Building an Online Grocery Business is the Need of the Hour

Glory Simmons

16 Feb 2023 on Business · 9 min read

online grocery business

9 min read

Venturing into the online grocery business is the most appropriate step that any aspiring entrepreneur can take today. Online grocery stores are becoming the most lucrative business as they have guaranteed high returns and better conversions.

By recognizing its popularity, many leading eCommerce giants like Amazon, and Google have stepped into the online grocery business. This determines how strong is the future of online grocery businesses.

Is online grocery business profitable?

This is a million-dollar question that comes into the minds of every entrepreneur who wants to step into the online grocery business. To get an answer to this question, you need to first understand the market demand and how popular is online grocery business in the global market.

In the US, the digital grocery market value was $23 billion in 2018 and it is expected to reach $59 billion in 2023.

  • By 2023, almost 65% of grocery sales would be done online, ordered by smartphones.
  • Covid-19 has increased the number of online grocery shoppers by 42%.
  • 22% of consumers order groceries online every once a week.
  • Millennials are the most online grocery shoppers.
  • 78% of online grocery shoppers prefer home and work deliveries as their most preferred delivery method.
online grocery business

Things to consider before building an online grocery business

All positive stats would have made your mind to start an online grocery business. Certain prerequisites are to be taken into consideration for the better functioning of the grocery platform.

choose the best grocery website platform

You need to select an appropriate grocery eCommerce platform that is robust, multifaceted, flexible, and scalable. Your customers will first visit your grocery eCommerce platform as an audience and then they will get converted to customers. If this has to happen, then your platform should be an attractive and customer-engaging one.

Confirm your areas of operation

This mainly deals with the location your grocery eCommerce store will be focusing. You need to plan your area and while planning you need to check with consumers’ preferences and should build your online grocery business to meet all their pain points. It is very essential to narrow down your location so that you can serve better.

Plan your delivery model

A strong delivery model is always crucial to keep your delivery expense in control. You need to optimize your delivery partners and should frame a proper commission channel that will benefit both your online grocery business and your delivery partners. Integrate a proper tracking system with your grocery eCommerce store that will find the best route to reach customers’ destinations.

Identify your Unique Selling Point

This is very crucial for your online grocery business as you need to face fierce market competition. An effective USP can focus on your user-friendly interface, offers and discounts, free home deliveries, gift coupons on large purchases, or even special offers for regular customers.

Marketing and Promotion

A strong marketing strategy is very important for any online grocery business to survive in this market. Without a proper marketing plan, there is no point in investing in your grocery business. You need to reach your potential audience with an attractive marketing strategy and you may need to include all social platforms to create better brand awareness.

Focus on multiple payment options

78% of online grocery shoppers prefer online grocery platforms mainly because of the payment convenience. They always want the platform to provide multiple options to pay for and buy the grocery product. Your grocery website should be integrated with multiple payment gateways that will let customers choose their convenient payment mode.

Go for a Scalable grocery platform

Online grocery business will keep expanding once your brands get enough awareness among your audience. Once you start receiving orders then you may need more plugins to have seamless business operations. Your customer base also keeps expanding and to maintain all data you need to have a scalable grocery business solution.

online grocery business

Integrate with Social media networks

Never underestimate the power of social media as 94% of your target audiences are actively present on any of the social networks. Your online grocery platform should be integrated with all social channels that will let customers share their purchased products on their social pages and get their friends’ attention.

Mobile Optimization

As we already discussed the fact that 65% of online grocery purchases are made through smartphones. So, it is very clear that mobile optimization is very crucial for your online grocery business. Make sure that your grocery eCommerce platform has a mobile-responsive design that will enhance user experience while accessing your grocery website.

Always have an SEO touch

All content added to your platform should compliant with SEO requirements. Brands that are listed at the top of SERP (search engine ranking pages) will get better conversions. This is possible only if you pay attention to the SEO feature. Work on your product descriptions, all-tags, images, and image descriptions and make them SEO-friendly.

Revenue channels of online grocery marketplace

Choosing the revenue model determines your profit margins. There are several revenue models and you can either select any one or even can have multiple revenue models in a single grocery eCommerce store.

Commission-fee revenue model

This is the most common revenue model that benefits both the admin of the platform and vendors who are registered with the grocery eCommerce platform. On every grocery purchase made through the grocery platform, the vendor needs to pay a commission on the order value.

The commission slab is framed by the admin who will get the vendors’ consent to proceed with the model. Vendors find this model to be a fair one as they will need to pay to the platform only when they get business.

Membership/subscription fee model

With this model, you can set up multiple subscription plans and make your customers subscribe and get grocery service for the subscribed period. This is one of the good sources of revenue that will assure your online grocery business gets recurring incoming.

You can attract your customers to become a member of your grocery business by announcing several additional features like free delivery, next-day delivery, and many more. This will increase your subscribers as they are going to be benefited.

Service charges

You can charge your customers for each purchase they make with your platform. Whenever they buy any grocery item, a service charge will be added to their invoice and they need to pay at the time of checkout.

This is also an excellent tool to urge your customers to become a member of your platform or to subscribe to a plan. If they become members or subscribers they should be waived for all service charges.

Product listing fee

This will benefit vendors as you can allow them to list their products in all searches. To make them visible to buyers, they need to pay the platform a listing fee. The platform cannot guarantee vendor about conversion but they can list their product on the top of the search pages.

Third-party advertisements

Your platform can have third-party advertisement banners and you can charge the advertisers to pay you for allowing their banners on your website. This will their brand visibility so many advertisers show interest in posting banners on the online grocery platform.

How to start an online grocery business?

This is the final and most crucial decision you have made. Now it is time to learn to build your online grocery business in an effective way that will get you good returns. We are here to guide you with step-by-step procedures.

1. Register your business – You can build your online grocery business either as a sole proprietorship or partnership. Get in contact with any tax consultant and get the permitted licenses that are essential to run your business.

2. Identify your target audience – You need to do more research about your target audience. You need to know their food preferences, household members’ counts, and many more to frame your business.

3. Build your grocery Ecommerce store – You can either build your platform from scratch or you can go for a readymade solution that is easier to get launched and also affordable for any start-up. Before launching make sure you go through the trial version and confirm with all customer-centric features.

4. Integrate the right revenue channel – We have already listed out all common revenue models that are available for a grocery eCommerce store. You can utilize any of the models or multiple models with your online grocery business.

5. Launch the grocery platform – It is time to go live and you need to get help from any hosting service provider and should get a proper hosting plan that will let your grocery eCommerce store deploy. Once you launch you are available to your audience.

6. Promote your online grocery business – People need to know about your grocery platform first. So you need to promote your platform in multiple digital marketing channels like SEO, Social media marketing, content marketing, email marketing, and many more. Once people get to know your brand, you will start receiving visitors.

online grocery business

Get support from an expert

You may be new to online business. In this case, you cannot work on your own and succeed in your grocery business. You ultimately need to partner with a software development company like Appkodes, you can give an excellent product that will suit your business demands.

Appkodes team can build a grocery app like Instacart and can make you stay ahead of your competitor and rule the grocery market. We have a commendable market experience of more than a decade and can offer numerous online grocery business ideas. You can trust our service and get the best online grocery business.

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Glory is a creative content writer whose writing has a deep connection with users and can provide SEO-friendly tech-driven content. Being a freelance content writer, all her writings meet the demands of any online business, solopreneur, start-up, and brand.