Top 10 Key points to keep in mind for a successful Grocery eCommerce

The COVID-19 pandemic has changed the grocery eCommerce industry. At Present, it has become an important part of the food industry. For instance, Kroger’s is one of the top 10 eCommerce companies in the US. Consumers around the world have adopted online grocery shopping during lockdowns and this will continue in the future as well. Grocers entered 2021 with an opportunity to reckon with an industry that looked completely new compared to last year.

It was not only the US that saw a sudden increase in online grocery sales, the UK has also observed a significant boost. For example, Orado Group Plc (a UK grocer) has seen a boost of 27% in their grocery eCommerce sales. France Supermarket sales rise by 34% in just one month. One thing is for sure, grocery eCommerce is here to stay for long. Customers are not buying for the sake of convenience but for the safety reasons.

Now, let us see the top 10 key challenges, lessons, and grocery eCommerce trends for merchants to keep in mind. 

This article will help you increase your long-term success in Grocery eCommerce.

    Grocery eCommerce 

Grocery stores are stocked up with a wide range of products and this gives rise to specific requirements. Food items are sold via different options like weight, piece, and their perishable nature (stored in unique conditions). This is not the only challenge. Merchants need to navigate ideal pick & pack processes, replacements, refunds, and deliveries. Each strategy has its challenges which merchants have to overcome. Now let’s see each point in detail.

1.Feasible Business Model

  • Grocery retail companies have a business model which comprises corporate, franchise, and independent stores under the same retail banner. This model is complex when it comes to starting a grocery eCommerce store with in-store picking as the local variations are there in product assortments, sales prices, and promotions. 
  • Grocery retail often provides run loyalty programs like bonus points, earn & burn, personal offers, discounts, etc. so the customers expect the same loyalty features while shopping online. Customers expect to receive suggestions on my usual, recommendations and recently purchased products which are based on historical online and in-store purchases. Categorizing the right product demand and implementing the business model will help in increasing sales. 
  • Traditional grocery retailers and pure players face low profitability because of in-store picking.
  • Research has proven that home delivery and in-store picking are the major cost drivers which offer the biggest potential for increased competence. 
  • Before you begin your online grocery store make sure you decide the delivery region. For on-time delivery, connect and deal with the online grocery model to build a strong delivery network.

2.Products

  • A grocery eCommerce store will have a wide range of products including non-food items like clothing, electronics, and DIY. Just like any industry, there are a handful of products that will generate the bulk of sales and also there are long-tail products that are rarely sold, but that make a significant contribution to profit.
  • You need an appropriate storage place for certain products until delivered to your customers. For example, dairy and beverages require storage temperatures. The recipient must be above 18 years for the validation at delivery. 
  • If you are selling fresh products, then you need to find suppliers that are close to your customers. If also add further complexity with more product attributes, expiry dates, and minimum order value. 
  • Numerous methods exist to present, buy and pick the perishable groceries. Let’s say, it is difficult to calculate the exact weight of watermelon. A difference in weight needs the card amount preauthorization to show the allowed variation. The final price will be recalculated as the delivery weight which might get complex with several orders. 
  • A range of non-food products like clothing, electronics, and DIY can also be added to the grocery store. These products can create tons of sales which can make a significant contribution to profit. 

3.Stock

  • Certain food items have limited storage life and a high turnover. The capacity of the warehouse and storage area is limited. So, it needs regular replenishment. The suppliers do not take a 100% guaranty. In-store picking customers walk around in the physical store with some products already in their shopping basket. Therefore, the IT system stock level is never completely accurate so it increases the complexity.
  • Generally, in eCommerce, the items are pick, pack and ship as soon as possible but in grocery eCommerce, the order is picked as late as possible (just before pick-up time or the time of departure for home delivery). There can be several days between an order placed and shipped. Thus, when an order is received. it is hard to know the product stock at the time of picking.

4.Storage Conditions

  • As per regulations, certain food products are to be stored in specific conditions until the delivery is made to a customer. Food products must not have any contact with household chemicals. From receiving a product at the warehouse to final delivery, Grocery stores should have complete control over the supply chain. 
  • Before route departure or pick up, it is essential to manage storage efficiency in buffer storage areas in high volume in-store eGrocery business. 
  • Grocery lockers with temperature zones having around-the-clock self-service have stricter requirements to maintain freshness until custom pick up.
  • The key challenge with storage is that certain conditions must be fulfilled during each phase (picking, packing, delivery, transit) and across product types (frozen, cool, alcohol, chemicals). 

5.Service Area

  • There are no international boundaries in eCommerce. But in eGrocery, the service area is limited to one region. You can offer your service from your immediate neighborhood to the entire city. 
  • Set up multiple service centers if you want to expand your reach. In our experience, optimize your service at the initial stage and then later expand across other localities to boost your revenue.

6.Time Slots & Delivery

  • In eCommerce, delivery can’t fit in a mailbox nor can be left alone for hours on end after delivery. Merchants need to manage the order delivery times which helps in organizing processes, balance the order load and offer high-end service to your customers.
  • When order volume is high, integration increases the efficiency and profitability for grocery eCommerce therefore, integrate your eGrocery with the best software to optimize delivery and courier administration.

7.Pick & Pack

  • Grocery items have a lot of variations which require a lot of time to pick and pack. The process of picking is both time-consuming as well as time-critical.
  • There are various factors involved in the picking process such as;
  • a) The weight of the products.
    b) Products need special treatment.
    c) Cancellation of products.
    d) Replacement products
    e) Timely communication with the customer.

8.Which product?

  • To explain this, we take the example of bananas. A merchant has bananas at different stages of ripeness. Now, let’s assume that the merchant received a large order of bananas. Which ones he would pick? In the case of regular customer expectations might differ. But given the scenario, if the same order is placed in a bulk where attendees consume them at the same time? So, as a merchant, you need a solution to anticipate their preferences.

9.Price Recalculations, Replacements, and Refunds

  • Sometimes in Grocery eCommerce, it happens that customers receive an alternative product. A customer placed an order for milk Brand A, due to unavailability they received Brand B. In a situation like this, merchants’ must consider the associated price difference. If the replacement item costs less, then you have to refund, and if it’s more then you have to adjust the amount by offering a discount to match the price paid in the initial order.

10.User Experience

  • In online shopping, customers like to see their favorite products in suggestions. This feature makes grocery eCommerce a little hard for merchants to provide a quality user experience. Customer’s expectations can be fulfilled with more intuitive navigation and rich features like favorite products. suggested products, or saved shopping list.
  • Many consumers need sub-product filtering like carbohydrate, vegan, fat, eco-friendly, sugar, etc. This filter list goes on increasing. To go by customer preferences, it is important to simplify the process of finding products.

Foodo Tech Impact on Grocery eCommerce

As a merchant, you need to consider many things in an online grocery store. First, you need to choose the right software platform and the skilled project team. There are few eCommerce solution platforms for the food and beverage industry that support fresh food items, rich product attributes, fragile items, temperature-restricted products, age-restricted items, replacement products, and weighted items. With our team of experts, you can overcome all these challenges.

For instance, our client, Surya Group, changed its business model. Foodo Tech helped the company in increasing its eCommerce capacity to match the demand.

  • Enhanced server performance to match the new online traffic and capacity to deal with the increase in average order volumes. (As compared to past few years, now 3-4 times more goods are being ordered with every single)
  • Product delivery from one week to ten days.

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