Supply chain effects in creation of omnichannel customer experience in grocery retail

Online sales have changed the retail industry during the past decade, and the technological developments shape the business blending the digital and physical worlds together. Customers use different channels interchangeably during their buying process. The objective of the study is to identify and analyze the factors affecting this omnichannel customer experience in grocery retail, focusing in the supply chain effects. The empirical part searches for answers from the Finnish grocery industry. The literature review develops an understanding on three domains in this research: omnichannel, grocery industry's distinct features, and supply chain characteristics in omnichannel grocery retail. The academia introduced omnichannel as a term about five years ago. Omnichannel retail means the different sales channels work seamlessly for the customer, and inside the company as well. Omnichannel and supply chain aspects in grocery retail are scarcely researched, since the earlier literature has had a stronger focus on customer motivations. Grocery retail is distinctive field in omnichannel retail due to perishability, low-margin and low-involvement products, frequency and volume of shopping and significance of the downstream supply chain operations. Order picking and delivery demand manual work are identified as the most critical parts of the supply chain. The literature review finishes by offering a framework for the research adapted from four academic research articles. This study is conducted as a qualitative case research. As omnichannel is a new phenomenon in grocery retail especially, and no existing theories prevail, an inductive case study is a suitable method for theory building. Data is collected by interviews from Finnish online grocery professionals, as well as secondary sources like news articles, case studies, media announcements, websites etc. Data analysis aims at explanation building and validating the theoretical framework created from the literature. The research confirmed the significance of the downstream supply chain operations. Order picking and delivery are the most critical aspects in grocery sales through online channels since they are additional steps in the supply chain process, and mostly conducted manually. Only the most developed omnichannel grocers are able to invest in automation technologies but all are streamlining their operations to find cost reductions through efficiencies. Another important aspect in omnichannel grocery retail is the consistency between all sales and media channels. To enable the omnichannel retail, though, the company must have their information supply chain in order. If the sales channels are not working seamlessly in the background, the customer experience can never become seamless, either. The Finnish grocers have improvements to make in their information supply chains but mostly in the consistency and coherence between the different media and sales channels