Friday, November 29, 2013

Retailing - The raw and the clicked

Grocery has so far resisted the rise of online shopping. That may be about to change

Grocers have held back for good reasons. Like many bricks-and-mortar merchants they fret that online commerce will shrivel sales in stores but not the costs associated with them. Grocery, with its tiny profit margins, adds complications. Virtual shopping-carts contain dozens of low-value items, which must be stored at different temperatures. Retailers can either get in-store staff to pick them off the shelves, which becomes disruptive as volumes rise, or build dedicated warehouses, which is costly. So are home deliveries: even in thickly settled Britain each one costs grocers around £10 ($16), but shoppers typically pay little more than £3.