Avoiding crowded areas to practice social distancing.

Online Grocery Shopping - Report 17 Online shopping reinvented Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

• Problems with the pickup location; The shoppers pick up their orders from dedicated lockers that are aided by in-app check-out. • Problems with missing items and substitutions; A contactless solution in line with all social distancing measures. • Lack of information about the overall process and specific steps; Advanced filtering options Better guidance throughout the process • Practicing social distancing. A step into the future Advanced browsing and filtering options (allergens, vegan, gluten-free, organic) give users a better Better cart management An informative order tracking process with options to adjust pickup time and location, redirect the Automated Guided Vehicles (AGVs) are four-wheeled mobile lockers that can deliver orders straight overview of products and allows them to make more informed shopping choices. Shoppers can add products based on their previous orders or favorite products. They won’t forget order to a different pickup spot, or change the time slot for pickup thanks to timely We are aware that handling the issues around the collection part of the whole user journey is not to the shoppers’ hands. This can be a viable alternative to parcel lockers or collecting groceries in about any item they might need and placing an order will be a lot faster. behind-the-scenes notifications. sufficient. This is why we evaluated the whole experience, starting with discovering products and person. adding them to the cart, through checkout and payment, ending with successful order pickup.

To be successful, Click & Collect must be fully integrated with the ERP infrastructure of stores and logistics centers. That might be the biggest challenge for big enterprises. All data needs to be up to date and the process of packaging customer orders as automated as possible. Intelligent and robotised warehouses might be a solution. Marcin Smelkowski, Presales Lead, Devoteam Cloud Services

One of the core issues with Click & Collect is product availability data. Offline and online products have bad synchronization. Sometimes offline customers buy the stock while online customers order non-available products. I would recommend avoiding that by using stock management software and integrating it with cashier software. Yevhen Vavrykiv, Engagement Manager, OGD Solutions

Multi-level product categorization Browsing through multi-level product categories organized like aisles in a real store makes finding Personalized mobile notifications Easily find the right spot the right items easy. Smart recommendations powered by Machine Learning showcase products Adding products from recipes Using the recurring order option and ML analysis of shopping habits, consumers get timely notifica- With the Click & Collect option, driving directions are one tap away. For precise navigation to the that fit the shopper’s taste. Preparing a favorite recipe or learning a new one will now be easier, as shoppers can add all the tions suggesting their next shopping to prevent running out of groceries. collection point, AR will come in handy. necessary ingredients to their cart with just one click.

Online Grocery Shopping - Report 18 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 19 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 20 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 21 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 22 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 23 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Summary

Online grocery shopping has witnessed tremendous opportunities in the face of COVID-19. Trends have been reinvigorated with the pandemic forcing consumers to look for experiences that minimize face to face contact. With 41% of users doing their first online shopping in March 2020 (source: Gordon Haskett Research), the time has never been more ripe for disrupting the industry with digital transformations that will continue well beyond the existing social-distancing measures. The rapid growth in demand has forced retail chains to seek out alternate options to automate and find solutions for fulfillment quickly.

Consumers who have experienced delivery, curbside pickup, or e-commerce during the pandemic will likely incorporate these habits into their everyday lives even after the current situation subsides. In the face of uncertainty, many stores may continue to restrict the number of shoppers inside at a time or deploy measures to limit human interaction.

There is no doubt that existing delivery solutions are far from ideal. The inconsistent experience between online and offline while shopping for necessities is becoming a strong factor for user satisfaction. Keeping in mind the analysis, trends, and data, it is worthwhile to note the growing adoption of the Click & Collect model. It takes online shopping and ties it to the advantages of physical stores - the ability to pick up orders quickly and to see and touch your items. The Click & Collect solution offers a workaround for retailers struggling with lower profit margins and last-mile delivery.

The global pandemic has turned the retail world on its head. We are now entering the realm of the unknown. Retailers can tackle the challenges by rolling out solutions such as Click & Collect. By continuously adapting their broader shopping repertoire, retailers pave their way into the future of online retail.

