With Amazon, Walmart and Overstock.com tackling the “last mile” of delivering produce, perishables and, yes, even convenience goods to people’s doorsteps, c-store operators must grapple with the threat and potentially expand their role with consumers to stay viable, according to a recent study.
Tracking the growth of online shopping and companies employing either home delivery or pickup grocery services, the 2015 eCommerce SuperStudy from Barrington, Ill.-based Willard Bishop found the $25 billion business “growing and becoming more mainstream.”
What that means for c-stores remains a question, according to Paul Weitzel, managing partner with the consulting firm. “For the convenience channel, it’s an opportunity,” Weitzel says. “It’ll be hard to do profitably—that’s the biggest challenge—but it also poses a threat if the new version of convenience is being able to order all these [items and have them] shipped home.”
The main products delivered, according to the study, are beverages, snacks and paper products. Fresher products, as well as health and beauty items, rank lower in online shopping numbers, Weitzel says.
Still, while demand for online shopping and home delivery may be picking up, technical hurdles exist within the supply chain, according to Mike Lapchick, CEO of Shotfarm, a technology solutions provider based in Chicago. Archaic technologies and methodologies for communicating information about consumer packaged goods are causing frustration for manufacturers, Lapchick says.
For example, many manufacturers allow third parties to take photos of their products on store shelves, document their own data and package and sell that information to retailers. It’s information that’s still circulating, even though it’s outdated.
Also, while standards exist, they are largely ignored by most e-commerce companies such as Amazon, which instead ask manufacturers to conform to their own formats.
“Manufacturers need to be able to work with multiple grocers or online delivery services, each with their own formats,” Lapchick says. “While standardization seems like a good idea, in reality, it’d be similar to France demanding the entire world speak French vs. finding a good translation service.”
That said, many “neighborhood” c-stores may find strong competition emerging from home-delivery competitors, Weitzel says: “C-stores will look at it and may decide to get in the game. It’s only going to grow.”
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