Fulfilling Customer Expectations in the Food and Beverage E-Commerce Industry

Luis Almeida Vargas

Gurram Gopal, Ph.D.

Fall 2016

The application of e-commerce to the food and beverage industry has created new business opportunities for restaurants, supermarkets and food stores. According to Business Insider (2015), while the overall food and beverage industry in the U.S. exceeds $600 billion a year in sales, online sales account for less than one percent. Business Insider also estimates that “Between 2013 and 2018, online grocery sales will grow at a compound annual growth rate (CAGR) of 21.1%, reaching nearly $18 billion by the end of the forecast period.” However, fulfilling customer expectations is one of the biggest challenges for companies.

Luis Almeida Vargas, a recent graduate from Illinois Institute of Technology Masters in Industrial Technology and Management (MITO), conducted in-depth research on this topic and wrote a special project report titled "Fulfilling Customer Expectations in the Food and Beverage E-Commerce Industry.” In this report he analyzes the new paradigm in the US food industry and its related markets and conducts a detailed study of the customer profile. Taking into account demographic, technological and behavioral aspects he presents an overview of the online food and beverage customer and their expectations. This project addresses the importance of logistics in this industry and how it plays a key determinant role in fulfilling customer expectations. It analyses the problems encountered in the last mile, which are especially relevant to the food industry due to product perishability and customer time-oriented demands. The latest explosion of e-commerce has reopened an old service that was common in the middle of the 20th century, the “Milkman.” Home delivery of milk and other products was common for many families in North America and Europe during the 1950s and 1960s but became less popular over time due to the increasing availability of home refrigeration and other factors. With the help of e-commerce and the features that it can offer this concept has become popular again. Luis Vargas presents possible effective and efficient logistics solutions that take into account timely delivery, cost, environmental issues and other factors and help companies manage and fulfill customer expectations. 

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