We are in that period where everything from high-end spa services to ready-to-eat meals are delivered to our door.
And so it’s only the next step that we start buying our daily provisions and groceries online too!
What is an online grocery store?
Definition wise, an Online Grocery is nothing but a traditional supermarket or grocery store that allows ordering via the Internet. It was possible through –
- Either their own website or another eCommerce website or even through a mobile application. This made life much easier for ordinary men, especially workers, because all they had to do was select items and pay online without the messy, long queues at checkout.
- They could pick it up themselves by visiting the store on their way home or have it delivered to their home if that store was within the geographic radius of the delivery.
How do you set up your own online grocery store?
This concept is not new, Webvan and HomeGrocer.com were launched back in the 1990s.
In fact, they obtained large investments that allowed them to create the necessary infrastructure to support the business, including warehouses and a fleet of delivery trucks.
Their early growth looked very promising, and by the mid-2000s sales were over $1 million per day.
But where are these online stores now?
What was the reason for their demise?
Here are some of their crucial missteps:
- They overestimated the profit margin of online orders.
In a traditional grocery store, the customer comes to the grocery store, picks out products and takes them home.
But in online stores, this is not the case. The retailer chooses the products and delivers them. Unfortunately, customers are not willing to bear the cost of delivery and handling.
- The companies did not take ROI into account.
The fact that while the grocery industry generates high sales, the margins are low; that means the return on the huge investments is extremely low. The very rapid expansion has had a negative impact on balance sheets.
- The impact of an online grocery store was overestimated.
As with most predictions about online stores in the 1990s, the impact of this online business model was seriously overestimated.
They believed that this would revolutionize the industry, but were badly misled. It only accounted for more than 0.09% of all online grocery spending, which was nowhere near what the startups had estimated.
So, with these lessons as our precautions, let’s now look at how to set up an online grocery store and work efficiently to make big profits.
What you need to prepare
- Plans and strategies for your online grocery business
This is the establishment phase of your business. This phase needs most of your time because this is where you plan your entire business model and its operational details. You also need to consider all the factors involved in supplying food items, such as longevity, perishability, sustainability and much more.
- Analyze your competitors
There is always something to learn from your peers and counterparts. Since many have already set foot in this field, you can study their methods, tactics, etc. You can perform 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 difficult task, since the market is already established and popular grocery stores. So, you will need to research and plan so that you can stand out from the rest.
- Partner with reliable grocery suppliers
Since you are just starting your business, it is better to start with fewer geographical locations. Do a broad research and analysis and zero in on the best available partners.
The main supply partners needed for online grocery stores are:
- Supply partners
- Wholesalers and
- Grocery stores
- Develop your application
Once you are sure of all the documentation you need to build your online grocery store, it is time to bring the application to life. There are three main ways you can build your application.
Build it from scratch:
- On your own or
- Hire a skilled technical team
- Use a SaaS platform
- Purchase an Instacart Clone Script
Choose the most appropriate method based on your ability to invest. You will certainly have a budget, a time frame and a plan in your mind. Assess which one best fits these three conditions and go with it.
How can you monetize your online grocery store?
- Monetizing on a commission basis
For every order your partners receive, you can set a certain percentage as your commission. This model of monetization will also help accelerate your growth.
- Subscription-based monetization
This is a model where you charge your customers with a fixed, periodic subscription. To make this plan more attractive to your customers, you can also add some discount coupons, or free delivery access for a few orders, and many such innovative offers.
- The hybrid solution
The best of both worlds. You can charge your partners with the commission and your customers with a subscription fee. This is the model most successful online grocers use. Launching your application is the last and most important step. You will need to include eye-catching offers to draw in the crowds.
How do you use digital marketing for your online supermarket?
In the current pandemic situation, this service is in high demand. Make sure you use this opportunity wisely and optimally and make yourself a niche in the eCommerce business world. To help you with digital marketing, here are some tips.
- Select your target audience
This is one of the crucial parts of growing your business. Knowing who your product is perfect for is a crucial part. Researching and getting to know their lifestyle, demographics and interests will help you design and develop your marketing plan that targets those areas. This will ensure good content marketing strategies, open up strong communication channels and ensure better representation 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 you use this platform in the right way, you can also use it to drive traffic to your online supermarket website. Some of the most widely used social media platforms are – Facebook, Instagram and Twitter.
- Influencer marketing
In today’s age, people are more concerned with researching a product through reviews, ratings and gaining insight through other people’s experiences. Influencing on social media is a great way to create a digital marketing strategy. Having an influencer talk about or demonstrate your application website is sure to capture the attention of his or her followers, helping to convert those viewers into potential customers.
- Email Marketing
This is a great way to reach a particular niche of the audience. Email marketing is one of the best strategies to get user engagement on your website. The catch is, the right content. If the content is not appropriate or not eye-catching and accurate, chances are you will be categorized as spam.
- SEO Optimization
Google is the most browsed search engine.
Here is when SEO (Search Engine Optimization) comes into play. Proper keyword usage, good content, developing a creative yet efficient website design and faster loading speed play a pivotal role. This will help to get the required ranking on your search engine and thus attract the attention of the public. This in turn will increase traffic to your website.