5 Strategies to Cut Shipping and Delivery Costs for Food Retailers

With online grocery sales soaring in the past few years, grocers and other food retailers are shipping and delivering more products than ever. However, shipping and delivery costs can quickly eat away at your profits and impact your bottom line. 

In this article, we’re going to look at five strategies you can use to cut back on shipping and delivery costs. 

1. “Smart” Partnering with Third-Party Delivery Services

For same-day delivery of groceries, the most common option is to work with a third-party provider; this is often the easiest but comes at short-term and long-term costs. You want to have options, and not rely just on one partner. Many groceries are reevaluating how to best utilize this service. 

For example, many groceries are picking and staging the bags themselves for customer satisfaction and from a cost perspective. Bagging the items is often the most difficult and time-consuming part. If you perform this function well, it will save much on the overall delivery cost. 

For certain groceries, they choose to use their own staff to deliver orders for overall quality control. The ROI will vary based on the location and volume. For example, one of our largest customers uses their own drivers for delivery. The main message here is that you have options and can work with 3rd-party smartly to reduce costs.

With Local Express, you can have the only online storefront platform that supports shipping, delivery, and in-store pickup. It also lets you work with the vendor or vendors you want, that way you can choose the best option(s) for you. And for those with their own drivers, we have a fully integrated driver delivery app, meaning tracking and logistics are streamlined.

2. Find the Best Delivery Company in Your Area

Let’s assume that for your store, it’s better for your staff to collect and stage the order for local deliveries. For many, you’ll need to work with a delivery company to provide last-mile delivery. The rates and coverage of same-day last-mile delivery vary, so you want to make sure you pick the best one for your area.

With Local Express, we have identified and integrated with multiple delivery companies in your area and negotiated the fees and coverage. Once you are on your Local Express platform, you can be integrated with a number of delivery companies—all with a single click. 

The best part is that you can ask them to bid for the delivery, that way you can choose the lowest price or the best service. Even when customers pay for the delivery, you want to give them the best option so they will keep coming back to you online or at the physical store.

3. Promote Delivery Alternatives

Another way you can cut back on shipping and delivery costs is by encouraging customers to use delivery alternatives. Buy online pickup in-store (BOPIS) has become increasingly popular since COVID, and many customers now prefer shopping this way. If you increase the number of customers buying in-store or BOPIS, you can cut back on shipping and delivery costs. 

This option is also very popular with consumers because it is convenient and saves them money on delivery costs. There are other reasons that consumers like BOPIS; the main reason is that they don’t have to go home and wait for deliveries, can pick up last-minute items, and more. 

Local Express platform supports in-store pickup, as well as curbside pickup. When you work with Local Express, you can give your customers the freedom to shop how they want to. And if you encourage delivery alternatives like BOPIS via promotions, savings, and more, you’re sure to reduce your shipping and delivery costs.

4. Encourage Bulk Ordering

For customers that want items shipped (long-distance), you can try encouraging them to buy in bulk. It may seem counterintuitive since a bigger package costs more to ship, but it’s cheaper and saves time in the long run when someone orders bulk. One heavy package will ultimately cost less and take less time to ship and deliver than a dozen smaller packages. 

However, if the package is too big or irregular, then the shipping cost can be higher. You want to make sure that it’s packaged well; damaged or returned boxes can quickly increase costs. 

Packaging is something that is often overlooked in terms of shipping and delivery for grocers/food retailers, but making some changes to your packaging can save you more money than you might think. 

And with the tools and technology we can provide, bulk ordering and shipping/delivery are no problem. Local Express platform is tailored to grocers and food retailers, meaning we can handle all types of orders—including special orders (like frozen foods or custom-cut meats) and bulk orders. With Local Express, your customers can order in bulk while you save valuable time and money on shipping and delivery.

5. Utilize Automation

The future of automation and AI may be a hot topic in the tech world, but it can already help grocers cut back on shipping and delivery costs. You don’t need robots—yet. An automated online ordering system can do a great job when it comes to processing payments, sending out confirmation emails, tracking, inventory, and more. Improving your operations with better systems and data can save a lot of time and money.

Again, processing and preparing grocery orders so that they can be picked and packed are the most expensive components of delivery cost. With the Local Express platform, you can track inventory at a bin level and create the most efficient routing of pick-list and have the option to multi-pick orders. This is a critical time saver, which helps your bottom line.

Reduce Shipping and Delivery Costs with Local Express

Shipping and delivery costs can add up quickly, especially if you’re an independent grocer or food retailer trying to do it all by yourself. Thankfully, there are plenty of ways to cut costs while providing the same quality of service your customers expect. 

Optimize your shipping and delivery with Local Express. We have a multitude of ways we can help you cut down on costs, from automation and third-party services to bulk ordering and BOPIS.

If you’re tired of losing profits on shipping and delivery, reach out to Local Express today.