Online grocery businesses are booming and becoming increasingly ubiquitous. Particularly since the pandemic, the public need, want and expectation of being able to order groceries for delivery has soared.
According to a study by Statista, the online grocery market is constantly growing, and sales are expected to reach 187.7 billion US dollars by 2024.
With opportunities abundant, there are an increasing number of startups, organisations and entrepreneurs entering the online grocery business space.
However, as with any type of business, there are numerous challenges. This is especially true because it's still a new industry that requires both traditional business practices and modern, online-based methodologies to run.
In this article, we’ll discuss five everyday online grocery business challenges and provide solutions.
1. Insufficient inventory management
An online grocery business only works if it has sufficient inventory management. Without this, the user experience of your customers will be lacklustre.
That’s because customers expect sufficient stock of the groceries they regularly buy. With competition fiercer than ever, inventory management must be fast and effective with high-quality control.
The absence of advanced technology powerful enough to automate business operations is a common issue. Online grocery businesses must have the right technology to simplify, streamline and smooth each aspect of business functioning.
This is important because there are many moving parts and the more efficient your inventory management, the more effective your business. Therefore, for your online grocery business to succeed, you need a high-quality, highly functional inventory management system.
When setting up your inventory management system, know there’s no one-size-fits-all solution. Instead, think about the essential components your business needs. Consider components such as your delivery system and mobile apps.
2. Maintaining quality shopping experience
The quality of your groceries is the essential ingredient to the success of your online grocery business. Without consistent, high-quality produce and products, your customers will quickly jump ship and hop aboard the platforms of your competitors.
Customers want a personalized approach. For example, most customers are used to being able to order a precise amount of produce. This could look like needing exactly 300g of grated cheese or 210g of ham. This is what customers are used to and expect to be able to replicate online.
Most ecommerce platforms don’t offer this level of specificity — but Wave Grocery does. With Wave Grocery’s intelligent storefront, customers get the physical store experience online by ordering precisely what and how much they want.
3. Changing customer behaviours and preferences
Since the online grocery business market is still relatively new, it’s in constant flux and constantly evolving. To succeed in this increasingly competitive market, a sound strategy is required. And part of this strategy is keeping track of changing customer behaviours and preferences.
By using the right software, you can track your customer behaviours and preferences through detailed reports and analytics. These will help you better understand your customers so that you can deliver the right products at the right times with the best possible service.
But, even better, you can steer your customers’ choices by offering them incentives to buy the products you want to sell most.
For example, you could use an email newsletter to promote products at certain times of the year. You could also use discount coupon codes and specialized campaigns targeted at specific demographics.
Ultimately, keeping track and staying on top of your customers’ changing behaviours and preferences is vital for your online grocery business’s success.
4. Customer loyalty
One of the most defining factors of a thriving, long-term business is customer loyalty. Brand loyalty, a term thrown about often, isn’t just for fashion brands — it’s for online grocery businesses, too.
Customer loyalty is earned, and it’s earned by delivering exceptional service again and again. But it’s more than that. It’s also about brands and businesses going above and beyond for their customers.
As your business grows, it’s inevitable that many customers will jump ship. Your job is to retain as many of your customers for as long as possible.
This is a challenge for any business. As a business, you must make sure you do everything you can to earn your customers’ loyalty. Deliver exceptional quality every time.
Deliver their groceries using top-notch drivers. Provide your customers with complete transparency about their products and your service.
Constantly offer different loyalty programs or reward them for choosing you for their everyday essentials to entice your entire customer demographic. All of these are some great ways to increase your customer loyalty.
5. Low-quality delivery
Along with the quality of your product, your delivery is the cornerstone of your business. Without stellar delivery, your online grocery business cannot survive.
After all, having products delivered rather than them having to be physically picked by your customers is the fundamental principle for which they’re using your service in the first place.
Customers expect product accuracy delivered on-time, every time. However, the reality is that delivery businesses of any kind are subject to transportation issues, amongst others.
Expect getting the delivery process right to be a challenge that requires trial and error to perfect. The best practice here involves prioritising the highest quality delivery service you can afford from the beginning.
Use the best software and tracking systems. Use the best delivery drivers. Streamline the process as much as possible. Then rinse and repeat until your delivery process is as efficient as possible for your customers. Your online grocery business will benefit.
Conclusion
We’ve covered five of the most common challenges for online grocery businesses. As a new but booming business venture, some if not all of these challenges are likely to come up. However, they need not impede your success.
Being aware of the challenges, knowing their implications and preparing to use the best course of action will prove pivotal in your online grocery business’s success.
Using the tips and best practices we’ve offered, you’ll increase your chances of overcoming these challenges.
