Texas supermarket chain teams up with specialized software providers to manage home delivery

0

Ecommerce, a major factor in most retail categories these days, is still very much a minority activity in groceries; according to a recent report from Deutsche Bank Securities, only about 3 percent of U.S. grocery sales takes place online. The reasons for this are fairly obvious — huge inventory, low profit margins and the need to keep things cold, among others — but that doesn’t mean consumers don’t want it. United Supermarkets began offering a choice of delivery or buy online, pick up in store in November 2016, and is “seeing triple-digit, year-over-year increases as we continue to add delivery and pickup locations in our major service areas,” says Chris Farr, ecommerce manager.

In some ways, United Supermarkets could serve as a textbook illustration of the challenges involved in ecommerce for groceries. The company, which was acquired by Albertsons Companies in 2013, operates 95 stores in 51 communities across northwest Texas and New Mexico. Brands include United Supermarkets (a traditional grocery store), Market Street (in-house prepared bakery items, and deli), Amigos (Mexican specialties) and Albertsons Market (former Albertsons outlets in New Mexico now managed by the United Supermarkets division).

A quick look at a map will clarify the challenges in providing grocery delivery in a territory like this. It’s 125 miles from Amarillo to Lubbock, two of United’s larger markets in Texas; there are towns in between, but there aren’t very many of them, and they aren’t very big. On the New Mexico side of the line, it’s like that only more so: From Alamogordo to Albuquerque it’s 155 miles as the crow flies, 210 if you go by car; along the way there’s some beautiful desert scenery and the White Sands Missile Range, and not a lot else.

DELIVERY LOCATIONS

All of which means it’s impractical and uneconomic to offer home grocery delivery to large portions of the Texas panhandle and New Mexico. The good news is, it’s also unnecessary; a map will also tell you that by and large, people in the West live pretty much the same way as people everywhere else in the country, i.e., in cities and towns.

“We’ve got 14 delivery locations,” Farr says, “which cover all our major locations across New Mexico and Texas.” Within those locations, United Supermarkets (as themselves, as Market Street or as Albertsons Market; there are plans to add Amigos to the mix eventually) offers customers the ability to shop online and receive delivery within a two-hour window. To manage this operation, Farr and his colleagues rely on the assistance of two software partners, Mi9 Retail (formerly MyWebGrocer) and Onfleet.

Mi9 Retail provides two critical links in the ecommerce chain. It maintains the actual website from which United Supermarkets’ customers place their orders. Once the order is placed, the Mi9 back-end process allows United Supermarkets to pick the order and stage it for delivery.

Which leads to Onfleet. United Supermarkets uses its own trucks and drivers to make deliveries; until last February, store management and dispatchers at each of the 14 delivery locations would route and schedule the orders themselves, relying to a great extent on their understanding of local traffic conditions.

“If I grew up in Lubbock, I know how to get around Lubbock, so I’m going to deliver in what I think is the best way possible” Farr says. “In Dallas, they’re going to deliver however they think is the best way possible.” This approach tends to give rise to inefficiency; it’s going to change based on who’s doing the routing day to day, or if they’re behind or ahead of schedule.

To help impose order on this situation, United Supermarkets turned to Onfleet, a startup that specializes in delivery software. Essentially, it provides an app that lives on each driver’s phone and keeps track of deliveries. It also keeps track of the vehicle’s location so dispatchers, who are using Onfleet’s dashboard, know at a glance where all their drivers are, which deliveries have been completed and — at least roughly — how long it’s going to be for the deliveries in progress to be made.

CLOSING THE LOOP

It can also trigger notifications and real-time tracking information to the customer. Instead of being told by somebody at the store, “Yeah, it’s on its way,” the customer can learn at a glance that the shipment is at the corner of X and Y street and should be there in 15 minutes. Once it arrives, the driver can collect signatures, photos, bar codes and other pertinent information, using the phone and the same app. That all goes immediately to the store’s dashboard, along with the fact that truck so-and-so is at such-and-such an address and ready to head for the next delivery.

“In United’s case, we work with them through an integration with Mi9,” says Onfleet CEO Khaled Naim. “When a customer places an order on United’s website or app, it hits Mi9, which then creates a task on Onfleet. When United is ready to send out deliveries, they’ll select, say, dozens or hundreds of stops and optimize them across their driver fleet, considering vehicle capacity, delivery windows, driver schedules, traffic data, and other constraints. The drivers receive these optimal routes in their app, and then they go about their deliveries.”

Farr says the integration process has been relatively painless. “We actually onboarded a handful of stores at a time, using the interactive videos and training material on Onfleet’s website,” he says. “It’s all gone pretty smoothly.”

MANAGING THE EXPERIENCE

One benefit of using the Onfleet system is that it has made it easier for United Supermarkets to continue using its own trucks and drivers for delivery. “Right now, I think a lot of retailers are going through the dilemma of, ‘Do you handle the last mile yourself, or do you outsource it?’” Farr says. “From the beginning, we’ve been very strong in the belief of handling it ourselves. There’s a cost involved in doing that, managing the salaries and benefits of the drivers and all the other expenses. Onfleet has allowed us to maximize efficiency and reduce cost while not sacrificing control of the customer experience.”

In fact, he says, it has improved the customer experience. “Before, we had no ability to track. Did we deliver on time? Did we leave early, did we leave late? Where’s the truck? The combination of control and analytics has enabled us to stick to our goal of handling everything from beginning to end. I would make that recommendation to any retailer dealing with these issues. You don’t want to be in a position where you do everything right and then pass that last mile to a third party that might or might not have your best interests at heart.”

Peter Johnston, a freelance writer and editor in the New York City  area, can be reached at
pjohnston@foxhoundenterprises.com.

Share.

Comments are closed.