Business owners have always considered the online grocery industry an attractive, profit-making, and useful industry. Hence, you may choose to launch an online grocery shop for beginning an eCommerce business.
Grocery-related online searches saw a growth of 202% till May 2020, which showcases that the online grocery business is developing gradually. Nevertheless, with the development of this sector, many challenges have also come into existence. Due to technology, costs, and users, the booming online grocery segment has several challenges and problems.
The online grocery sector saw development in August 2019 from $1.2 billion to $7.2 billion in June 2020. Even with this boost, nobody can ignore the challenges faced by online grocery business owners.
Topmost Online Grocery Business Challenges & Their Solutions
While entering the market with an online grocery app like Big Basket, business owners face many challenges. With experiences and expertise, the on-demand app development company offer solutions to online grocery business issues in a manner that the results are extremely profitable. In this post, I have covered top challenges faced by online grocery business with their solutions:
Challenge – 1: Low-Profit Margins
Consumers don’t care to pay convenience fees and want a rapid delivery alongside quality assurance. Serving this specific requirement can make a lot of issues for online grocery sellers.
Execute an asset-light business model. Rather than getting your own employees and vehicles for carrying out the grocery deliveries, employ an online grocery logistics firm. This will not cost you more than the expense of vehicles and salaries of staff members combined.
At the time of signing an agreement with a delivery service company, ensure to mention that the service provider is responsible for delivering the products between your consumers’ doorstep and your office gate.
Challenge – 2: Complex Structure of the Product Catalog
Usually, people don’t prefer the complicated structure of anything related to online shopping. Due to their reluctance, anxiety, and stress, they sometimes leave a confusing site and search for a more organized, clearer, and user-friendly website.
Apply a logical and clear structure to prevent such an issue while developing an online grocery store. Choose a simple design for designing categories and departments of your site.
This procedure includes several steps like competitor assessment, gathering information about customer habits, regularly purchased goods, most famous product categories, strategizing the site hierarchy, and conducting an intense keyword study to set up advanced search options on the website.
Challenge-3: Customer Habits
Irrespective of the number of online grocery businesses launching and the convenience offered by online purchasing, people still like to shop for grocery goods from a physical shop. The choice of picking own food is more common among customers than everything else in the world. This is due to human nature.
In this regard, you can merge the offline and online grocery buying experience. Follow these ways to boost client experience even if you keep low expenses:
- Consumers visit an offline shop, order the preferred goods online, and then get the products delivered at home.
- Consumers check products’ availability online and then visit the offline store, recheck and confirm the quality, and finally purchase those goods.
- Clients place orders via online portals and pick up them at the physical shops.
- Self-checkout at shops through technologies like iBeacon for helping consumers abstain from the long queues of cash counters.
Challenge-4: Inadequacy of Data
Data has always been an important business resource. Modern grocery sellers must control their data. Not just does this keep all information out of the hands of competitors but also helps retailers use it for developing their businesses and increase profits. Retailers who utilize third-party marketplaces cannot control their data. They cannot access it, do not own it, and miss out on a notable scope for growth.
Moreover, maximum online grocery sellers don’t have enough resources, time, and technology for taking benefits of data on client behaviors. Hence, consumers require putting lots of effort into finding the goods they are seeking. This leads to fewer purchases and encourages customers to move to another online grocery instead.
A data-driven, highly customized experience enables retailers to completely use the consumers’ buying habits by guessing and meeting their requirements in real-time.
For example, this enables grocery sellers to recommend goods, respond to transformations in consumers’ lives that grow new purchasing habits, and respond to the latest market trends.
Challenge-5: Imprecise Terms and Conditions
Numerous people may think whether a store is going to work constantly in its normal schedule at the time of a pandemic. In case a shop works constantly in their ordinary mode or informs regarding a bit changes, it may become a critical factor that will pay the balance in your favor.
Here, the best solution is to give a statement regarding your work conditions directly on your website’s topmost part. For instance, you can place it in the header top bar. This is how you can offer appropriate and clear info to your users, with nothing to be left unclear.
Challenge-6: Incompetent Delivery
It’s really difficult to break the door named hyper-local sections with a single delivery system, particularly when your consumers want the same-hour delivery. Delivery expenses, time, and product quality – these crucial factors set a massive challenge for a competent delivery system.
Since the use of online marketplaces for buying groceries is increasing, it’s difficult for conventional grocery sellers to recognize common scopes in the online grocery industry and make the maximum of it. The admin of an online grocery marketplace executes many methods to speed up the success rate of online grocery deliveries.
Challenge-7: Storage and Delivery Expenses
Storing and delivering perishable products to consumers also bring some of the online grocery business challenges. Perishable goods need more investments in the infrastructure of storage and delivery. Delivery containers, special warehouses, and specific delivery vans should be there to make sure to deliver fresh perishable goods. These need lots of capital.
A just-in-time supply system combined with the best-in-class grocery inventory management API can reduce inventory expenses. Moreover, partnering with a proficient delivery service provider who can satisfy clients using the right vehicles is an excellent idea from operational and economic viewpoints.
Challenge-8: Inefficient Inventory Management
Inventory management can be a difficult job. Sometimes automated systems also fail. An online grocery store app is developed by humans, which often fails to offer the predicted results. You may encounter issues with grocery buying business inventory, such as expired goods, lack of products’ quantities, old rates, etc.
Hence, in terms of building an inventory management app, ensure to work on everything in detail.
This issue can be resolved with a proper strategy. You can either solve a recurring inventory handling schedule or integrate an automated inventory handling system inside the app for making the job easier.
In case, you have a great grocery shopping app, you will need to handle the inventory in the background for the goods you are offering.
Challenge-9: Inadequacy of Consumer Loyalty
When it comes to talking about the challenges encountered by the online grocery business, it’s not possible to shine over the consumer loyalty aspect. In a period of turmoil, the inadequacy of customer loyalty may become one of the toughest issues for your grocery business.
During difficult times, consumers usually try to purchase from the places they are emotionally attached to. And in case your shop is out of this list, it’s a serious issue for you, as your shop will not be the first place where clients would like to purchase.
To overcome this hassle, you need to create a reliable relationship with your consumers. Execute consumer loyalty programs to create connections with clients and offer online grocery successfully.
Issues can happen any day; hence, be ready to work on them beforehand to get ahead of your competitors. Concentrate on choosing and identifying the right target audience and making a proper plan on how to allure and retain them.
All these steps will help you remain a priority for your consumers when it comes to shopping for groceries online. Some common rewards in modern loyalty programs include points that customers can redeem for goods and services for the third parties or the company, discounts, cashback rewards, great offers, and other rewards after becoming a member.
Challenge-10: Poor Store Page Speed Optimization
Slow page load may ruin your efforts on building an attractive online grocery store for your consumers. Time is worthy and none can wait when it comes to webpage loading.
Customers are very impatient most of the time. Studies say that a 100ms delay in page load time can lead conversion rates to drop by 7%.
To fix the issue of slow store page loading, make a unique strategy for e-shop speed optimization. A plethora of methods for speed optimization are available to execute, but the best solution is employing professional eCommerce experts who have many years of experience with jobs like this.
Grocery is a vital requirement of humans. Because of time constraints, people are quickly moving to online shopping. Hence the idea of an online grocery business fits rightly the dynamics of the current business scenario. You may face some great ups and poor downs in your journey but ensure to solve the challenges you face.
Find some great, technologically strong solutions to fix the issues of your grocery app after every stage. Check the challenges and try to remove them if you want to grow your online grocery business within a small span.