Online grocery delivery business apps like Instacart, Fresh Direct & Peapod facilitate the process of buying fresh groceries and making deliveries within a couple of hours. Within a few years, this business idea has gained much popularity, which is resulting in the massive success of different online grocery delivery marketplaces.
This grocery delivery business model is impressive enough to motivate budding entrepreneurs across the globe to start their own online grocery delivery ventures targeting a regional market. Realizing the growing demand of grocery delivery websites like Instacart & Fresh Direct, business analysts at FATbit Technologies initiated a detailed analysis of their revenue model and website features to help entrepreneurs start similar online ventures.
Let’s first discuss the business model of online grocery delivery platforms and learn how they make money.
An efficient business model involves multiple costs such as startup costs, manpower costs, operational costs, and overhead expenses. To cope up with these, you need huge returns on investment, which requires properly strategizing your business operations. When creating your business model, you need to consider three major aspects, including:
Make sure your business provides value to customers in terms of an efficient distribution system via retail, advanced features, and more benefits along with reduced prices. Partner with other companies who are willing to serve customers, outsource services, and make the most of the internet. A combination of these provides an edge over the competition.
Though you may be investing in overseas manufacturing to outdo your competitors, leaving a significant margin is important. Focus on building enhanced versions of existing products to be able to leave the required margin.
Some of the best tips to gain a notable margin are providing less sales support, choosing top-notch manufacturing processes, selecting an effective distribution channel, and discovering multiple revenue streams without multiplying your costs.
Define your target audience in a way that they are easy to reach out to, ready to try your product at a minimal marketing cost, help you meet your sales objectives, and don’t mind paying a little higher price for the added benefits.
This unique business model has a huge scope for generating big profits.
By 2022, online grocery sales will likely amount to a whopping $133.8 billion.
But in order to ensure that, you have to pay attention to the implementation of two things:
The partnership with top local grocery stores will play a crucial role in establishing such a business since you won’t be maintaining an inventory of grocery items yourself. A minimum 2-3 tie ups per neighborhood can help you run your grocery delivery website quite easily.
You would also need to establish a robust delivery system that is efficient enough to make the delivery within a couple of hours of the order.
As for how a grocery delivery business becomes profitable, there can be many revenue channels. But first, you need to decide on which one of the following will be your primary revenue medium:
First revenue models from the above two have a greater success prospect for the sole reason that customers are not charged extra. As a matter of fact, all major online grocery delivery platforms follow the same revenue model.
Apart from that, other revenue channels include:
Not only these additional revenue channels will bring in more money but it will also make your grocery delivery website more valuable to customers.
Your online grocery delivery website & app should have a neat & clean interface that allows customers to understand your platform easily and begin with the order right away. Here are some essential homepage implementations that you should pay attention to:
The sign-up process should be integrated with the zip code/city name input text field. As users enter this detail and click to move forward, the website should ask them their name, email address, and password to create an account and start online grocery shopping.
In addition to that, there should be a sign-in button in the top navigation bar and important quick links in the footer area.
Note that in case the service is not yet available in a user’s location, he should be notified about it as soon as he enters the zip code/city name. To make things even better, the non-availability message should appear with an option through which the user can get notified when the service will be available in his area. Implementing such a feature will improve the user experience of your website considerably.
This is the feature on which your business relies upon, therefore, it is important that you implement it mindfully and carefully. Any flaws in this part of the clone script can lead to dissatisfaction among the users of your website. Here are the features to confirm in the shopping functionality:
Search by Department
You need to make special department categories within each store to list products. Most popular products should be listed in the front for the ease of buyers. Every store will have different department categories based on its products. All department categories could be further divided into subcategories. Department categories and subcategories should be neatly placed as a drop-down menu.
Search a Product
Remember to provide a search bar at the top of the product listing page. The product search should produce results, not from within the selected store, but from all the stores in the neighborhood. depending on the searched product category, there should also be relevant filters on the search result page.
Add Product as Favorites
To make things interesting, you can also offer an option that allows users to add products to their favorite list. This feature should also come with options to organize the favorited items into different categories.
Share Shopping Cart with Friends
This feature will make things yet more interesting. Let users create a shopping cart and share it with friends. The feature will also allow friends to add products in the cart. This is a must-have feature for every online grocery delivery portal; different members of a family can add their own items in a common shopping list.
Apart from the main features listed above, you should also include some other unique features which have led to the success of this grocery shopping portal. These features have been listed below:
The store page can have a section that recommends various recipes for dinners, desserts, breakfasts, snacks, salad, and party on the basis of food items previously bought. Following options must also be provided with the recipe section:
The checkout functionality should be intuitive and seamless as it has a direct impact on your conversion rate. Following options should be considered while designing the checkout page:
To deliver customers a rich buying procedure, you need to implement the following features and options in the user profile area:
As an online grocery delivery platform, you can hire personal shoppers who are responsible for collecting the ordered items and delivering them to buyers. A lot of youngsters are working as freelance shoppers for all existing major grocery delivery platforms to fill up their free time. Such a feature will be a welcome addition to your online grocery delivery clone platform, but it would require offline access to manage freelance shoppers. Key features of this section include:
So these were the basic clone script features for your online grocery delivery platform. Now, let’s discuss a few value added features that will make your online grocery marketplace more advanced.
Businesses love to delight their customers with sales and new offers. Your online grocery delivery platform should also smartly employ this marketing technique. Here is a list of suggestions regarding which promotional offers you provide through your grocery delivery website:
A website cannot do without a well-managed Help/FAQ section especially if it deals with online transactions. Since your grocery delivery platform will be serving 2 type of users – customers and stores, there should be separate categories for them in the Help section. Also, make sure that the FAQ/Help section is easily accessible. Additionally, allow users to ask new questions.
Technology has allowed grocery businesses to evolve and let people shop through mobile apps too. Almost 43% of shoppers now prefer using apps over physical grocery shops for buying grocery items. And the reasons behind this are pretty good:
Therefore, you need to have a grocery delivery app for all major mobile platforms to allow your customers to do the grocery shopping on the go. Make sure your online grocery delivery app has all the features with rich functionality present on the website.
Current market figures state that the online grocery delivery marketplaces are growing at a lightning pace. While their reach is certainly touching new markets with every passing day, lots of potential investors too are showing their keen interest in them.
So, it won’t be wrong to say that this is the best time to start an online grocery delivery website for your own area. However, it is essential that your business is built by implementing all the advanced script features we have discussed in this post. Additionally, the execution of these features is equally important. Therefore, it is crucial that you pay equal heed while hiring the web development professionals for building your online grocery delivery platform.
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.