Online Grocery Shopping - Report 24 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

About Netguru

Netguru builds software for world changers. Developing and shipping products that make the world a better place for everyone is at the core of everything that Netguru does. Since the founding of the company in 2008, Netguru has delivered more than 600 projects across various industries including automotive, retail, education, finance, and entertainment.

With over 650+ employees on board, Netguru is one of the fastest-growing companies in the EU, recognized by the Financial Times, Deloitte, and Forbes. Netguru provides consultancy, product development, and software development using cutting-edge technologies to create world-class experiences for companies and their clients of all shapes and sizes.

Netguru is a one-stop-shop for crafting impactful innovation, working together with retailers to bring digital transformation to life. Our list of clients features some of the largest companies from the UK, Germany, Switzerland, and the USA, including brands like Volkswagen, Ikea, Keller Williams, solarisBank, Babbel, and Temi.

Online Grocery Shopping - Report 25 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Partners

Devoteam has been guiding companies to transform their business with innovative cloud solutions 110,000 employees from 150 nations, METRO Cash & Carry is one of the most internationalized OGD Solutions works with small and medium-sized businesses and technology challengers to since 2008. Operating in Europe and Asia, Devoteam is a full service cloud solutions partner for wholesalers in the world. Founded in 1964, METRO Cash & Carry operates membership-only evaluate their values by providing custom software development, product design, QA, and corporations, startups, and the public sector to deliver outstanding digital workplace products and warehouse clubs across Europe, India, China, Japan, and Pakistan. The concept of cash and carry is consultancy services. Founded in 2016, OGD Solutions is an Estonian company with development services. They partner with leading solutions like Google Cloud, Salesforce, and Okta to create a around self-service and bulk buying. Business owners, hotels, restaurants, caterers, and traders form offices in Ukraine and more than 50 employees on its roster. They provide a full development cycle comprehensive portfolio of cloud solutions. Devoteam’s expertise includes SaaS, PaaS, IaaS, and the core customer group. METRO Cash & Carry opened its first store in Turkey in 1990 and now has that includes Business Analysts, Project Managers, Design, and CTO-as-a-service. Rated as the Top hardware. Their mission is to add value by delivering a digital workplace based on sustainable more than 37 stores across 21 cities. Software, Web, and Mobile Developers by Clutch in 2019, OGD’s engineers are innovative, critical solutions from top innovative partners. Devoteam achieves this with a combination of their thinkers, problem solvers, and reliable digital partners for businesses. busness-oriented personnel and strong company culture.

Retail Rocket has been helping e-commerce websites implement big data personalization Ufleet is a SaaS platform for last mile delivery. Since launching in 2016, Ufleet has helped retailers technologies and take their marketing to the next level with real-time adjustment of product offers provide a superior delivery experience that increases customer retention, advocacy, and loyalty. It based on their behavior. Founded in 2012, Retail Rocket are No Cure No Pay hyper-personalization takes care of the cost side by using algorithms to optimize operations. For end customers, Ufleet experts with clients like Inditex, Decathlon, Auchan, Makro, and many more. With more than 1000 creates an interactive user journey with Uber-like real-time tracking ETAs. By providing the right e-commerce stores using Retail Rocket’s Multi-Channel Marketing Automation, they’re on the tools and processes, Ufleet assists retailers in increasing customer satisfaction by turning the last forefront of improving the customer journey per visitor by boosting the entire user experience to mile delivery experience into a growth engine. increase conversion, average order value, retention, and loyalty.

Żabka is a Polish chain of small and convenient stores that meet the needs of millions of customers The Retail Innovation Club (RIC) is a powerful community of leaders in the retail industry. Since on a daily basis. Since opening its first seven ‘experimental stores’ in Poznań and Swarzędz, Poland opening its doors in 2017, Retail Innovation Club has been on a mission to truly understand the in 1998, Żabka has consolidated its position as the leader in the modern convenience segment. The needs, challenges, and opportunities of the industry and deploy innovation in the world of retail. chain has more than 4,800 franchises and more than 6,300 stores across Poland. The idea behind Their noteworthy network of groundbreaking retail brands and exciting retail-tech startups helps Żabka is proximity and convenience for customers, who can do quick shopping, take advantage of bridge the technological gap between the retail industry and Israel’s revolutionary retail-tech useful everyday services, or eat a hot snack. system. The club was founded in collaboration with Israel’s leading commercial real estate and retail groups and now has become the center to drive new initiatives in the market.

