This article is written by Bhumika Dandona, from School of Law, Sushant University, Gurgaon. In this article, she deals with all the aspects of setting up an online retail grocery store.
E-Commerce is rapidly expanding in India. Its popularity can be subject to continually advancing technology and hectic work schedules of people. Individuals these days prefer ordering everything online, from clothes to electronics and groceries are no exception. It is not only time saving, but online shopping also offers several deals that contribute to money-saving. Setting up a business in this field can be exceedingly favourable if done the right way. But before starting off to fulfil your dreams, there are a few things that you need to keep in mind.
Tips that can help bloom grocery business online
Following are some tips that can help bloom your online business:
Ensure consistency in services
All the services that you provide must be consistent in terms of their quality. For instance, if the customer care service is unreachable many times or delivery executives fail to deliver some groceries, this will harm your reputation.
Develop a user-friendly website and mobile application
The website and mobile application of your company must be user-friendly. All the contents must be laid out in an easily accessible manner and work efficiently. If your customers are unable to locate the sign-in button or payment options, chances are they will switch to alternatives out of frustration.
Keep customers’ data protected
Your customers share their personal information to avail of your services. Therefore, it is your responsibility to ensure that your data stays protected against unauthorized access and misuse. Selecting appropriate encryption software will secure personal data and restrict access to just the company and its employees only for transaction purposes.
Set reasonable prices for the products
Pricing your products at a ridiculously high amount will make you lose the majority of your customers. Always try to adopt fair and reasonable prices that are acceptable to the customers. It will also help in retaining and multiplying them.
Ways to determine the target audience for online shopping stores
Target audience refers to a specific group of people that companies plan on targeting. The aim here is to attain customer satisfaction, which will lead to increased sales and thereby, increased profits. It pretty much explains why determining your target audience is essential. Mentioned below are some ways that you can adopt to do so:
Know your products
Before you move on to identifying your target audience, familiarise yourself with your products. Think about how your products will make a difference in people’s lives for people to buy them. In this way, you will be able to represent your products in a better manner.
The purpose of conducting surveys is to get to know people’s thoughts, feelings and opinions regarding an idea, good or service. Start by asking their general details such as their age, gender, occupation, residence etc. You may ask for their average income. Then frame questions related to your products and their usage, pricing, benefits that people expect out of them etc. You may conduct online surveys or in-person surveys or both.
Study your competitors’ customers
Since your competitors sell products that may be the same or similar in some ways to yours, it would be a good idea to get to know about their customers. Hosting contests, virtual events etc. will help you connect with them.
Track social media activities
People frequently voice out their tastes and preferences on social media by, for example, liking Facebook or Instagram pages of their favourite products or tagging the sellers in their posts etc. Going through these activities annually will help you in understanding people and their choices.
Customers often share their experiences with a particular product on several platforms. Their suggestions and criticism will help you enhance your performance. On top of that, these reviews have an impact on other customers as well. It will provide you with valuable information about what customers like and what they don’t.
Examine everything that you have found out. After concluding, apply it to your marketing strategies.
Identifying the delivery region
Identification of delivery regions depends on a handful of factors. Groceries generally include items that are usually perishable, such as fruits and vegetables. It means that their delivery cannot be possible beyond a certain distance. So it is recommended that areas be limited to an appropriate radius from the warehouse or the local vending shops which ensures delivery of good-quality groceries. It will also save you from spending a large amount of money in the long run on fuel and third-party transport services.
Regions with good WiFi networks are beneficial for online businesses. It ensures smooth online money transactions, placement and tracking of orders.
Set of questions that help to target regions
There are a couple of questions that you need to be mindful of that may help in targeting regions which are as follows:
- What are your customers looking forward to?
- What benefits do your products and services offer?
- What is the average income of the customers?
- What are their tastes and preferences?
- What are their preferred payment methods?
- Where do they live?
- What kind of deliveries do they expect?
Registration of the business
After deciding what business you intend on starting, you will need to get your online grocery store registered and complete all the legalities. In India, most companies get registered mainly as either of the following:
Private Limited Company
A private limited company is a privately-held business entity. It is preferred by most over other options since it gives the owners the freedom to control the financial and other management aspects. It is the best option to opt for if one is planning to set up an online business.
Limited Liability Partnership
Limited Liability Partnership (LLP) is the second most preferred option for registration in the country. It is what the name implies – a limited liability. It is disadvantageous for someone thinking of starting an online business that requires a high level of investment. LLP tends to reveal your financial status to the public, which may scare off the investors from investing in your company.
Registration of companies in India takes place under the Companies Act, 2013.
