Lessons learned: How supermarkets are adapting to surge in delivery demand

The onset of the Covid-19 pandemic and subsequent nationwide lockdown created a fundamental shift in consumer demand and expectation from supermarkets.

With many shoppers unwilling or unable to leave their homes and physical stores struggling with excessive queuing and empty shelves, it’s no surprise that online grocery sales grew by 92%, year-on-year, in the months up to July 2020.

That incredible surge for home delivery has been felt right across the industry. Examples include Sainsbury’s, which saw its e-commerce grocery sales leap by 87% in the 16 weeks to 27 June, and 130% in June alone, with online now representing 17% of all grocery sales – up 10% on pre-lockdown figures.

During the early days of lockdown, supermarkets were struggling to provide delivery slots to every enquiring customer. Thankfully, the retail sector is renowned for thinking on its feet and rapidly adapting to shifting market trends; with most brands now utilising technology and smart data to stay ahead of demand and keep their delivery supply chain moving.

One such mechanism has been the roll-out of ‘slot steering’; the practice of nudging local clusters of customers towards delivery slots at around the same time. This means the transport manager at each supermarket can plot the most economic route for drivers – meaning they drive less and can deliver more.

This came into its own during the pandemic, when record numbers of customers were trying to secure delivery slots. The roll-out of slot steering enabled drivers to cover a smaller distance, while dropping off at a greater number of properties – meaning as many customers as possible could get a convenient delivery time.

This technology has been used to great effect by Trakm8 client Iceland, which, as with every other retailer, saw massive uptakes in e-commerce at the outset of the pandemic. Thanks to their utilisation of Trakm8’s Insight Optimisation platform, Iceland has been able to increase driver productivity by 30%, make a 10% saving on fuel and better safeguarding its drivers while out on the road.

While the number of shoppers attempting to book delivery slots online has fallen slightly since the peak of the pandemic, it still remains significantly higher than pre-lockdown levels – and is set to remain that way for the foreseeable future.

Customers who would never have considered it before are now ardent online shoppers and could be less likely to return to physical stores (at least for their grocery shopping), even as restrictions are eased. It’s crucial that retailers continue investing in their fleet and delivery provisions.

Whether that’s considering the size and mix of their fleet (even partial electrification of a fleet could help retailers make considerable savings on fuel), or investing in the right telematics solution to help their drivers work as efficiently as possible, retailers should be considering now how they can remain competitive and continue to meet customer demands.

Peter Mansfield, group sales and marketing Director, Trakm8