Online grocery stores were a big hit during the lockdown and entrepreneurs made millions delivering produce, pantry, meat, and dairy products. Previously, most of us relied on neighborhood stores and supermarkets to get our grocery shopping done but the fear of crowds and convenience of online shopping is making us change age-old habits. And this is a business opportunity for opportunistic e-commerce entrepreneurs.
In this blog, Techosquare will discuss everything you need to know about starting an online grocery business and also touch upon ecommerce website development cost. Let’s first learn how the online grocery shopping industry changed after the lockdown:
Over the past couple of years, the online grocery has seen a humongous jump. As per the report from Supermarket News, 23.1% of consumers said they had purchased groceries online in 2018, and 25.8% claimed to do the same in the upcoming year. Surprisingly, those figures climbed to 36.8% for actual online purchasers and 39.5% for expected online grocery shoppers in 2019.
However, in 2020, those numbers jumped to 52% for actual grocery purchasers and 62.5% for online grocery buyers because of the pandemic. Over 43% of respondents said they were extremely likely to continue buying edibles online.
What’s more surprising about these figures is that 30% of those who have bought no groceries online during the past month reported they are likely to do so via delivery and pickup service in the upcoming months if the vaccine didn’t come through or cases continue to rise.
Analysts believe that even if we find a vaccine and COVID disappears from the face of this earth, the online grocery industry will continue to grow.
From the above figures, one thing is clear: the pandemic has given a major boost to online grocery startups. The amalgamation of the shoppers’ interest in warding off public places, government orders to stay home, and the continued need for groceries and other eatables have made online grocery business indispensable, especially in countries like the United States, United Kingdom, and Canada. Let’s look at the data and figures country wise:
USA online grocery business : As per the report by CNN Business, only 4% of grocery sales in the United States were made back in 2019. However, with a great consumer shift to online shopping, the sales numbers of e-commerce grocery stores today are growing exponentially and stand to surge about 40% by the end of 2020.
The number of businesses in the online grocery sales industry is also expected to grow by 36% in 2020.
UK online grocery business : The number of consumers in the United Kingdom who do weekly grocery shopping online has also doubled since the pandemic. Around 60% of people claim that they shop online more now than they did before the outbreak. This has caused more offline business owners to start their own online grocery stores.
A report from IBIS World states that the market size of online grocery retailers has reached £20bn with around 2,326 active businesses including Tesco, Ocado Retail, and Sainsbury’s Supermarkets.
Canada online grocery business : Canada is nowhere lagging when it comes to buying online groceries. The pandemic has provided good reasons for Canadians to switch their grocery shopping habits with around 25% citing coronavirus risks, says a Statista report.
What’s more fascinating is that 10% of seniors with age around 65 are also showing interest in purchasing eatables online.
Learn how COVID-19 will change online shopping
in the upcoming years.
Even if you are not from the above listed developing countries, starting an online grocery shopping website can be a great idea since:
However, to start an online grocery business, you need to get a deep understanding of its business model. And we are here to share all the insights with you!
The online grocery buying and delivery business is all about sourcing groceries at discounts, featuring them on your online grocery platform, and delivering them to customer’s doorstep at a small cost.
Usually, online grocery store owners tie-up with local grocery retailers and establish a strong sourcing and delivery network to boost sales as well as profits.
Have a look at this infographic to understand the complete business model of the online grocery business:
Depending on the online grocery business model, there are several ways to make money and long term profits. Check out the most popular ways to make money while selling groceries online:
#1 Product margins : Most online grocery store owners who sell products online usually buy the products at the bulk price and sell them off by giving a small discount. So, they make a decent profit on every product. Online grocery businesses that are running on multi-vendor business model charge a commission on every sale.
Depending on the demand and supply chain, you can also implement different commission rates for different products. This will help you speed up business growth and maximize profit margins.
#2 Membership : Another famous method to make money from your online grocery shopping store. Offer your customers a membership subscription with added benefits such as free shipping, priority delivery, and special discounts. Most online stores dealing with physical products sell memberships to boost their revenue.
Learn how we boosted traffic and profits with our ecommerce expertise
#3 Subscription : Features like Subscription allow your shoppers to subscribe to certain products for regular delivery so they don’t have to place an order for them each time. This includes the products that we use on a regular basis. For example, milk, vegetables, meat, fruits, and hygiene products.
Subscription boosts sales hugely and brings in more profits.
#4 On-store advertising : This revenue generation feature can be added when your online grocery store starts generating decent traffic and sales. Giving vendors as well as brands the opportunity to promote their products on your platform will help you generate regular ad income. Start with simple banner based advertising and later integrate an advertising module just like Amazon!
#5 Merchandise : A lot of offline grocery sellers are getting online and making money through this only. Feature your own products online along with others to grow your sales as well as profits.
If you don’t have your own product range, it will help to partner with brands that are willing to let you sell their products under your brand name. Not only will it help in launching your personal brand but also let you earn bigger profits.
Note : To make maximum dollars, you need the right store features. Check out our ecommerce features list to discover all the amazing features.
If you read all the above carefully, you have gained all the critical information needed about starting an online grocery shopping store. Now, you need an online store development technology to set up your online grocery website!
Choosing a store builder to launch an online grocery shop is more economical than creating a store from scratch. Not only will it establish your online store faster but also deliver a technology that can be scaled with ease.
SwiftKart is quickly emerging as the best online store builder for launching small and big online grocery shopping stores. Check out the key features of this online grocery website launcher:
#1 M-commerce ready : Stats say the revenue generated from m-commerce is projected to reach 37.96 billion US dollars by 2020. These figures clearly show the necessity of having a mobile-ready grocery store. SwiftKart provides responsive web design and amazing core features critical to building a powerful mobile-ready online store.
#2 In your budget : Swiftkart perfectly fits in the budget of small offline grocers and aspiring entrepreneurs who want to make the most of growing online grocery demand. The starter package of Swiftkart can launch an online grocery store at a one-time cost of $499. This means no monthly payments and no capping of products.
#3 Air-tight security : Online security is vital when accepting frequent payments online. Every customer wants to make a safe transaction while checking out from an online shop. SwiftKart guarantees air-tight security and a smooth shopping process to make sure that customers keep coming back for more.
#4 Flexibility and scalability : Modifying your online store according to the changing trends and business needs becomes difficult with a rigid e-commerce solution. Being a completely scalable and flexible grocery store development platform, SwiftKart lets you customize your online grocery store without much hassle.
Learn more about the best online store website builder of 2020
Above online grocery industry facts, business model know-how, and revenue insights cover almost everything you need to know to start an online grocery business. Online grocery shopping is here to stay and this is the perfect time to launch your own store to secure big sales and profits in the long run.
Want to start your online grocery website but still have some queries regarding business model, store development, and growth? Email us at firstname.lastname@example.org to share your questions, and we will answer them all!