Skip to main content

Grocers are among the last retailers to embrace e-commerce as they struggle with the labour-intensive economics of having to pick and pack a large number of items and ship them to customers.Aaron Vincent Elkaim/The Canadian Press

Loblaw Cos. Ltd. is finding that its fledgling e-commerce initiative is starting to help it keep store shelves replenished.

The grocer's "click and collect" e-commerce test lets shoppers place an online order, which Loblaw employees pick and pack for customer pickup at one of three Toronto area stores in the pilot.

Staff who pick the groceries early in the day can pinpoint products that are missing from the shelves so they can be restocked quickly, Bruce Burrows, chief information officer at Loblaw, said on Wednesday.

"We think that's a really big side benefit that we get by having this business available to us," Mr. Burrows said in an interview after speaking on a panel at the Retail Council of Canada's annual conference. "It helps us with a better in-stock position."

Grocers are among the last retailers to embrace e-commerce as they struggle with the labour-intensive economics of having to pick and pack a large number of items – many of them needing refrigeration – and ship them to customers.

But supermarkets increasingly will feel the heat as large global players, including Inc. and Wal-Mart Stores Inc., expand their online grocery selling in this country.

E-commerce now makes up less than 1 per cent of Canada's more than $120-billion of annual grocery sales, according to global online market researcher Profitero. But the grocery e-tail segment is expected to more than triple – to 3 per cent of total grocery sales – by the end of 2018, predicted Keith Anderson, a vice-president at Profitero.

Grocery e-commerce sales will grow gradually – and then pick up all of a sudden, he said. And when they do start to expand quickly, it will be "painful" for conventional supermarkets that don't offer cyberselling, he warned.

In Britain, up to 6 per cent of grocery sales are made online, between home deliveries and click and collect, he said.

Mr. Burrows said British grocer Sainsbury found that when it began its click-and-collect e-commerce program, its shelf stocking improved by 20 per cent. Employees were noticing items missing on the shelves and alerting the stores.

"Consumers aren't going to always tell us that something isn't where it's supposed to be," Mr. Burrows said.

Another benefit of e-commerce is that staff notice the wrong pricing on products that can be corrected before shoppers themselves take the merchandise to the checkout – often causing delays as the cashier calls for a price check, he said.

He said Loblaw will expand the click-and-collect online selling program to 50 of its stores by the end of the year. He didn't say where they will be located.

In another new grocery retail initiative, the SmartCentres shopping-centre company launched this week a frozen-food online order pickup at a mall in Oakville, Ont.

As part of the SmartCentres' Penguin Pick-Up effort, the firm is putting freezers in the pickup locations so that frozen food can be ordered at participating stores and shipped to the centre for customer pickup.

"We think it's important that we're part of the evolution and that we're not behind" in e-commerce, said Egil Moller Nielsen, senior vice-president of e-commerce at SmartCentres.

SmartCentres will soon add refrigerators to Penguin Pick-Up centres as well so that shoppers can order fresh food online and have it delivered to the centres, he said. The mall company will expand the pickup centres to more of its shopping centres, he said.