Online grocery stores – Success begins with storage

Books, fashion, travel, and electronics are now widely purchased online. Vast sums are also being poured into B2C furniture retailers and food delivery services. But what about e-commerce for groceries? So far, not much is happening in this sector, but there are indications that a transformation is imminent. It is widely expected that, in addition to offerings from retailers like Rewe and Edeka Amazon also expand its Fresh grocery delivery service

It's no wonder the e-commerce giant sees its opportunity, because according to a survey (YouGov 2016 – Trends: Online Shopping Groceries), one in three internet users in Germany has already ordered groceries online. Shelf-stable items like tea and coffee, sweets, and beverages (water, beer, wine) are still by far the most popular. Refrigerated or even frozen food items are only found at the bottom of the list of online orders. However, 22 percent of shoppers can already imagine buying such products in the future, provided the cold chain is maintained until delivery to their doorstep. Crucial to this, besides transporting the goods in climate-controlled vehicles, is storage and order picking under equally refrigerated conditions. Not an easy task.

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Challenges in online food retail:

• Very broad and heterogeneous product range with varying storage requirements
• Strict adherence to the cold chain during storage and transport
• Frequent and diverse orders require constant replenishment of warehouse or branch facilities
• Customers demand short and flexible delivery times
• High competitive intensity with low margins
• The need for efficient cost and process management

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Delivery from distribution center or branch network?

Established retailers like supermarket chains or discount stores have a locational advantage over pure online food sellers. Their branch networks provide them with numerous potential distribution points, resulting in shorter delivery routes to customers. However, when goods are picked from these stores, they must be manually retrieved from shelves or the warehouse, a comparatively time-consuming process. Furthermore, the product range varies from store to store, and it's not always guaranteed that all (ordered) products are actually in stock at the location closest to the customer.

Pure e-commerce retailers, in contrast, first need to establish a comprehensive network of distribution centers to deliver their goods quickly and fresh to customers. If they forgo a widespread distribution of locations and instead ship from a central distribution center, the items require more complex packaging and shipping costs. However, a much larger inventory can be stored and picked more efficiently in the central warehouse. This is likely one reason why retailers are looking so closely to Amazon ; the company is currently building additional warehouse space in metropolitan areas to leverage its extensive logistics expertise.

Prerequisite: Adherence to the cold chain

Regardless of the distribution channel chosen, all are united by the requirement for hygienic storage and transport, as well as the strict guarantee of an unbroken cold chain. Fresh produce and frozen goods, in particular, require continuous refrigeration to protect them from spoilage. Therefore, there are legal regulations governing food temperatures: frozen meat and fish must be kept at a constant temperature of minus 18 degrees Celsius. Fresh meat is subject to a maximum temperature of 4 degrees, and milk and dairy products to 8 degrees. But it's not only government guidelines that must be followed, as other foods also only keep at specific temperatures. Different recommendations apply to fruits and vegetables depending on the type. For example, apples are recommended at 1 to 4 degrees, while mangoes only require 12 degrees Celsius. Other products, such as chocolate, require temperatures of 15 to 18 degrees. These varying specifications illustrate the complex demands placed on food logistics. Refrigerated vehicles and storage facilities therefore often have multiple cold compartments with different temperature zones.

Requirements for climate-controlled storage systems

If goods are not picked from a central warehouse or directly from the nearest supermarket branch, climate-controlled storage units are a suitable buffer solution. Many systems on the market achieve temperatures as low as -20°C. To ensure constant temperatures inside the units, sealed airlock doors minimize air exchange during storage and retrieval. Furthermore, due to the high-density storage of products, the refrigerated space is kept as small as possible. For optimal operation, all components of the storage systems are designed for use at the required temperatures. The systems are cooled using environmentally friendly refrigerants such as carbon dioxide or propane. Overall, the coordination between the storage system itself, the insulation, airlock function, and ventilation technology plays a crucial role in controlled climate control. Only when the various functions are optimally coordinated can unnecessary energy losses, icing, or condensation be avoided.

To ensure that ordered items are ready for shipment quickly, efficient order picking is essential. Warehouse solutions that batch picking . Ultimately, the faster the goods are ready for shipment to the customer, the faster they arrive at their home. And alongside product selection and competitive pricing, the success of online grocery e-commerce hinges on fast delivery times.

Storage tips and assistance: Xpert.Plus offers consulting services in the areas of search engine optimization and warehouse optimization for online food shops.

Xpert.Plus is a project from Xpert.Digital. We have many years of experience in supporting and advising on storage solutions and in warehouse optimization , which we bundle in a large network Xpert.Plus

I would be happy to serve as your personal advisor.

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Xpert.Digital – Konrad Wolfenstein

Xpert.Digital is a hub for industry with a focus on digitalization, mechanical engineering, logistics/intralogistics and photovoltaics.

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