When Erewhon Market enlisted e-commerce startup Homesome to build its digital presence last year, a top objective for the California-based grocer was to come as close as possible to replicating its famed in-store experience for online customers.
Erewhon has also enlisted the tech firm to help it streamline in-store functions, including its high-margin prepared food operation — a signature attraction for the specialty grocer. That includes using technology provided by Homesome to help employees find products faster and allow them to handle tasks at the optimal time to avoid delays, efforts that have paid off for the grocer, said Kabir Jain, Erewhon's chief growth officer.
To accomplish this, the seven-location chain uses Homesome's technology to determine when instructions should be sent to kitchen associates in order to prevent bottlenecks at service counters where employees and shoppers pick up prepared goods, he said.
"Any customer that visits us in-store and has a great experience and then visits us online and it's not up to snuff, we may lose that customer, and that's not okay for us," Jain said.
"The massive benefit of online grocery is that it shines a spotlight on your existing store operations. E-commerce is not a project you run off to the side. It is ultimately just another way the consumer is shopping."
Chief product officer, Wynshop
Applying online metrics across the business
Erewhon's embrace of data generated by its e-commerce activities to help guide its overall operations reflects growing interest by retailers in using online analytics to make business decisions — especially since the pandemic ignited consumer demand for digital grocery — industry officials said.
It also underscores the connections retailers are trying to make between their online and offline shopping operations as more and more consumers toggle between the two channels.
"The massive benefit of online grocery is that it shines a spotlight on your existing store operations," said Barry Clogan, chief product officer of Wynshop, another e-commerce technology provider. "E-commerce is not a project you run off to the side. It is ultimately just another way the consumer is shopping."
A key area where online metrics can help retailers strategize is product availability, because digital ordering technology is particularly useful for tracking products at a granular level and picking up potential supply problems, said Clogan, pointing to clients like Cub Foods and Wakefern Food as examples of retailers that are making this connection.
Wynshop, formerly known as ThryveAI, also serves grocery chains including Meijer, United Supermarkets, Harris Teeter and Foodland.
Homesome points out to retailers that data about how long it takes for staff members to pick orders for e-commerce shoppers can help them make other decisions about organizing products in stores, said Rahul Chabukswar, the tech firm's founder and CEO. Similarly, data about items people buy together online can help retailers determine which items to place in close proximity for in-store shoppers, whose picking patterns can be harder to discern, he said.
Chabukswar said the company's goal is to give retailers a "unified view" of their online and store operations. "What you should be able to say is, 'What is my total and then what is my breakdown in e-commerce and in-store?' And then be able to piece together an insight from that so that you can actually drive some meaningful improvements across your entire operation," he said.
Homesome is working to demonstrate to grocers how sales data gleaned from their online and physical store can be used in tandem to improve functions like inventory management, Chabukswar added. The company is developing features for its platform that will make it easier for grocers to merge and parse analytics from point-of-sale transactions in stores with data reflecting e-commerce sales, he said.
Smart carts to in-store stocking
E-commerce firms' bid to help with in-store operations comes as retailers are increasingly fusing online operations and experiences into their stores.
Deli counters now handle in-person orders as well as those placed via app. Next-generation stores are encouraging shoppers to use their mobile phones to learn more about the products they buy and even place orders while shopping. And in a growing number of locations, shoppers can place products in smart carts that automatically scan products, and that promise to eventually help them order items that aren't available on shelves.
In another sign of this omnichannel shift, e-commerce giant Instacart made two acquisitions last year that brought it deeper into grocery stores. The company said its acquisition of catering management firm FoodStorm would boost its prepared foods business. Meanwhile, Instacart's purchase of smart cart maker Caper is aimed at smoothing shopping for consumers while making it easier for Instacart workers to fulfill orders, according to the company.
Experts have said Instacart needs to boost its value to retailers by offering more services, and said the acquisition of Caper, in particular, will help the company gather consumer data on in-store shopping for retailers as well as its digital ads business.
Other e-commerce platform developers are also emphasizing the relationship between online and in-store sales. Mercatus Technologies, for example, is seeing retailers it works with use data from their digital operations to combat gridlock in their stores caused by online order pickers walking aisles alongside shoppers, said Sylvain Perrier, president and CEO of the Toronto-based company.
"Retailers are starting to understand the volume [online] of orders and the gear and the equipment they use, and they eventually start to realize maybe it's time to move to a dark store model, or we're only going to pick and pack during this time period during the day and we're going to get out of our consumers' way" when stores are more crowded with shoppers, said Perrier, whose company works with retailers including WinCo Foods, Piggly Wiggly Midwest and Stater Bros.
Grocers are also finding that details they are able to collect about how online shoppers make purchasing decisions are helping them plot strategies for keeping stores stocked, Perrier said. In addition, software used to enable e-commerce is helping supermarket chains understand patterns that can help them deploy workers more efficiently and deal with absenteeism, he said.
Perrier noted that conventional supermarket chains face intense pressure from technology-focused retailers like Walmart and Amazon that have invested heavily in closely integrating their online and physical store operations.
"They're plotting a course forward and trying to understand where can we innovate across the supply chain down into fulfillment at store level, and it's not necessarily tied to e-commerce, but tied to the business in general," Perrier said. "I think as a traditional grocer, you really have no choice here."