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Why Supermarket E-Commerce Growth will Require Packaging Standardization

Posted by IFCO Systems
September 02, 2015

                                                                                                                            Photo Courtesy of Dematic Corp

The U.S. Commerce Department reported that American consumers spent $591.6 billion buying groceries during 2014. While just a tiny percentage of that was generated through e-commerce or online sales, it is a niche that after years of slow growth is now scaling rapidly.E-commerce is a fast approaching and massive opportunity for the supermarket industry, and the numbers prove it.

U.S. consumers spent roughly $18 to $24 billion buying groceries through e-commerce in 2014, amounting to 3 to 4 percent of their total grocery expenditure. That percentage might seem tiny, but consider that three years ago, online grocery generated less than 1 percent of sales. Online grocery sales are anticipated to grow by over 21 percent yearly through 2018, versus a comparable 3.1 sales growth estimate for conventional retail sales.

So what is driving e-commerce growth? Sean O’Farrell, Market Development Director for DEMATIC Corp, a leading automation equipment system provider says that it’s the “Amazon Effect” in some ways, but also due to the millennial generation followed by Baby Boomers. These tech-savvy gens are looking for convenience and simplicity in their lives. This, in turn, leads to a need to fill an order quickly and accurately, and deliver within a small window of time. Automation allows for fast order fulfillment while giving the analytics to see what is happening real-time in your operation.

In the supermarket industry, automation presents several challenges, including flexibility and scalability. Another key issue is transport packaging standardization. The lack of reusable packaging in the food industry will be a hurdle, especially for fresh produce, due to the nature of the supply chain.

Europe is out in front of North America with this effort through a wide adoption of reusable plastic containers. With RPCs, fresh produce can be placed directly onto the display shelf without being touched since harvest. Implementation and use of reusable containers can help supermarkets accelerate automation adaption, while maintaining quality of packaging and reliability during transport.

To learn more about how RPCs are critical to e-commerce and automation conversion in the fresh supply chain, click here.

Reusable Packaging is Critical to Automation