Online grocery has come a long way in the past 20 months, but as adoption grew more quickly than anyone could have anticipated in early 2020, the limitations of the leading fulfillment methods became increasingly clear. Findings from PYMNTS’ report, The Bring-It-to-Me Economy, created in collaboration with Carat from Fiserv, show that 46% of consumers are buying more groceries online than before March 2020, and with almost half of all shoppers turning to these digital channels, the need to address these points of friction has become more urgent than ever.
The third-party model utilized by Instacart, the largest online grocery company in North America, can be too slow to accommodate high demand, especially in today’s labor environment, and inaccurate order-picking can make it difficult to retain customers. Even when grocers utilize in-house picking teams to fulfill their eCommerce orders, allowing them to retain the profits from each order, these speed and accuracy challenges persist.
Brian Ballard, SVP of solution delivery at technology firm TeamViewer and founder and CEO of augmented reality (AR) subsidiary Upskill, spoke with PYMNTS about the challenges of the model.
“If you look at the change in buyer trends over the last 24 months, and heavily accelerated over the last 18 because the consumer interest in buying online and picking up curbside,” Ballard said, “there’s a speed, capacity and accuracy challenge and, frankly, also [it is difficult] to maintain any kind of margin in the extremely tight industry that is retail and grocery.”
Earlier this month, TeamViewer announced a partnership with Google Cloud to create AR Google Glass tools for more efficient in-store picking. The technology aims to free up pickers’ hands, so that they can work more quickly, and to help locate items, promising to boost speed by between 15% and 40%.
Putting the Robo-Cart before the Robo-Horse
Ballard believes that some in the space are being too hasty in their efforts to bring technology into the shopping journey.
“There’s often a frequent driver just to rush to automate — so, how do you take people out of the equation, how do you just put robots in?” said Ballard. He believes, however, that this mad dash overlooks “a ton of added capabilities people bring into the equation.”
One of the leading models that runs counter to TeamViewer’s approach, which relies on equipping in-store pickers with digital equipment that boosts their productivity, is the one being developed by grocers and technology providers working on automated warehouses such as micro-fulfillment centers (MFCs) and robotics-powered dark stores.
These businesses argue that any in-store picking model is, at its core, limited by being tied to the physical, shopper-facing store, while in fact it is possible to design spaces and technologies specifically for the purpose of fulfilling online orders.
For example, Colman Roche, vice president of eCommerce and retail at logistics solutions provider Swisslog, told PYMNTS in an interview that grocers utilizing in-store pickers “run very quickly into congestion problems within stores, which scares regular customers.” However, he noted that MFC technology is still in its early stages, adding, “I think you’ll see different strategies pursued by national and regional grocers. It’s continuing to be a highly changeable environment.”
‘The Connected Workforce’
As a counterpoint to the scramble for total automation, Ballard argues for a hybrid approach.
“The [major] trend that we see happening is what we call the connected workforce storyline,” he said.
He explained that workers in office jobs sitting at a computer are already connected to a wide range of digital tools that provide access to information and resources. For the most part, however, workers on their feet such as in-store pickers have not had this degree of access.
“So, what is that real-time connection to other people who can help you, other processes that might drive your daily operations?” he said. “That, we think of it as, upskilling is possible when you have a real-time interface to those people and processes.”
He argued that, by equipping pickers with connected technology, grocers can improve performance when it comes to delivery, stocking, quality assurance, shelf design and a range of other processes. Additionally, by integrating artificial intelligence (AI) into the process, he contended, the company is able to “help alleviate a lot of those pressures” of otherwise dull and repetitive tasks.
The Cyborg Shopper
In the future, Ballard sees these AR shopping tools as not only a way for businesses to improve their in-store pickers’ productivity and their experience, but also as a product that can be sold to consumers looking to bring ecommerce convenience and connectivity to their own brick-and-mortar shopping experiences.
“I think this is a technology that consumers will also start to see as well,” he said. “[Retail is] one of the few [industries] where you’re actually engaging in the work operation right next to where the consumers are shopping as well … I think it’ll spark innovation and whole new areas we hadn’t even imagined yet.”