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26May, 2015

Ecommerce and Food and Beverage Retailers

Author Chris Wilson Category

In one of our earlier articles (E-commerce Industry Outlook Series: Food and Beverage Industry E-commerce Sales to Grow 38% by 2016) we had talked about how Food & Beverage industry can immensely benefit by adopting an eCommerce store. Over these last few months, we got an opportunity to work with a few clients in the industry and realized that while they all believed in the potential of eCommerce the adoption rate was still low because of lack of awareness of challenges associated with it.

In the blog below, we have discussed a few factors that play definitive roles in the eCommerce food and beverage industry. These factors must be taken into consideration in order to be a successful and establish Food and Beverage e-tailer:

Logistics (Packaging and Delivery)

  • The shelf life of products in the food and beverage industry can be very short and delivering an item before its expiration/depletion date is the most common pain-point in the industry. Unlike retail outlets, where the product is delivered instantaneously, product delivery is further complicated by product packaging in the world of eCommerce. While many e-stores promise same day delivery, the customer is taxedfor it. There are a couple of ways by which you can address this
    • One is by providing your customers the BOPS (Buy online and pick up in store) option. This way your customers can purchase online from the convenience of their home and pick things up from the store nearest to them.
    • The second option is to go local, and source your products from a local store and deliver the products from there.
    • If the product you are selling is unique then you must consider having your own conventional brick and mortar store in places where the concentration of users is high. By doing so, you can guarantee a fresh item within a few hours rather than days. This not only helps you deliver items faster but also saves you on keeping your delivery costs low.

Infrastructure and Storage

  • Conventional industries within ecommerce have the liberty to store the inventory in regular warehouses. However, similar is not the case in the Food and Beverage industry. Temperature and time matter the most in the F&B business. To keep all the food items in edible condition, infrastructure places a vital role. As many food items have their own storage specification, having infrastructure that satisfies all the conditions is a task in itself. Minute alterations in temperature can lead to huge monetary loss even after you have invested in great infrastructure.
  • Placing the ‘inventory’ within the warehouse at optimum positions becomes critical. While something like this is not heard of in other sub-industries within ecommerce, it pays to have a good workforce along with great ecommerce & ERP integration. A customized alert can be created at every step of the process for both the customer and your employee depending on the item that is to be shipped. In case of an item that has a shorter shelf life, a high priority would be given to ensure it reaches the customer on time.

Efficient Inventory Management

  • While critical to any industry, inventory management holds a special place in the Food & Beverage industry. Businesses not only need a real time view of the inventory but also an effective demand forecasting engine which can to predict sales and help your source inventory accordingly. For this to happen your eCommerce system must work in sync with your fulfillment system (ERP, order management system, etc.). A standalone eCommerce system will not only delay order fulfillment but also cost you in terms of customer experience.

In our next blog we will look at other challenges associated with the industry. What are your thoughts about this blog post? Share your feedback and suggestions by commenting below.

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Ecommerce and Food and Beverage Retailers