With the popularity of ecommerce today, starting a grocery store online is an aspiration for many. Since the pandemic, the way millions of people shop has changed forever.
From the largest supermarkets to the neighborhood grocery, virtually every grocery store owner has gone online, reaping the rewards. But it’s not just established grocery stores getting in on the game.
With the continuous demand for groceries to be delivered, startups, businesses, and entrepreneurs are selling groceries online and expanding. In other words, online grocery stores are becoming highly profitable businesses.
Why you should start a grocery store online
If you haven’t already, you should start a grocery store online. Why? Simply put, that’s where the demand is today.
Buying and having items delivered online was always increasing in popularity. But since the pandemic, it’s become a necessity. Increasing numbers of people now consider buying their groceries online the new norm.
According to recent statistics, 87% of consumers say that they use their mobile devices for grocery shopping online. And there are case studies and hard data to back it up.
For example, during the pandemic, Instacart, an American online grocery store success story witnessed a massive 500% jump in orders. And their numbers have since stayed consistently high.
Another great example is Kritikos, a Greek supermarket chain that, amid the Covid-19 pandemic, managed to expand rapidly to serve 17 prefectures in more than 50 cities.
Through Wave Grocery, Kritikos was able to make this expansion very quickly, which resulted in an increase in their grocery fulfilment by seven times while competitors were struggling to cover the needs of the market. On top of that, they maintained a solid 4.7-star rating on in-store apps.
You can take a look at the Kritikos' Case Study here.
Furthermore, data from eMarketer shows a consistent rise in customer demand for online groceries. According to a report from Oberlo, online grocery sales statistics predict the market will triple from 2019 to 2026, with an increase of $166 billion worldwide in just seven years.
All in all, it’s safe to say that starting a grocery store online is a safe place to hedge your bets.
5 Tips to start your grocery store online
To start an online grocery store, first identify your target market to tailor your offerings effectively. Ensure your business is properly registered to build trust and comply with legal requirements. Define your delivery areas to optimize logistics and service reach. Choose an appropriate ecommerce platform to streamline your sales process. Finally, establish an efficient delivery system, either by hiring your own drivers or partnering with delivery services, to ensure timely order fulfillment.
1. Know your target market
Knowing as much about your target market is paramount to your success in the long run. Like any business, you’re going to attract more or less particular demographics.
Therefore, knowing and understanding your market is a key market strategy to maximising your sales and profits.
For instance, you may be a grocery store that has historically targeted customers on a budget, and perhaps these customers represent a high percentage of your customer base. When taking your business online, know and continue to sell to the customers that make up your target demographic.
To do this, ensure you have the best tool available to allow you to use key insights and statistics about your clients and shopping behaviours.
Too often businesses fall into the trap of going astray or trying to change when they go online. This doesn’t mean that you can’t expand your horizons, of course.
But ensure you’re clear on the direction you’re taking. Do your research and know whether or not your strategy will work.
2. Register your business
Taking your grocery store online is a good reminder to make sure your business is registered. Depending on which country you live in, this will look different.
This is important because operating online may legally alter the definition of the type of business you conduct. Again, this is country dependent.
Furthermore, this step ensures you know your requirements for taxes and other important matters. If you’re properly registered, your customers online will trust you more.
It’s good to begin from a solid setpoint, and starting off on the right foot will increase your chances of success.
3. Decide on your delivery areas
It’s critical you know how far and in which areas you’re going to cater to. While starting your grocery store online increases your opportunity to do business with more customers, it’s highly likely that you won’t be able to deliver everywhere physically.
Therefore, understanding what areas you’ll deliver to is a vital part of a winning business strategy.
Here are some things you should consider:
- The region you’re selling in
- Labour and fuel costs
- The exact maximum distance within reach of your warehouse you can deliver to
- How much time it’ll take to deliver within your desired areas
- Delivery fees
4. Choose the right platform
Once you’re registered and know your target demographic and where you’ll deliver to, you can think about what platform you’ll use to sell your groceries.
This is a vital step in your road to online grocery store success. Ultimately, you can choose between a professional ecommerce platform or creating your own online website and store.
Creating a website can be arduous, time-consuming and costly. Consequently, most businesses starting a grocery store online will opt for a professional ecommerce platform.
Choosing a professional ecommerce platform simplifies and streamlines the entire process. There are many out there, so take your time deciding.
Ideally, you want one that works in harmony with your business and allows you to operate however you want. Luckily, there are dedicated ecommerce platforms built specifically for online grocery shopping.
5. Optimize your delivery system
With the previous four tips implemented, you can now start to optimize your delivery system. After all, delivering groceries as opposed to merely selling them as any store can is the crux of your online venture.
You have two main delivery methods:
- Create a delivery system using a team of your own. You can do this by hiring multiple delivery drivers and purchasing the vehicles yourself.
- Partner with delivery services and integrate them into your e-store for a smoother operation. They will pick up the products from your warehouse and deliver them to your customers.
While the first option benefits you by providing you with more control, there is a significant downside.
The downside is that it’ll cost you a lot of time and money upfront. Particularly if you’re a new ecommerce grocery business, this could take a lot of your resources.
If you choose this path, ensure you’re equipped with a tool that’ll make the process as timely and cost-effective as possible.
However, the second option can be implemented more quickly and takes minimum effort on your part.
Luckily, there are many professional delivery services out there that charge minimum fees and are experts in what they do. They’ll deliver your products to your customers in the fastest and most efficient manner possible.
Conclusion
We’ve discussed the foundations that highly successful online grocery stores possess. We’ve also detailed principles and best practices so that you, too, can begin a profitable online grocery store.
Understanding and implementing our 5 top tips and combining them with our best practices on how to start a grocery store online will help set you up for success.
