Launch Your Online Grocery Store – Business & Revenue Model, Features, and Key Players

Launch Your Online Grocery Store – Business & Revenue Model, Features, and Key Players


Visiting supermarkets for your monthly groceries means long checkout lines and exhausting search for your favourite products. Visiting your neighbourhood store, on the other hand, doesn’t give you variety & ease of shopping. With technology coming to the center stage, grocery websites also known as online grocery stores have solved the problems encountered by people during shopping by giving consumers access to quality products without wasting any time or energy. Users can get everything from fresh vegetables to packaged foods, and household necessities on platforms like Amazon, Instacart, Walmart, Grofers, and Peapod. The Fruit Box, El Grocer, Farm Box, Kibsons, Arabind, BulkWhiz, Good Eggs, Cornershop, and Rappi.

After an in-depth study of various grocery websites in this niche market, we have prepared this comprehensive post on the business & revenue model, key website features, and scope of improvement for entrepreneurs planning to build an online grocery store.

Business & Revenue Model of Online Grocery Store

The popularity of online grocery stores is powered by convenience and ease of shopping. Although there have been many players that attempted various models of grocery retail in the digital space and failed, only those have been successful that have adapted a lean business model relying on a convenient mix of warehousing and cash-&-carry. This business model surely reduces the startup’s dependence on capital-intensive operations and can enable it to put in place a thoroughly efficient supply chain.

Online Grocery Business Model
Suggested Read: All You Need To Know About Launching An App Like Instacart

In addition, the platform can also adopt some unique measures to take customer convenience to the next level. But before moving on to that, let’s list some key competitors to give you a better idea of the market competition.

The Top Players in the Grocery Industry

1. Amazon

Amazon introduced its own amazon fresh and amazon prime pantry to order groceries online. AmazonFresh is a digital grocery store offering fresh products, perishable items from local stores and whole food products. Whereas amazon prime pantry allows you to shop for single-serving pantry staples and household supplies. 

2. FreshDirect

  is also an online grocery platform that delivers groceries to your doorstep and offers next day delivery. Currently, FreshDirect is operating in New York City. FreshDirect offers a lot of discounts to its customers to encourage them to buy through their website.

3. ShopFoodEx

They sell online grocery throughout the United States and to APO/FPO addresses since 2001. The company aims at making it easy for customers to order groceries online.

4. WholeFoods Market

Is a subsidiary of Amazon and operates in the United States, Canda, and the United Kingdom. It offers online grocery to its customers with its quality standards set by them. The focus of this business is on minimally processed foods that contain hydrogenated fats, artificial flavors, colors, sweeteners, which are listed under the “Unacceptable Food Ingredients” section.

5. Peapod

Peapod is the oldest and the most popular online grocery service in the marketplace operating in 24 U.S. urban markets. It offers fresh quality products, priced fairly and delivered with reliable service. The customer can order groceries by using the peapod app which can be easily downloaded from the Google Play store.

6. Instacart

Instacart offers grocery delivery and pickup services across the United States and Canada. It has partnerships with over 350 retailers (including Kroger, Loblaw, Target Corporation, etc), that have around 25,000 grocery stores. Instacart lets you shop from grocery stores listed on its website or app, then sends a personal shopper who picks, packs, and delivers the order to you.

7. Shipt

Founded in 2012 and owned by Target Corporation, Shipt is known for its same-day delivery services. Initially, the company targeted regions that had no grocery delivery services before expanding into other demographics.

8. Walmart Grocery

It enabled shoppers to order food and other goods for pickup and delivery. According to the latest development, Walmart Grocery app is merging with Walmart’s main app and website and the new version will be rolled out in phases.

While there are many startups in the online grocery industry, it is vital to understand that most online grocery ordering websites cater to only a few geographical regions. Therefore, they won’t be your direct competitors if you plan to enter this industry.

To Know more about the online grocery business, watch the video:

Now let’s learn about some unique features that can make your website one of the most popular online grocery sites among your competitors.

Must-Have Features of an Online Grocery Store

FATbit researchers have analyzed unique website features for any online grocery website to distinguish itself from the competition. Right from the homepage to the dashboard we have carefully drafted key website features necessary to build a stellar website. Some of the features have been covered in this section.

