Grocery delivery is a booming industry.
As the demand for grocery delivery continues to grow, so does the need for route optimization. Route optimization will help you get more out of your fleet and use this as a growth channel.
Here’s what you need to know.
Why is Grocery Delivery So Popular?
Grocery delivery has become one of the most popular business models for entrepreneurs to invest in. In fact, it’s been estimated that there are now more grocery delivery companies than chains and independent stores combined.
In a time when many businesses struggle to keep up with demand, supermarkets have an edge over other retailers because they already have a built-in customer base. Because of this, they’re able to quickly convert trial users into paying customers.
With their existing infrastructure and customer base, supermarkets can ride out the initial challenges that come with such a strenuous business model more easily than other businesses.
Having an efficient fleet helps these companies expand even further and stay ahead of the curve when it comes to the quickly-changing grocery delivery landscape.
What Makes Grocery Delivery Difficult?
Delivering products to customers’ homes is a difficult business model that comes with a number of unique challenges.
For one, it’s a labor-intensive process. Unlike going to the store, checking out products, and bringing them back, grocery delivery requires users to have their items delivered straight to their doorstep – which involves many more steps overall. In addition to this, grocery delivery companies need their employees to cover a much larger territory in a limited amount of time.
Freshness is also a concern. Grocery delivery is still a relatively new industry, so the shelf life of products isn’t as guaranteed as other retailers might have you believe. If an item spoils or expires en route to the customer, it’s the driver who will be held responsible – making this issue even more difficult.
Customers are very picky when it comes to their groceries. They don’t just want a bunch of bananas — they want the right bunch of bananas. And according to a recent study, almost half of the grocery shoppers in the US cite product assortment as their top issue with eCommerce.
Because online stores have a limited amount of space for displaying their products, they need to make sure they get it right – which sometimes means making multiple trips to fulfill the customer’s order. This eats up valuable time and increases the chance of human error.
So why are grocery delivery companies so reliant on route optimization?
Route Optimization is Needed to Make Delivery More Efficient
To ensure that they provide the best customer experience possible, grocery delivery companies need to maximize their efficiency through an optimal route planning system. By using a dedicated route optimization tool, you can optimize your drivers’ routes so they cover more ground in a limited amount of time, visit fewer places and return home sooner.
Most importantly, this helps you ensure that each driver is continuously working on a route that makes sense for them. This way, they can focus on getting their assigned areas done rather than wasting time trying to figure out where to go next as they make their rounds.
This is important for grocery stores for a few reasons:
1. More Efficiency = Lower Costs
More efficient delivery means more customer orders are fulfilled, which boosts revenue per driver. This, in turn, leads to fewer drivers needed to operate your fleet — which means lower costs on labor and gas.
2. Time is Money
When you’re working on the same route every day, it’s easy to get into a routine. Routes that are visited daily can be planned out in advance, allowing drivers to finish faster and spend less time on the road. This gives them more time to visit multiple stops and keep their workday going longer without sacrificing time at home with family or friends.
3. Less Driving = More Rest
Drivers who operate on less-efficient routes are more likely to arrive home tired and worn out because they’re spending so much time behind the wheel. This, in turn, increases the risk of accidents – hurting both your company’s reputation and increasing liability costs.
How Can I Optimize My Deliveries?
The good news is that there are several software solutions available that can help you maximize your efficiency. These are especially helpful for smaller independent grocery stores who are just starting out — they have fewer resources to dedicate to developing their own route optimization system.
There are three main aspects of a delivery service that need to be optimized: customers, drivers, and routes.
Customer segmentation means being able to identify the best customers to visit on a given day. In the morning, some customers may receive their groceries before others — meaning it makes more sense to visit them first.
On the other hand, you might want to prioritize certain customers who live greater distances away from your store location. That way, you can use up hours of time driving past these locations without stopping.
Even if customers live on the same street, the time of day affects which customer you should visit first. One may be on their way to work or school, while another might be at home with nothing to do but wait for their groceries!
Customer segmentation is especially important when it comes to delivery services because they are reliant on making frequent stops. With fewer visits, they can deliver more orders and increase their per-driver revenue and efficiency.
Knowing the best time to visit is even more important for grocery delivery companies who offer same-day service. Customers expect fresh produce and meat – which means groceries need to be picked up from your store as soon as possible! If you’re using an automated route optimization tool, you can also specify when they need to leave the store.
This allows you to guarantee a faster turnaround for pick-ups and deliveries – which keeps customers happy and saves them a trip back to your store.
Another important aspect of route planning is driver allocation. Because grocery delivery companies have a lot of drivers on the road at once, it’s essential to make sure they’re equipped for the right tasks. In some cases, you might want to allocate drivers by area for a certain number of hours, then change their status.
This way, they can be working on one part of the city while someone else is taking care of another — making more efficient use of your entire fleet!
What Software Can I Use?
Great question! There are a number of different solutions available that can help.
We’ve put together a helpful list here. But we think that Less Platform is your best option.
Less is the only route optimization tool that helps grocery stores find their most profitable deliveries. It automatically determines which stops to visit in the morning based on the best number of drivers and hours you have available.
The best part? It’s free to try for 30-days.