Procurement and maintenance of inventory
Write down a list of items that you will require for your online grocery store. For procuring them, you can tie up with local vendors who will be your suppliers. Create a legal agreement with them specifying your requirements.
Stock up the goods in a warehouse as soon as received from suppliers. You can hire maintenance staff to ensure that there will be no displacement and compromise in the quality of goods. The number of goods will depend on the average number of orders that you receive.
Finalizing delivery models
Delivery models provide a brief overview of how deliveries are implemented. There are mainly three types of delivery systems that you may adopt for your online grocery store:
In-house Delivery System
In this system, companies hire their executives and arrange for vehicles to transport orders to customers. The whole delivery process is under their control.
Outsourcing Delivery System
In this system, deliveries are carried out by a third-party, such as a courier service agency. They charge the companies for the same. It will save you from the troubles of the delivery process.
Vendor Delivery System
Under this system, vendors with whom the companies have tied up are responsible for getting the orders delivered.
What type of system will be best suited will depend upon the regions you plan on targeting. Apart from these delivery systems, other such services may include the options of one-day, two-day or regular deliveries. Fast deliveries usually come with a cost, but it is not a problem since companies tend to exact the expenses by charging fees from the customers.
Setting up payment methods
Various payment methods can be opted for within the payment system of your online grocery store. Mentioned below are some of them:
In this method, customers can pay for their groceries at the time of delivery.
Payment via credit and debit cards has become one of the most popular online payment methods. Customers can either pay at the time of ordering the goods or at the time of their delivery.
Netbanking refers to an online payment service wherein the account holders can transfer money through the bank’s website.
Much the same as credit and debit cards, e-wallets allow customers to buy goods or services through electronic money transactions.
Website and mobile application development
As mentioned before, it is crucial to develop a user-friendly website and mobile application for your online grocery store. You will need to hire a team of professionals who specialize in this particular domain to achieve this. The ones that are fit to carry out this job are:
A marketing strategist will realize your marketing plans and techniques into reality. They work on advertising your products and services through automated emails, social networking sites etc.
A content specialist works on controlling the content that will go on the website and mobile application. They align your goals with the latest trends to target specific audiences.
A designer will ensure that the website and mobile application seem appealing and easily functional to your customers. They are involved with the layout of the same.
A project manager will effectively manage all activities performed by designer, content specialist and marketing strategist by making practical use of your money to attain success.
An SEO specialist deals with search engine optimization. They will divert online traffic to your website through keyword research, Google analytics etc.
Customer acquisition and retention
Customer acquisition in a layman’s language means to gain customers. For any business to grow and remain stable in functionality, it is necessary to attract customers and retain them. After determining your target audience, you will need to employ various marketing techniques to reach out to the customers which may include:
- Television and social media advertising
- Automated emails
- Loyalty programs
- Gift cards
- Discount coupons
- Paid-media marketing
- Referral codes
- Customer feedback
- Newspaper advertising and pamphlets
- Digital pamphlets
Identifying the competition
Competition exists in every field in numerous forms. While it is looked at mostly as a negative thing, it also significantly improves the way you run your business. Following are some measures that you may carry out to do so:
Classification of the competitors
Firstly, you will need to identify and then classify your competitors. They might be selling the same products and serving the same market as you are. For example, if you are selling soaps while your competitors are selling soaps too, they will be called your Direct competitors.
There might be those who sell slightly different products to an audience that is different from yours. Here McDonald’s and Pizza-Hut can be used as an example. They are serving food items that are different from each other to customers with ranging preferences of flavours. In this sense, they can be called Indirect competitors.
Then there are substitute competitors who sell varying products to an audience similar to yours, such as Coca-Cola and PepsiCo.
Researching your competitors
After you’ve differentiated between who your competitors are, the next step is to research them. Find out information related to their marketing strategies, pricing policies, sales policies, position in the market, reputation amongst customers, supply policies etc. It will guide you in getting to know your competitors in depth. You may also carry out customer surveys to interpret what attracts people to your competitors over you.
Evaluating their strengths and weaknesses
Based on the information so collected, conduct a S.W.O.T. (strengths, weaknesses, opportunities and threats) analysis. Evaluate your competitors’ strengths and weaknesses by comparing their performance in the market to yours. It will allow you to make suitable changes to your strategies. It will also help you in pre-decision making in the view of threats, building your problem-solving skills to a great extent.
Online shopping is a profitable business since it is slowly becoming the norm and overtaking offline shopping. But its success is ascertained by how flexible it is to expand beyond specializations and the ability to keep up with the changing times. Those who have not been able to do so had to shut their shop. Others who complied are now ruling the market.
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