Select Page

Ways to Start and Grow eGrocery Business

Ways to Start and Grow eGrocery Business

Online grocery stores are one of the fastest-growing businesses throughout the globe. The main reason behind this is the increasing preference for online purchases by the customers.

The online grocery business in India is relatively new but has been growing at a tremendous pace of 19% growth rate year on year. As of 2019, the online food and grocery market in India accounted for merely 0.2% of the total market but it is expected to reach 1.2% to touch USD 10.5 billion by 2023.

The opportunities have attracted new players to enter the market with existing players trying to strengthen their hold. For growth and sustainability, it is important for the new players to keep their basics right from the onset. So, the question is not simply ‘how to start a grocery business online’ but to answer how to build a business with a solid foundation and digital agility.

Market Research

While there are a lot of players available in the market, new businesses will have to come up with something which others are not offering. For that, detailed market research to understand the problems faced by customers is necessary. Also, deciding on a specific target region is important. A new business must understand the target audience first before selecting a region. It cannot sell groceries online in the region where people do not have internet access or a rural area where people still do not buy groceries online. The following questions could be useful:

  •         What demographic factors define the target audience?
  •         What problems do they face while buying groceries online?
  •         What extra features can be provided?
  •         How to create competitive differentiation?
  •         Is the target audience comfortable using websites, apps? 

These are some of the questions which will new businesses understand their customers better and offer them something which will fill the existing gap. The two most popular forms of online grocery business models are the inventory model and the marketplace model.

Website/App Development

An integrated IT platform for customers and backend order management and fulfilment is essential in e-grocery business.

The online shopping app/website should be compatible with all operating systems (iOS, Android etc.), be user-friendly and deliver a superior user experience. It should fulfil all the modern-day expectations of customers from an online shopping app or website. Customers need to be able to search for products by filters, find product specifications and prices, product images and videos, access and read product reviews, area delivery details etc.

On the backend side of the platform, there should be a proper order management system in place for receiving and processing orders and for communication with customers in the likes of sending order confirmation notifications, live tracking of their orders, delivery timelines, etc.

Process Manuals (SOPs)

It is only when the duties and responsibilities are crystal clear to all of the employees in all the departments will they be able to carry out what they are needed to do. Now, how to achieve such clarity for all? The answer is SOPs. SOP is an operational roadmap for each operation or activity. SOP defines the step-by-step approach to carry out a particular task or operation. SOPs need to be planned and documented. It removes subjectivity and doubt. It also makes supervision, monitoring and improvisations easier. There should be SOPs for every department like finance, HR, store operations, merchandising, purchase, inventory, etc.

Robust IT Systems

Running an online grocery business involves multiple business processes and operations that need to run in a synchronized manner moving the wheels of the entire business. A strong IT infrastructure to support all the departments and the business processes becomes necessary.

The leverage provided by business software applications can significantly trim operational costs, especially in the long-run. A suitable business software application, customized to suit specific business strategies and the resultant operational requirements, can simplify complex business operations to a matter of few clicks and a few inputs. Such software applications collect the data fed into the system by different users across the enterprise, store such data centrally, and make it possible for other process owners to access the relevant data for further decision-making in their respective departments. This results in automation, more accuracy of the information, and speedy decision-making.

Procurement

With hundreds and thousands of products and brands, procurement is a tricky process for grocery businesses irrespective of the channel. The big question shortened would be – what products to keep of which brands and in what quantities?

Reliable demand forecasting and precise procurement become a necessity. There are various analytical and BI (business intelligence) tools for more reliable, data-driven decision-making in inventory management (including procurement).  Auto-replenishment systems could be a game-changer.

Marketing Planning

Marketing begins with the idea of business itself. But we need to understand marketing in action.

For an online grocery business, marketing, in the sense of brand and product promotion and advertising, can be done in two ways:

  •  Digital marketing
  •  Conventional marketing

Under online digital marketing, there are two important fields – search engines and social media.

Businesses can use SEO and SMM techniques to increase their brand visibility (website/app/listing) on the search engine result pages. They can also leverage the power of social media to reach out to a wider audience, engage with customers, or even sell products.

Conventional techniques can be more effective for local audiences. Some of the popular old school advertising mediums are:

  •         Advertising in the local newspapers
  •         Pamphlets and flyers
  •         Hoardings, electronic billboards

Financial Planning

Irrespective of markets and geographies, some important aspects to be covered under financial planning are:

  •         Assessment of capital requirements, source(s) of capital, capital structuring, cost of capital, terms of repayment, etc.
  •         Operational expenditure budget
  •         Sales forecasting
  •         Projected cash flow
  •         Planning for working capital management
  •         Projected income statement
  •         Projected profit and loss statement
  •         Projected balance sheet
  •         Break-even analysis
  •         Ratio analysis

COVID-19 Measures

Hygiene and safety precautions and measures are of the highest relevance in the present context and will continue to be so for a couple of years or at least months. Thus, all grocery businesses, new or existing, must incorporate the necessary measures in every aspect of their business operations.

Some of the must-have measures are contact-free delivery, distancing norms, preference for digital payment, use of masks, hand gloves, and face shields by employees, surface disinfection, sanitization, high standards of cleanliness and hygiene at places of work, advanced packaging, routine body temperature check etc.

The future of brick and mortar retail grocery business is omnichannel. Whether in-house or with the help of retail grocery consultants having omnichannel expertise or retail eCommerce consultants, retail and online grocery business will share a common future.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.