E-commerce is gaining ground in the food sector. More and more retailers are starting to offer home delivery also for fresh fruit and vegetables, which requires very specific logistics processes. Reusable transport packaging (RTP) can play an important role in managing this logistical challenge, which is one of the most decisive aspects for the success of e-commerce.
High growth rates in Europe and Germany
The food markets in Germany and Europe are undergoing profound changes. Consumers have more sophisticated needs than before, but at the same time, they want to spend less time doing groceries.
German consumers spend more than 170 billion Euro per year on food, but so far, less than 1% of the total sales are generated by e-commerce. However, for the next ten years, the market research institute GfK expects a real boom in the Internet business in Germany. According to a GfK study last year, food and drugstore products represent one of the fastest growing e-commerce segments. By 2025, e-commerce could account for 16% of all food sales in Germany.
Consumer expectations and logistics challenges
What is the growth engine of e-commerce? An important factor is surely the general change in purchasing habits, given that today's younger generations have grown up with computers and simply extend their buying habits to food products. The continued internationalization and increasing digitalization of the retail market are other important drivers, as European supermarket chains follow the example of their international competitors in other countries.
Apart from reliable logistics, an effective customer service channel, for example through social media or chat windows, is another basic expectation of online customers. According to a recent survey by the market research institute Ipsos, most consumers consider personalised customer support as a critical point. To attract and retain customers, many e-supermarkets offer value-added services, such as recipes, stored shopping lists, product suggestions, lists of frequently purchased products, etc.
Logistical processes
Regarding the delivery of electronic orders, there are several shipping alternatives, from the creation of a delivery service to cooperation with already established service providers, such as DHL. Click & Collect also plays an important role, combining the online ordering process with the collection of products at local points of sale or other convenient locations. This approach is of great help to retailers eager to minimise their logistics costs by avoiding individual deliveries at home, and is also appreciated by many consumers, especially in the French and British markets, as early adopters of the Click & Collect system.
Currently, most electronic food orders are handled manually by professional shoppers at the retail outlets of large distributors or in stores specialised in the handling of electronic orders, the so-called dark stores. An advantage of manual order handling is that capital investment in automation is avoided. On the other hand, the manual picking is expensive, since order pickers generally have to spend considerable time going through the aisles to fulfil the customers' electronic orders.
How RTPs can help in the logistics process
With the strong growth of food e-commerce that is expected in the coming years, it is highly likely that there will be a greater degree of automation in logistics to meet the challenges of flexibility and quick delivery. In this regard, reusable plastic containers can play an important role if logistics processes are properly coordinated. IFCO, the market leader in RTP services, expects an increase in the use of RTP also in the food e-commerce segment and is prepared to support its customers with the development of individualised solutions for the preparation and delivery of orders on the basis of standardised RTPs.
IFCO has a generally positive attitude towards food e-commerce and is able to supply the right packaging solutions also for orders made over the internet, depending on the requirements of customers and suppliers. On demand, for example, IFCO can develop RTPs with the logo of the retail company, both for home delivery and for collection by the consumer. The logistics process is very simple: the final customer returns the RTP to the store or hands it to the driver at the time of the next delivery.
Given how consumers are becoming increasingly aware of environmental issues, we can also expect a growing trend towards the use of returnable packaging in e-commerce, instead of plastic bags and disposable boxes. Of course, the options available depend on the type of products, but commodities are now fairly frequently delivered in RTPs, so the use of RTPs could be extended across the supply chain to the consumer's home, which would contribute to make e-commerce greener.
For more information:
Hillary Femal
VP - Global Mercadoing
T: +1 813 463 4124
E: [email protected]
www.ifco.com
