Why Buying Groceries Online Is a Struggle Right Now

Unprepared

First and foremost, the biggest companies offering online grocery shopping were unprepared for the onslaught of COVID-19. Grocery research consultant David Bishop told Medium that the service was a low priority for most companies since any investment in online grocery shopping showed a week return. "Shopping online costs more for the retailer, and was a low priority for grocery stores. They offered it as an add-on, not a core part of their business," he said.

Bishop acknowledged that companies did expect online grocery shopping to take off in the future, but that "this level of online shopping was, at best, forecast to occur five years from now. The demand has overwhelmed the capacity of the retailers."

Paradigm Shift

Even when they knew it was time to adjust, however, retail grocery stores were ill-equipped to make the shift to online orders, according to Pradeep Elankumaran. Elankumaran is the CEO of Farmstead, a grocery delivery company that deals only in online orders. He said that retail stores are designed to make shoppers take their time, which means that pickers gathering an order for them cannot move much more quickly. A warehouse space for online orders only loos very different inside from a retail supermarket.

"Each grocery store can only do about 150–200 orders, max, per day. If you do the math, it's about 7.5 million orders per day, for 128 million U.S. households," he said. "Their layouts are not conducive to e-commerce... What you have is essentially a proxy shopper — that's a one-to-one mapping, which is really inefficient in an e-commerce setting."

Efficiency

Even companies like Amazon Fresh are too centralized, according to Elankumaran. Grocery vendors need more, smaller facilities spread throughout communities than Amazon's existing warehouse model. "The current model is incredibly inefficient — you have bigger warehouses, further away, with very inflexible shopping schedules," he said.

Farmstead has worked out many of the kinks in how to maximize online grocery shopping, even with the addition of social distancing in the workplace. His employees work in small teams of 10 to 12 people, who are able to work on multiple orders at once and service hundreds of customers per day. They also organize their inventory by popularity, which has apparently given some insight into what people are craving during the pandemic.

"We've noticed that people are buying more meat, and a lot, lot, more mac and cheese," he said.

Retailers like Amazon, Kroger and others are already adopting a model like Farmstead's, but naturally, the transition cannot happen overnight.

Supply Chain

Meanwhile, there are other problems upstream in the grocery industry as well. Abe Eshkenazi, the CEO for the Association for Supply Chain Management, said that the ecosystem of moving, packaging and distributing retail goods — broadly referred to as the "supply chain" — is like "an orchestra," and the coronavirus pandemic has completely thrown it off.

"Each part has a specific activity. When you change the output — such as more cold storage, or trucks — it needs to be sequenced, and this takes time" he said. "I can't say, if you just fix X then it works — it's not just one thing."

Supply chain disruptions have all kinds of causes and effects, many of which are not even being analyzed on a macroscopic level yet. However, some stories about farmers dumping huge supplies of milk and produce are a direct result of this sudden shift in the demands of retailers and consumers.

"They're in a position where they either can't maintain the freshness or there's no way to get it to market," Eshkenazi said. "The majority of the products that are available today were planned six to eight months ago." He added that refrigerated food is incredibly difficult to redirect for different markets, such as from restaurants to supermarkets, since things need to be repackaged "for a customer who has different expectations in terms of variety, quantity, and frequency of their orders."

Price

Finally, there is the issue of online grocery shopping prices. Customers have been conditioned to expect online shopping to cost the same — if not less than — retail shopping, even with shipping factored in, but in terms of groceries that is not yet the case.

"You can easily pay 10% more for shopping online," Bishop said. "There is a value for that if you're a young parent, but for many, as concerned as they are about the crisis, they can't justify shopping online."

There is also the issue of equipping online grocers to accept payment forms like SNAP, EBT and WIC — all of which are rare at best right now. These vendors will need to invest heavily in both physical infrastructure and tech development to make their operations efficient, and right now most are not interested in risking that much money.

Eshkenazi noted that retailers will also be more weary than ever of losing money on overstocked items. "They don't want to carry excess inventory of perishable foods to meet a short-term need. The challenge is we don't know the duration of the disruption, so they can't forecast when to move out of a short-term fix and into a long-term one. They're concerned if they're able to recoup [investments] over the long term," he said.

Customer Horror Stories

All of this leads to the customer's end of the transaction, where many are left exasperated by lack of options, difficulties in finding a delivery window and sometimes poor results. Many on social media shared their personal horror stories this week about how online grocery shopping has gone terribly wrong for them.

Customer Praise

On the other hand, some customers chimed in with anecdotes about how well online grocery shopping has gone for them, with some even saying it has gotten better quickly since the pandemic hit. Many were proud to see how fast their community adapted to these new conditions, and they considered the grocery delivery workers front-line responders as well.

The Future

Even considering its current growing pains, the future looks bright for the online grocery shopping industry. Companies that already had one foot in the water on this endeavor are now doubling down, and others are stepping up to join in as well. For millions of out-of-work Americans, this could mean a new career as well.

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