We are in that period of time where everything from high-quality spa services to ready-to-eat meals; everything is being delivered right to our doorstep.
And hence it is only the next-step that we even start purchasing our daily provisions and groceries online too!
Online grocery stores have become the next-in-thing in the world of eCommerce Marketplace Business.
What is an online grocery store?
Definition wise, an Online Grocer is nothing but a traditional supermarket or a grocery store that allows ordering through the internet. It was possible through –
- Either their own website or another eCommerce website or even through a mobile application. This made the lives of common men, especially working-class people much simpler as all they were required to do was select items and pay for them online without the messy, long check-out queues.
- Post this they could either collect it themselves by visiting the store on their way home or get it delivered to their doorstep if that store was within the store’s geographical radius of delivery.
When there was a survey conducted from the customer’s point of view regarding online grocery store shopping, this was the result:
How to set up your own online grocery store?
This concept is not new, Webvan and HomeGrocer.com were launched way back in the 90s itself.
They even obtained great investments that allowed them to create the infrastructure needed to support the business, including warehouses and a fleet of vans.
Their early growth looked extremely promising, and by mid-2000, sales had reached over $1 million on a per-day basis.
But where are these online stores now?
What was the reason for their downfall?
Here are some of their crucial missteps:
They overestimated the profit margin of the online orders.
In a traditional grocery store, the customer comes to the supermarket, picks products himself, and takes them home.
But, in online stores that’s not the case. The vendor picks products and delivers them. Unfortunately, customers are not willing to bear the cost of delivery and handling fees.
This results in relatively lower margins of profits.
The companies did not consider the ROI.
The fact that while the grocery sector generates high sales, its margins are low; meaning, the returns on the huge investments are extremely slow.
The very fast-paced expansion resulted in a negative impact on its balance sheets.
The impact of an online grocery store was overestimated.
As with most predictions about online stores back in the 90s, the impact of this online business model was gravely overestimated.
They were of the opinion that this would revolutionize the industry but were poorly misled. This accounted only for over 0.09% of all online grocery store expenditure which was nowhere close to what the startups had estimated.
So, taking these lessons as our precautionary measures, let’s now see how to set up an online grocery store and operate efficiently to reap sizable profits.
What you need to prepare:
Plan and strategize your online store business
This is the founding step of your business. This phase needs most of your time investment as here is where you plan your whole business model and its operational details.
You should also consider all the factors that are involved with delivering food articles like its lifespan, perishability, durability, and many more.
Below is a pictorial representation of the basic business model that you can follow for your Online Grocery Store business.
There is always room to improvise and customize it to suit your requirements.
Analyze your competitors
There is always something to learn from your peers and counterparts. Since many have already set their foot in this field, you can study their methods, tactics, etc.
You could do a SWOT analysis on them and use that data to understand and build your business.
Find your niche
Establishing your business can prove to be a tough task as the market already has well-established and popular grocery stores.
Hence you will have to research and plan in such a way that you stand out from the rest.
Eg: You can concentrate on a single category of products and sell more fruits or grains or vegetables instead of selling every item out there.
Partner with reliable grocery suppliers
Since you are just starting your business, it is better to start off with lesser geographical locations. Do wide research and analysis and zero in on the best available partners.
The major supply partners required for the online grocery store business are:
- Delivery partners
- Wholesalers and
- Grocery stores
Develop your application
Once you are sure of all the documentation you require to build your online grocery store, it’s time to bring the application to life. There are three main ways in which you can build your application.
Build it from scratch:
- On your own or
- Hire a capable tech team
- Use a SaaS platform
- Buy an Instacart Clone Script
Choose the best-suited method based on your ability to invest. You will definitely have a budget, time frame, and plan in your mind. Judge which suits these three conditions the best and go with it.
Once you have your application built, you will need to monetize it. You can implement any of the below methods for this purpose.
How to monetize your online grocery store?
Commission based monetization
For every order that your partners get, you can fix a certain percentage as your commission. This model of monetization will help quicken your growth as well.
This is a model where you charge your customers with a fixed, periodic subscription amount. To make this plan look more attractive to your customers, you can also add a few discount vouchers, or free delivery accesses for a few orders, and many such innovative offers.
The Hybrid solution
Best of both the above worlds. You can charge your partners with the commission and your customers with a subscription amount.
This is the model that most of the successful online grocers use.
Launching your application is the final and the most important step. You will have to incorporate eye-catchy offers in order to pull in the crowd. And personalization is the key holder for a successful launch.
Here are a few tips that you can work on.
- Provide some innovative recipes
- Add additional discounts and offers if there are any friend/family references
- Enable an option wherein they can upload a list and automate it to be delivered periodically
- Add a feature where they can share a cart with fellow customers
How to utilize digital marketing for your online grocery store?
In the current pandemic situation, this service is in high demand. Make sure to make wise and optimum usage of this opportunity and carve yourself a niche in the eCommerce business world. To help you with digital marketing, here are a few tips.
Select your Target Audience
This is one of the crucial parts of the growth of your business. Knowing to whom your product is a perfect fit is a crucial part.
Researching and getting to know their lifestyle, demographics, and interests will help you design and develop your marketing plan targeting those areas.
This provides good content marketing strategies, opens strong communication channels, and creates a better portrayal of the brand message.
Social Media Marketing
Social Media has become a huge platform that connects people worldwide and it is one such platform that provides international visibility.
If used the right way you could use this platform to drive traffic to your online grocery store website as well.
Some of the most used Social Media platforms are – Facebook, Instagram, and Twitter. Create an account and make yourself visible to the social media family.
Create unique content, eye-catchy graphics, and aim at grabbing the attention of the audience. This is proven to be one of the most effective ways of increasing your customer base.
In current times, people are more into researching a product through reviews, ratings, and gaining insight through other people’s experiences.
Leveraging social media influencers is a great way of creating a digital marketing strategy.
Getting an influencer to talk about or demonstrate your application website will definitely catch his or her follower’s attention and thus help in converting these viewers into potential customers.
The “trust factor” plays a great role in the Influencer Marketing strategy thus directly reflecting on the customer conversion rates.
This is a great way to reach out to a particular niche of the audience. Email marketing is one of the best strategies to get user engagements to your website.
The catch being, the right content. If the content is not appropriate or not eye-pleasing and precise then there is a high chance of you getting categorized as spam.
On average people do not spend more than 3 minutes on one email. And hence keeping this short span in mind, you need to format your content accordingly.
Providing offers and discount coupons is a way to attract an audience through email marketing.
Google is the most browsed search engine.
Here is when SEO (Search Engine Optimization) comes into play. The apt usage of the keywords, good content, developing creative yet efficient website design, and a faster loading speed plays a pivotal role.
This will help gain the required ranking on your search engine and hence help grab the attention of the audience. This in turn will increase the traffic to your website.
Hope now you have gained some knowledge on how to get your Online Grocery Store up and running. Don’t fret if you face any roadblocks. We are just a click away to help you with any of your business needs!
I am a professional blogger, guest writer, Influencer & an eCommerce expert. Currently associated with ShopyGen as a content marketing strategist. I also report on the latest happenings and trends associated with the eCommerce industry. Follow me on Twitter @Jessicabruc (https://twitter.com/Jessicabruc)
Tags: digital marketing, ecommerce, online grocery store