March 11, 20215 yr Benchmarkers Interesting article in FT .. 'Stores still matter when it comes to online groceries' ... Stores still matter when it comes to online groceries | Financial Times (ft.com) Key Takeaways - Whilst online grocery spending has surged during pandemic, profiting from additional revenue is proving a challenge. "Bain estimates companies that use staff to fill online orders in a store and deliver them lose between 10 and 15 per cent on every order, depending on the delivery fees." The most cost-effective method to deliver online orders is to leverage "smaller, automated warehouses, often attached to a store". J Sainsbury, the UK’s second largest grocer, last week announced plans to close its London online fulfilment centre and plans to upgrading online departments in more than 20 London-area store in order to "cut delivery distances and share staff and inventory costs" and "shift to a lower cost model". What do you think? ... are decentralised mini / micro fulfilment centres more efficient ? ... what criteria should be used by retail tenants to determine optimal locations ?
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