The e-grocery market is growing faster than other eCommerce segments. The coronavirus pandemic was the catalyst for this process. Against the backdrop of accelerated growth, the key consumer needs related to food have clearly emerged with consumers addressing them online. These trends will determine the business strategies of companies and the vector of development of the whole e-grocery market in the coming years. In this post, we will examine some emerging trends at the e-grocery market and how CS-Cart and Multi-Vendor owners could adopt them.
Express delivery
For those who want to receive products as quickly as possible, express delivery services are the optimum option. In this case, the offer is built around the speed of the service. To ensure the fast delivery required by the consumer, back office fulfilment services should be located as close to the client as possible.
To achieve this, there are several options. At first glance, the easiest one is to start shipping directly from stores, if, of course, this is an existing business model. In this case, it becomes possible to scale your service very quickly, since time is only required for technical conn ection of the point of sales and hiring couriers. You can also connect with FedEx or USPS to ensure express delivery to the apartment door.
The idea is to put fulfillment centers in densely populated areas to shorten delivery times and provide a faster and more convenient shopping experience. The need and demand for that convenience has only grown in recent months. Even before the pandemic, the number of U.S. adults who had tried and liked grocery delivery was at 12%, a 50% jump from 2019. Most retailers had been planning for 30% annual growth for e-grocery, which accounts for 6% of total U.S. sales, but the pandemic quickly changed those expectations.
Forbes
When picking orders from a particular store, there is always a risk of inconsistency in the assortment on the site or in the application and the actual availability of goods on the shelf, since technology has not yet learned how to track products that have already been added to the cart, but have not yet passed the checkout.
Delivery from mini logistics hubs allows to neutralize this gap. They are closed to customers, only delivery service employees have access to it. In this model, the assortment will depend on the area of the object. However, scaling such a model is more expensive and takes longer if there is no ready-made pool of suitable premises.
Click and collect
Along with express delivery, click-and-collect services allow you to quickly get basic products, when a consumer places an order online and then picks it up at the store’s checkout.
Major retailers have gone one step further, with Woolworths, Officeworks and Bunnings among those offering a “drive and collect” service, where customers order and pay for products online and staff members then pack orders directly into car boots.
Sydney Morning Herald
This approach combines online and offline shopping. In addition to the convenience of “bricks and clicks”, the consumer can save on delivery. With the development of this format, the same risks remain as with express delivery, since orders are also collected in a specific store.
At the same time, its scaling is even easier, since it does not include cost for logistics and couriers.
Along with grocery delivery services, various services delivering prepared food respond to the need of “fast order and takeout”, be it aggregators or restaurants’ own delivery. Despite the fact that they use different business models, they cannot be ignored when assessing the competition.
Dark stores
For consumers who want to immediately purchase a large amount of products at a time, there are fulfilment services allowing for additional procurement. The offer of the players in this market segment is based on a wide range of products.
In order to locate tens of thousands of items, as well as to establish efficient assembly and delivery processes, some logistics services use darkstore infrastructure.
Unlike mini logistics hubs, with which express delivery services work, large warehouse stores are more often located somewhere on the outskirts – in large cities it is difficult to find suitable warehouse premises in the built-up central areas.
Remote location of darkstores also entails more complex logistics. Naturally, it cannot be provided by pedestrian couriers or bicycles. Auto delivering large orders requires careful planning to stay efficient.
The logistics issue can be slightly facilitated by product machines – automated points for issuing orders with cells that support different temperature regimes. For them, orders are also formed in darkstores, but such machines free customers from having to wait for delivery at home at a strictly allotted time.
Vending machines allow you to pick up your order at a convenient hour, for example, on the way home from work. They can be located both in grocery stores and in shopping centers, points of sale and other passages.
Subscription
In addition to ordering products, there is a more advanced approach to additional purchase – the subscription model which is already widespread. As of 2019, there are 7,000 companies operating in the world that deliver goods according to this model – of which 70% are located in the United States.
The annual growth rate (CAGR) of the global subscription goods and services economy from 2014 to 2019 amounted to 17.33%. According to the 2019 Annual Report of the Subscription Trade Association, by 2023, three-quarters of D2C websites (Direct to Consumer; a marketplace for goods where companies themselves manufacture, promote, sell and deliver their product without the involvement of any intermediaries) will provide subscription services.
Such services are developing in different formats: a consumer can subscribe to a whole grocery cart or individual goods that he usually purchases at the same frequency (household chemicals, pet food, tea or cosmetics, etc.), services (for example, an unlimited number of deliveries to within a month) and ready-to-eat services (for example, meal subscription services).
Also, the subscription services can be attributed to the “Milkman Model“: when a car with the goods arrives at the agreed time, and a group of people picks it up. This model improves the economics of the service.
The obvious advantage of subscription services is that you only need to place an order on the site once. This model is profitable for online store owners: it becomes possible to plan stocks and logistics for months ahead.
How to choose a delivery model for an e-grocery store?
All the e-grocery segments will be influenced by AI, aggregators and super apps, which are now actively developing. Choosing your model, you will need to weigh your needs and capabilities. The express delivery services and dark stores do not compete with each other.
The same consumer may have different needs at different times. After work, he may order an express delivery of snacks for watching a movie. On weekends he may opt to buy a large amount of products for a week.
The consumer does not need to choose between services – he can use them in parallel. The thing an eCommerce platform owner should care about is how to make its site comfortable for a buyer to use.
Platforms to build an e-grocery store on CS-Cart
E-grocery marketplaces can be built on the basis of Multi-Vendor Plus or Ultimate. Both version are good, but the difference between Multi-Vendor Plus and Multi-Vendor Ultimate is that with Ultimate you will have:
- A mobile app with its source code;
- An ability to create multiple storefronts as regional branches of your marketplace with specific currencies, languages, payment and shipping methods (including FedEx, USPS, DHL and others), and vendors (for different looks, each storefront can have its own theme, layout, and blocks);
- A ability to set different product quantities at different places and show them to customers.
Look at some projects in the e-grocery industry that were built on Multi-Vendor:
- https://www.yumbles.com/ – food marketplace from the UK
- https://www.choplocal.com/ – a marketplace of local meat from family farmers and small butchers from the U.S.
You can find more examples on our website https://simtechdev.com/cases/.
Things to consider while customizing an e-grocery store
Below are the basic areas that need configuration during the initial setup of an e-grocery marketplace:
- Product categories;
- Content pages;
- Product features;
- Product filters;
- Vendor plans;
- Registration form for vendors;
- Vendor privileges;
- Payment methods;
- Shipping methods;
- Menu (main menu, links in header, links in footer).
Delivery time slot modification
Consider developing time slots to help customers plan their delivery:
- Develop a functionality that will allow vendors to set delivery dates and time slots and for customers to choose suitable ones at the checkout page.
- Add the “Delivery time slot format” select box.
- Add a new “Calendar” tab to the editing page available both for administrators and vendors. It can contain the following settings:
- Delivery available in (checkbox) to allow setting minimum required hours before delivery gets available.
- Calendar (date picker) to allow selecting available dates that customers can choose for pick-up at the checkout.
- Working days settings section with the days of the week (checkboxes). It can contain the following settings:
- Delivery time (time picker);
- Number of orders per slot (input) to specify the maximum quantity of orders that a vendor can handle during the exact time slot.
Get more customization ideas for e-grocery stores>>
Closing
Independently of what delivery model you choose, try to make your e-grocery marketplace as comfortable to your visitors as possible. We can customize a CS-Cart or a Multi-Vendor store depending on your business and customers’ particular needs. All you need is to send us your idea, and we’ll make it true!