Grocery delivery business is thriving in the global industry of the service app sector. And as the success of already existing business app models marks their territories, more of them are emerging in the global market across various nations. This is also indicates that the present trend can continue to offer more success for other emerging businesses. In 2016, around 1-third of the Global online consumers prefer the online grocery delivery services, as unveiled by Morgan Stanley Report.
There are several reasons why grocery delivery online applications are widely preferred, like:
- It eases the task for the consumers.
- It saves people from getting stuck in the busy supermarket lanes.
- It provides a variety of buying options.
- Users also get access to fantastic rewards and offers.
As predicted by Nielson’s study, by 2024 around 70% of global public will prefer online grocery delivery businesses.
In the entire eCommerce industry, grocery eCommerce is the thriving one, and it has grown rapidly amid the Covid-19 pandemic, acquiring a wider user base. With the lockdown restrictions and health risks, people preferred staying home and accessing the essentials then and there, without having to move out risking their health and lives. With this, various tech giants like Amazon, Instacart, and others also entered the sector with their instant solutions.
Earlier, people used to resist the usage of online grocery delivery services to avoid extra delivery and packaging charges. Furthermore, quality check is not possible with online grocery delivery, thus acting a major hindrance for their preference in earlier days. But the emergence of Covid-19 pandemic managed to change the entire scenario and give a wider turn to the industry.
Best On-Demand Grocery Delivery Applications
There are some prominent business models for grocery delivery business which are highly preferred globally. Here is a brief on top 5 of them.
This is the grocery delivery business model in which the supplies from various providers is saved directly at a single platform. The delivery service then collects the orders from the supply network and then delivers them to the customers. Consumers receive the order with site’s logo, irrespective of their vendor. This is a convenient model and acts as the single product shop, like vegetable supply service, daily milk supply service, etc.
The business adopting this model monitors the consistency of the produced products and goods. Furthermore, when the business manages the entire supply chain by purchasing from various setups, they gain the higher profit margins. For example, Big Basket uses the model by directly selling the goods to the distributors, farmers, and retailers and then storing the goods at the warehouses. For proper management, the grocery delivery business uses better customer service system and has a larger basket for better management.
This is an expensive model as it requires a warehouse setup, quality check and control measures, transportation service, and warehouse administration. Washing the goods is also possible if not sold and utilized in a given duration. Big basket like grocery delivery services also market some private labels like Fresho for efficient branding and better benefits.
The Multi-Vendor Marketplace Model
In this type of grocery delivery business model, the platform does not directly handle the stocks. Instead, the platform ties consumers to the nearby food stalls or shops, the users then place the order from the desired store using the website. The delivery service executives manage the delivery and other transport services by gathering the goods or products from the sellers and delivering them to the consumers. This is a popular model that Amazon follows.
This multi-vendor model is an invaluable complement to the on-demand or online grocery delivery business due to its success in the market and the role in ensuring higher conversion. While using this model, the costs are saved a bit for the warehouse and storage matters for the business.
The Shopping Model
Shopping model is another alternative for the grocery delivery business. Most of the giant hybrids fit in the model. The overall working of this model is highly like the multi-seller model; the only difference is that the consumers do not have the right to pick the seller/store before placing the order. The grocery delivery application manages its distribution network, and if the order gets issues, then the company passes the details to the vendors internally. The vendors have to shop the products for the consumers from various stores.
This is the model that Instacart follows. They also name the workers as the shoppers who shop on behalf of their consumers from various supermarkets. Actually, it is a fantastic model as only the storage network and supplies are required that they can assure seamlessly in the current model of grocery delivery.
It is a competition based model that serves the demands for a smaller region. This model lists all the stores and sellers of the nearby regions that stores and sells all the products, meeting the local resident’s needs. It is thus a self sufficient grocery delivery business model. This is the most recent and thriving model in the current industry and its success has taken a wider turn with better grocery distribution and ordering services.
With the emergence of hyper-local grocery delivery business model in the industry, even the local offline stores and service providers have received newer lease for the companies. Even though the idea is a bit newer, the World is not newer to internet consumption for various uses. The USP of the businesses using these models is the willingness to sell some fantastic products with better services. This model pledges to the clients that the goods will be delivered shortly without any delay.
Click and Collect Business Model
Also known as BOPIS (Buy Online, Pick-up in Store), this click and collect business model is the perfect blend of offline and online shopping experience. BOPIS grocery delivery service helps grocers provide the convenience of online and offline shopping mode for the customers. Post and Parcel’s research predicted that by 2025 around 10% of sales will be driven by adopting the click and collect retail strategy.
This helps the buyers to order groceries online and then pick-up the order from the nearby stores. This is the major form of contactless delivery that is trending, mainly amid the Covid-19 pandemic. Still the model allows the customers to get the orders delivered at their doorsteps. Kroger is the prominent online grocery service that recently celebrated the success of its 100th Click and Collect grocery shopping service.
Choosing the Business Model for Grocery Delivery Business
Here are the steps that will help in identifying the right grocery delivery business model:
- Figure out the exact value of the business solution in the market.
- Get the confirmation that the product or service is viable.
- Test the channel or business plan with the support strategies.
- Discuss with the investors or the industrial leaders.
- Plan and execute the right business model.
- Focus on widening the user base.
- Target the stores from all across the nation for various industrial groups
Starting the online grocery delivery business requires a proper research and in-depth understanding of the target audience and the market. Furthermore, there is a necessity to decide the best model for the business. Game App Studio helps the clients with the best grocery delivery business model development. We ease all the tasks and deliver the best solution to help their business grow and thrive in million ways.