Reduce labor, grow profits with an online fulfillment platform, study says
The Brick Meets Click study found stores averaging between 40 and 150 online orders a week all saw gains in return on investment and profits annually from a software-based fulfillment platform.
A new study finds that grocery retailers using a software-based fulfillment platform for online orders can reduce labor costs and grow profits by about $10,000 per store for those locations that average 70 online orders a week.
Stores that don’t use a software-based fulfillment platform assemble online orders manually from single-order pick lists, which is more time and labor intensive, according to Brick Meets Click, Barrington, Ill., which conducted the study. The software-based fulfillment platform can also be an option for grocers who are not quite ready for an automated, robot-assisted picking system, the study said.
Brick Meets Click analyzed 26 weeks of online transaction data from 77 stores run by two “conventional grocery chains.” While independently performed, the study was funded by ShopperKit, Atlanta, an in-store order fulfillment platform centered on Click & Collect in grocery.
The study also found that grocers using a software-based fulfillment platform grew their profitability mostly from reduced labor costs. In fact, the study attributes 85% of the benefit from the platform came from lower annual labor costs, a net of nearly $8,500 per year for stores doing 70 orders a week.
Other findings include a bump in order value by an average of $8 per order when store associates engaged in real-time text messages with customers and an increase in annual return on investment for all stores using the system. Even stores doing 40 orders a week garnered an uptick in ROI by 15%. Stores doing 70 orders a week or more saw more than 100% increase.