The Coronavirus Pandemic, social distancing and lockdown have changed the way people used to shop for their grocery. Technology-based methods like on-demand app development have replaced traditional means of purchasing groceries. All of this results from technological advancement and changes in consumer preferences.
Earlier, some consumers opposed online grocery shopping to avoid transportation costs. Another reason was that they wanted to check the quality of the products at the time of purchase. But the impact of the coronavirus on the grocery industry was so great that the demand for online groceries skyrocketed.
If you are an entrepreneur planning to launch an online grocery business, it is important to understand the industry in depth.
Facts related to popularity of online grocery
In previous years, some consumers opted for online shopping to avoid shipping costs. However, COVID-19 has encouraged people to change their primary shopping preferences. The outbreak has boosted the online grocery industry. Demand for this specialty has grown significantly as a result of recent corporate scandals.
Keep the following facts in mind when planning your grocery delivery app development:
- Food and beverage revenue (including Internet purchases) in the U.S. increased from 18.2% to $ 18.89B in 2019.
- Online food sales in China and Japan have increased to $ 50.9 billion and $ 31.9 billion, making these regions wider domain markets.
- By 2021, at least 50% of online shoppers in the Netherlands, the U.K. and France will be able to purchase permeable items online at least once a week;
- The biggest food supply providers in Europe are Amazon and Alibaba: 31 percent of U.S. participants admitted they bought food and beverages through the Amazon app.
- Experts expect Walmart to become a strong industry leader for door-to-door delivery and head over to Amazon soon;
- The target population for online grocery customers is Millennium, and more than half of these providers also use it;
- 15% of respondents are expected to use the click-and-pick service, while 85% prefer to place their order at home.
Business models to launch online grocery
In this epidemic, people are looking for simple, non-contact daily necessities. Because it is convenient, time-saving, money-saving and you can easily shop for others, people are leaning towards the economy on demand. But you might be wondering how to start a grocery delivery business? Here are a few businesses model that help you to launch your online grocery business.
- Hyper-local model
Hyperlocal architecture is the most current buzzword in e-commerce. The success of hyper-local e-commerce websites has taken on a whole new dimension, resulting in grocery delivery, grocery ordering, home shopping, personal care services and more.
As the name suggests, a hyper-local marketplace is a competition that caters to a small area of demand. Walking around your home will undoubtedly take you to a comparable store, albeit a large and limited but self-sufficient one that caters to almost all residents’ needs.
With the emergence and development of hyperlocal networks, local offline stores and service providers have been given new leases for their companies. Though the idea is unique, the world is no longer fresh because of the proliferation of the Internet. It can raise the company of offline retailers to completely new expectations.
USP of hyper-local e-commerce companies wants to sell products and services surprisingly fast. The hyperlocal distribution model promises customers that the goods they buy will be picked up within an hour. If it’s a restaurant meal you wouldn’t otherwise have a home supply or order the food you want in a limited time, then Hyperlocal Credit comes in handy.
- Online grocery model
One of the most popular ways for companies to earn money with on-demand grocery delivery solutions working model is by selling their merchandise online.
First, you establish your brand and your rights online. Later, your branded items and reusable containers, cans, bottles, kitchen appliances etc., can be sold separately on your website, which will earn you money directly.
- Commission
Charging sellers/store fees for every sale they make from your website is another way to monetize your business. Depending on different factors like market and supply chain, you may charge different commission prices for other commodities and regions.
- Membership
Enables customers to pay for such items without having to order each time for daily delivery. Items purchased by customers daily will fit into this model. A regular supply of milk, a weekly supply of fruits, a monthly supply of fitness equipment, etc.
- Service tax
They may charge extra fees from stores/partners who do not subscribe to your membership for every sale they make. To avoid membership fees, they must be included in the membership package.
- Click and Collect Business Model
Click and Collect Business Model is also known as BOPIS (Buy Online, Pick-up in-Store). BOPIS (Buy Online, Pick-up in-Store) helps grocery customers facilitate online and offline purchases in the grocery retail industry.
This business model is a perfect combination of online and offline shopping experiences. Research conducted by Post and Parcel shows that by 2025, about 10% of sales will be by adopting a click and collect retail strategy.
This is the main form of contactless delivery that is prevalent nowadays due to epidemics. It enables buyers to order groceries online and order from nearby grocery stores. However, there is always the option of delivering the order home.
- Inventory Model
In an inventory-based business model, the owner oversees inventory purchases and accumulates inventory. The owner buys products from various organizations and maintains the warehouse itself. And they are responsible for managing inventory, communicating with consumers, and ensuring timely delivery of products.
Such models are commonly used for single-product stores. One such example is the supply of milk and vegetables. Businesses that adopt the inventory model monitor the compatibility of manufactured products. In addition, when companies manage the supply chain entirely through direct procurement, they have higher profit margins.
This model shows great value as it requires warehouse building, administration, and transportation. Based on the initial investment, the inventory model in the e-grocery market seems more optimistic.
- Multi-Vendor Marketplace Model
In this model, different sellers and buyers come together to trade through the on-demand grocery delivery app. It is also known as the Zero Inventory Model as it does not have inventory management responsibility.
As far as packaging and delivery are concerned, either the seller will take care of the logistics himself, or the owner will handle the dispatch. Ecommerce players charge a certain percentage of total sales as a commission.
Its success in the marketplace and its role in maximizing conversions make this business model invaluable to online or on-demand delivery solutions.
Conclusion
Starting an on-demand grocery app development requires in-depth knowledge of every aspect of the grocery industry. As an entrepreneur, make sure you choose a business model that best suits your business needs.