Online Grocery Shopping - Report 27 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 28 Click & Collect presents an additional logistical and operational challenge that retailers have No more missing items or mismatched replacements to solve while also ensuring profitability. The operations behind servicing low volumes from a Transparent communication, being in touch with the customer at all times, smart suggestions, and regular store and scaling the service to a double digit percentage of the business are We took on the task of redefining the online shopping experience with Click & Collect whilst paying the ability to manage substitutions and make informed choices about completing the order. completely different. That's why retailers need to design services with technology in mind special attention to consumer pain points. We designed a Click & Collect application to deliver and as much automation as possible from the start. unrivalled customer convenience. Our prototype was created keeping in mind the changing realities Safe distance in a place full of people with COVID-19 and the lasting impact it will have on the industry long after the pandemic Atanas Sechkov, Founder, Ufleet Given the importance of social distancing, the solution provides the ability to communicate with restrictions are lifted. staff in-app and use touchless payment methods in order to minimize human contact while picking We designed an application that turns an everyday activity into an inspiring end-to-end experience up the order. that takes the least time and effort possible. The following is a list of our ideas. When designing the solution, we focussed on 4 problems: Parcel lockers

Online Grocery Shopping - Report 29 Links to the resources:

https://www.statista.com/statistics/293707/us-online-grocery-sales/ https://www.forbes.com/sites/pamdanziger/2020/03/24/grocery-retail-is-going-to-be-permanently-disrupted-by-coronavirus/#358553e04633 https://www.statista.com/statistics/730982/online-grocery-sales-share-worldwide/ https://www.cnbc.com/2020/05/01/as-coronavirus-pushes-more-grocery-shoppers-online-stores-struggle-with-demand.html https://www.statista.com/statistics/1107859/shifting-to-online-purchases-because-of-the-covid-19-pandemic-by-category/ https://www.mckinsey.com/business-functions/risk/our-insights/return-a-new-muscle-not-just-a-plan https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/why-digital-strategies-fail https://www.bloomberg.com/news/articles/2020-03-17/the-na- tion-is-shutting-down-for-walmart-it-s-time-to-step-up https://www.winsightgrocerybusiness.com/retailers/coronavirus-sales-boom-could-be-short-lived-costly-analyst-warns https://www.techopedia.com/definition/28277/showrooming https://retailwire.com/discussion/is-the-future-of-retailing-going-dark/ https://www.theverge.com/2020/4/13/21218908/amazon-fresh-whole-foods-delivery-waitlist-virtual-line-demand https://www.theverge.com/2020/4/8/21213303/instacart-fast-flexible-order-ahead-delivery-options-crisis https://store.globaldata.com/report/vr0136ch--click-collect-in-the-uk-2018-2023 https://www.statista.com/statistics/1115508/share-of-retailers-implementing-bopis-by-selected-country-worldwide/ https://www.businessinsider.com/e-commerce-shoppers-abandon-carts-at-payment-stage-2016-3?IR=T https://www.statista.com/statistics/934494/click-and-collect-use-europe/ https://ivend.com/survey-report-2019/

Online Grocery Shopping - Report 30 Contributors

Authors Magdalena Pituła Moritz Spangenberg

Editors Jinder Kang Natalia Chrzanowska Katarzyna Karpińska-Nowak

Designer Dejan Baric Looking for advice on how to effectively implement new business models?

Get in touch with Moritz Spangenberg, Strategy & Transformation Leader at Netguru

Moritz Spangenberg Strategy & Transformation Leader at Netguru

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