Welcome Popup

On opening the website for the first time, users can be greeted with a popup notification which asks them to select their city. This can also allow you to only cater to people from a selected locality. additionally the popup can also show the customer care information to the user for any queries. Before going into the details, let us first go through the homepage overview.

Slider Banner Image

In order to succeed in any internet business, it is important to convey core benefits instantly to website visitors. This is where your website can hit the bull’s eye with a slider banner that shows your central message, special offers, and attractive deals.


Product discovery is an important aspect of online grocery websites and other e-commerce websites. With thousands of listed products, search becomes one of the most vital features of any online grocery platform. Besides impressive auto suggest features, your website can also have the functionality of adding products to the cart from search listing with just one click. This removes the hassle of going to the product page. This is something unique and worth adding to your grocery store website.

Time Slot

In this hyperlocal sector, delivery is a major challenge for online grocery portals. As most of your clients would be working professionals with the scarcity of time, the website can opt for predefined time slot deliveries, making it easy for both ends. Users can select their desired time slots from a drop-down popup in the top navigation bar based on their location. We believe that this feature is highly necessary for an online grocery store.

My Cart

FATbit analysts are of the opinion that shopping cart is one of the most vital yet underrated aspects of most e-commerce websites. After carefully analyzing major players in online grocery shopping, we found that most just used a dedicated page for shopping carts. This acts as a hindrance to the overall shopping experience.

As per our recommendation, you can incorporate an innovative solution using the “My Cart” feature in the top navigation bar. A click on My Cart button would bring down a section that shows all the products in the cart.

Pro tip – Partner with experienced developers to make similar additions in your online grocery store clone script.

Sign-up Page

You can also experiment with the signup process to make people register without leaving a particular page. The ‘Create Account’ form needs to be short and require only basic information like Email, Mobile number and Password. Most eCommerce websites ask for details like delivery address and related information in the very beginning. You can experiment by allowing users to add these details at a later stage. Additionally you can also provide the option to register via social networks.

Menu Bar

Just like Search, Menu bar is also an essential part of product discovery. With a long list of products and categories to choose from, you need to make the process of discovery easy. Business Analysts at FATbit recommend a more streamlined navigation menu for your online grocery store. You can put forth a nice approach by putting the main menu under various sub menus.

Want to improve the user experience of your multivendor grocery store

New Items

Any ecommerce website is in the continuous process of expanding its inventory. In order to ensure that your consumers are kept informed about new product additions, you can have a “New Items” section. It would show all the new products available for purchase.

Hot Selling Products

In order to succeed in the highly competitive market, you need to literally put the spotlight on your best assets. This can be done through the “Hot Selling Products” section which showcases the most popular products listed on your website.


The footer area can feature a brief introduction about the website and its offerings. It can also feature links to various content based pages like About Us, FAQs, How it Works, and Delivery Details. The footer can also house social media links along with privacy policy pages.

Chat support

There is no denying that you need to put special focus on creating a personal connection with customers. This can be achieved via chat feature available on all pages. This real time chat allows buyers to discuss all their queries about grocery buying from customer support.

Buying Limit on Products

After undergoing extensive market research, we recommend against an inventory-based model. In order to sustain in this market, you need to hold a very small inventory and enter in tie-ups with wholesalers and cash-and-carry partners for deliveries. On your website, you can also have a feature which limits the quantity of purchased products. There are two reasons behind this:

  • To check the shortage of products
  • To limit bulk buying

Search Filters

After selecting the grocery segment, the user can be provided with a product listing page with advanced options to filter the products according to user preference. These are:

  • Based on offers and deals
  • Brands
  • Special features
  • Price

Product Page

As already stated, you can offer the option to add any product to cart from the listing, but this does not diminish the vitality of product page that shows additional information to buyers like:

  • Description
  • Price
  • Availability of product in different sizes
  • Add to cart

The overall visual theme of your website should be to provide relevant information only.

Checkout Process

The checkout process involves four different steps:

  • Review your cart
  • Add shipping address
  • Select delivery slot
  • Choose payment mode

While reviewing the cart, users can see the final products, total payment required, and the amount saved after a discount. Shoppers can also add items from a list of previous orders.

Delivery Time Slots

Due to the timeslot features, you can put a system in place to carry out live mapping of inventory. This can result in optimal on-time delivery output. It can prove to be a huge add-on to your delivery mechanism, streamlining the whole process. You can also offer express delivery under which you can deliver products the same day.

