Not too long ago, grocery stores were the ideal definition of a local business. Each store would serve its surrounding neighborhood and, unless it was part of a national chain, would have only a couple of other outlets, if they had any at all. The rise of grocery ecommerce changed the dynamics of the industry.
Thanks to the power of the internet and advancing software, grocery stores can now easily develop and execute growth strategies. With all these tools that store owners have at their disposal today, it has become much simpler to build a scalable online grocery business.
This article will cover the key elements you must consider as you grow your grocery ecommerce operations. Read on and find ways to run a successful and scalable online grocery business!
Online grocery: the best channel to grow your business
Grocery shopping was an in-person activity for most consumers for decades. The global pandemic in 2020 was the shake-up that led to a change in the way people shopped in general and bought groceries in particular.
Due to public safety restrictions leading to brick-and-mortar stores closing, consumers had to purchase daily necessities through ecommerce. Doing so led them to discover a much more convenient experience.
This change in customer shopping behavior has made online grocery a promising market for growth. A report from McKinsey stated that consumer preference for online grocery is set to persist even after the spike in users during the pandemic. From 2024 to 2028, the grocery delivery market is expected to experience an annual growth rate of 12.74%.
This bright future means that grocery store owners can ride the wave of the upcoming growth period in the industry.
To get the maximum benefits of a thriving market, you must have a scalable online grocery business that can keep up with the dynamic market forces of ecommerce.
How to build a scalable online grocery business
Ecommerce has allowed grocery retailers to tap into new markets and explore new sales channels. However, acquiring new customers won’t benefit you for long if your business is unable to retain their loyalty.
A scalable online grocery business is equipped to handle new ecommerce customers even as their order volume increases, allowing the store to experience sustained growth. Here are four important considerations for any store owner looking to introduce scalability in their online grocery store.
1. Infrastructure Planning
In the pursuit of digital transformation, grocery retailers may overlook their online store’s infrastructure. Building an online store designed to serve the needs of your existing customers but failing to account for customers in the future can prevent your business from growing.
Invest in scalable hosting solutions and web services to equip your store for the future. This means that when traffic to your store increases, all of your internal processes can easily keep up with hundreds or even thousands of new customers.
To ensure your infrastructure is up to the task, you must study user demand and usage patterns to create a smooth-functioning technology stack.
Online grocery infrastructure also encompasses the physical resources needed for streamlined inventory management, logistics, and delivery. It is important to strategize where products will come from and how to get them to customers as quickly as possible.
This can involve brick-and-mortar stores (if applicable), warehouses, dark hubs, third-party logistics, etc.
2. Technology integration
The ecommerce platform you choose will serve as the foundation of your tech stack. The best platform and integrations will positively affect both customer experience and employee experience. That’s why it’s so important to ensure that your choice is both flexible and scalable.
A scalable online grocery business’ ecommerce platform starts as a minimum viable product (MVP), which has basic features. However, the platform should also be able to support new features, third-party applications, and application programming interfaces (APIs) as the business grows and expands its operations.
Before deciding which ecommerce platform for your store, compare the number of integrations and APIs supported by each potential solution.
3. Supply chain management
The importance of resilient supply chains was another lesson from the global pandemic. Stores that rely on inventory from a single supplier are more likely to experience shortages and stock-outs, which will drag down sales.
Furthermore, inventory management at grocery stores is another complication. Some items, like canned goods, might have a long shelf-life, while others are highly perishable, like fresh produce.
Grocery retailers need to find ways to optimize their supply chain and logistics systems. Partnering with reliable suppliers and vendors will ensure that your store’s in-demand products are always available to consumers. Using tools like AI-powered inventory management software will also reduce wastage and item spoilage, resulting in higher profit margins.
4. Growth strategies
A scalable online grocery business is built through steady growth, strategic management, and clear foresight. Any gains your store makes through scalable methods will be more permanent and have a better long-term impact on your business than short-term measures.
Data analytics can help you discover valuable opportunities for scalable growth strategies for online grocery. Store data—which includes customer profiles, sales figures, and other vital metrics—can yield insights that lead to improved performance.
By scanning product sales, you can diversify your offerings to better match customer preferences. Personalized product recommendations based on users’ purchase history also help increase the average order value (AOV), letting you scale up your store even within your existing customer base.
Conclusion
Scalable online grocery businesses are in the best position to take advantage of the growing e-grocery market. To achieve scalability, online grocery retailers need to devote resources to the following areas:
- IT & physical infrastructure
- Technology integrations
- Supply chain management
- Growth strategies
With these bases covered, you will be well on your way to running a scalable online grocery business that is future-proof and ready to serve a growing customer base.
