One only has to look around to see the number of people that now order groceries online! This change, while bubbling under in recent years, received a whole new momentum due to the pandemic that was thrust upon us.
If you are an online grocery delivery business, make sure you check off all the boxes that are required to succeed in this rapidly growing, but also highly competitive, market!
Growth and evolution of the online grocery delivery business model.
Saying that “grocery buying habits of consumers have changed significantly over recent years would be stating the obvious!” You, as a consumer, or even through everyday observation, would have already been aware of this.
Just like all our buying habits now include “buying stuff online,” so does buying groceries online due to the ease of shopping from our smartphones/laptops, the convenience of home delivery, easy-reorder reminders (etc.). This healthy mix of reasons has given rise to grocery shopping online, and it has gone on to increasing success. The pandemic may have forced us to buy everything online, but many of us have now adopted some of those habits as an ongoing routine. Grocery shopping is almost certainly at the top of that list.
To the credit of online grocers, they have changed with the times and have quickly ramped up their act in terms of fast delivery, improved systems, online discounts, and “localizing” the experience for local residents.
The good news for the online grocery industry is that its growth trends are expected to stay consistent going forward.
However, where there is an opportunity, there is competition, and it isn’t any different in this industry. Therefore, you must spend some time and effort establishing a successful business model so that you have a solid base to work with. Remember to carefully analyze those of your competitors as well—there’s much to be learned from them!
Top 7 important points while building your online grocery delivery business.
1) Adopt a flexible business model: Based on your market assessment, you will begin with an operating model that you deem fit. However, don’t forget that your growth path, changing competitive environments, and evolving consumer preferences may require you to soon tweak, or even change, your model.
Therefore, be adaptable and flexible with your business model so that you can quickly adapt and shift focus to match the requirements of an evolving industry, and stay in touch with new ideas and innovations that may be required to satisfy customers.
Mobile apps, new software, Web3.0 – all of these are constantly changing and determining customer needs and you must stay abreast with these rapid changes.
2) Conduct a detailed market-analysis: Does your market spread over several areas? Is it suburban, urban, or rural? Or, is it a combination of all such locations? Are you catering to a niche, the mass market, or even the mid-market? What’s your typical customer profile? Age, sex, education, income group, the list of variables is a long one.
Unless you have a correct idea of your market, you won’t be able to develop your offering accordingly, whether it is your website design, your pricing, your product mix, promotions, offers (etc.)
3) Optimized delivery times: Always remember that the convenience of online grocery shopping is two-fold i.e. shopping and delivery, both, from the convenience of consumers’ homes. Therefore, if your delivery isn’t hassle-free, prompt, and organized, you will certainly fall short.
Routing, parcel drop-off/pickup options, and delivery windows are important parts of this business model, particularly in large urban locations with numerous customers, traffic challenges, and schedule requirements (etc.).
Trip frequency, fuel costs, number of trips, weather and traffic delays, vehicle and driver availability (etc.) are factors that must be taken into account while developing the delivery model, its costs, resources, and times. Contingency provisions are also critical since there will be deviations from the projected times. At all times, consumers must be kept informed in real time.
Using modern and user-friendly last-mile delivery software with easy UI/UX for drivers and logistics teams is critical to success here.
Real-time delivery notifications: Similar to food-delivery customers, your online-grocery customers also get upset when their orders are delayed. This means you have to constantly keep your customers updated about the progress of their orders via notifications, SMS, and emails.
Deploying modern, automated dispatch software is the way to go. Depending on the complexity of scale and operations, the software may have a large upfront cost – but, it will pay for itself in no time by giving you, your team members, as well as your customers control and confidence in the shopping process.
4) Pickup options: Build this option into your delivery model i.e. curbside pickup, or pickup from other satellite facilities (e.g. small warehouses, designated areas within malls, etc.) This offers your customers the flexibility to choose their preferences.
5) Maintain a broad product-mix: The profitability of the business is, obviously, very important. Maintaining a wide array of choices, especially like-for-like replacements, is most important. If a product is out of stock, you don’t want your customers to go elsewhere, or not order it at all. Also, if this happened frequently, your customers would start to feel annoyed. And, given the perishable nature of groceries, this is bound to happen.
Studying those grocery items that are fast-moving – especially produce or those on sale or those that peak during weekends – will allow you to offer enough options.
6) Create a memorable virtual buying experience: Payment options, UI-UX, graphics, images, clarity of information such as prices, weight/size of the product, packaging, delivery charges, delivery options…well, the list of items that your company website/App must communicate to your customers is endless!
At the same time, you must not inundate, or confuse, your customers with the plethora of information – while at the same time ensuring they stay engaged, and are able to navigate through your App easily!
Building an App/website that achieves all of the above isn’t easy and you must spend considerable time and effort in doing so. Study your competitors, too – because they will surely be studying yours!
However, once you create a positive experience for your customers, you will almost certainly ensure their return.
7) Relentless focus on customer feedback: Be sure to not only ask for structured feedback from your customers but also make it easy for them to do so (e.g. via online forms, SMS surveys, etc.). Study these comments carefully, for they will help you in learning a lot about your customers. In turn, this will help in improving your service.
Conclusion: As is evident, while the opportunity presented by the online grocery shopping industry is immense, so is the competition. Therefore, you must be on top of your game and adopt all modern practices and technology, such as last mile delivery software for optimized routing and delivery, to run a sustainable and profitable business.