Click and Collect / BOPIS / Self-Pickup

Click and Collect is all about a shopper making a purchase online and then collects it from the store/pickup location/warehouse.

Many grocery retailers are adopting an omnichannel strategy in the form of click and collect to enhance the user experience and streamline the supply chain. Click and collect somewhere somehow reinforces the sense of community or neighborhood feel by fulfilling the customers’ desire for an in-store shopping experience.

Progressive Web Apps (PWA)

A web application that delivers a native app-like experience to users by bringing consistency between web and native apps and replacing both with a single specimen. It can be installed on the home screen which means better user adoption. Further, it improves and SEO and boosts conversion rates.

Payment Options

You can offer various payment modes like:

  • Cash on delivery
  • Net banking
  • Credit/debit cards

Moreover, in order to create loyalty among its consumers, you can also have a feature like virtual points, which act as rewards points for purchases. This is a vital strategy for your website interested in creating brand loyalty among consumers.

My Usuals

We have put a lot of brainstorming hours trying to come up with innovative features to make each and every process of online grocery shopping a walk in the park. Under My Usual section, users can view regularly purchased items. Our team of analysts also recommends a similar “favorites” section which shows the commonly purchased items to the user.


An online grocery store needs to put a lot of emphasis on the help and support section. In order to resolve the common queries among the users, you need to provide users with FAQ section with commonly asked questions related to:

  • How to shop
  • My account
  • Delivery details
  • Cancellation & returns
  • Payments
  • Redemption
  • Referral

If you are planning to start your own online grocery store website using a readymade platform, then, make sure it has an extensive FAQ section to begin with.

How it Works

Your website should also provide users with a dedicated page that clearly states the overall process of shopping on your platform. This is helpful for first time shoppers who might find it difficult to get accustomed to online grocery shopping.

online grocery store buyer flow process

CTA (Call to action)

CTAs if planned correctly can help generate product sales and introduce visitors to other important website aspects. Read this post to learn how to create the best call to action buttons for better sales and leads.

User reviews

It is a widely accepted fact that first-time buyers pay great importance to reviews and recommendations. Having a Testimonial section will not only boost user confidence in choosing your platform but will also increase brand loyalty.

By and large, you need to make sure that consumers get to know about all your offerings right on the homepage. So, a big takeaway for entrepreneurs planning to launch an online grocery store is that it’s not just about making an appealing layout with attractive pictures, it’s also about ensuring that the overall shopping experience requires minimal steps.

Grocery Mobile App

In the current era of mobility, it has become vital for all eCommerce websites to have a mobile app alternative. This increases the reach of your platform, and makes it easier for users to shop on the go. This is why you need to invest in developing a mobile app for major platforms. In order to be future-ready, an online grocery store must have a mobile application.

According to a new forecast from eMarketer, in the coming years more than one in five adults will use a grocery app to order food at least once a month. More than 30 million adults may use an app to order groceries by 2022.

Reasons a mobile app is important for your grocery business:

Grocery apps are time-saving: On average a person takes minimum 40 mins visiting a grocery store whereas ordering the same grocery online reduces the time by an average of 15 mins. Ordering through a grocery mobile app reduces the time even more and makes it more convenient for the customers.

The facility of order tracking: You can track your order through GPS to know the status of its arrival. Some online grocery companies give liberty to the customer to set the time and date of delivery of groceries according to their convenience and availability.

Grocery apps help in managing budget: The grocery mobile apps come with some special features in which you can view your last order, compare your current order with it to check if you have ordered any unwanted item. You can also keep a track record of how much you are spending on the grocery items every month.

online grocery store business model canvas

Future prospects of online grocery ordering & delivery

Grocery delivery at door steps is the newest ecommerce business to witness steep growth all over the globe. As stated by us, you need to incorporate every possible strategy to convert first time buyers into loyal customers by focusing on design, user experience, and powerful features.

A report by Nielsen, 2018 reveals that 26% of digital consumers purchase fresh groceries online showing an increase of 15% between the years 2016 & 2018 which is contributing to overall fast-moving eCommerce growth.

While selecting a platform to get started, you also need a team that can add custom features and make upgrades as per your plans. So, invest in a solution and team that will give you long term returns by building an advanced version of an online grocery store.

It’s time to launch your own online grocery marketplace with Growcer

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.

Leave a Comment

Reload Image
Comments (4)