The online grocery market has seen rapid growth in the last few years. In fact, the industry market value doubled from 2016 to 2018. This trend will likely continue for the foreseeable future (especially given the events of the past few months). Within the last week, a single grocery delivery business reached a valuation of nearly $14 billion.
It’s becoming clear that online grocery delivery is no longer just a trend—customer behaviors are changing, and it’s now expected that grocery stores offer delivery. For that reason, most grocers, whether established or newcomers to the industry, are looking to expand their delivery services to meet the new demand. In addition, newer grocery delivery services are finding ways to compete (often on a local level) with the larger companies, such as Instacart and Shipt.
Of course, all this growth comes with increased competition. Everyone is looking for the right strategy and software for their situation. Undoubtedly, all the major players in the industry—Walmart, Kroger, Amazon, etc.—are employing unique strategies to find success within their niche.
This raises a few questions: What are the keys to profitable grocery delivery? And, how can you adapt the OnTime software for your situation?
Profitable Grocery Delivery
Although the market segment as a whole is indeed growing, individual grocers are more concerned about the question: Can my grocery delivery service be profitable?
A profitable online offer is achievable, but to drive long-term profitability, grocery delivery services need to pay close attention to a few key factors.
Logistics is at the core of any effective grocery delivery strategy. A service needs to have efficient and accurate picking of in-stock products, and low cost, on-time delivery. Retailers who focus on optimizing their delivery process are benefiting from the lowest-cost operations, enabling them to serve customers more cheaply than their competitors can. It’s necessary to take into account driver management, route optimization, tracking, and more.
Implementation of software is also an essential factor (more on that later). To provide a top-of-the-line customer experience requires purpose-built technology, both customer-facing and in delivery. Poor implementations can cost time and money. Worse still, choosing technology that doesn’t fit the business model in the first place can set back an entire operation.
Continue reading to see how OnTime can improve the delivery process, whether it be an independent grocery chain, or a courier business looking to create its own version of Instacart or FreshDirect.
Use the OnTime API to connect OnTime with other platforms, such as websites or mobile apps. For example, it’s very common for grocery delivery services to have a mobile ordering app for customers. With the API, it’s possible to connect an app to an OnTime account and transmit order information from the app into OnTime.
This feature saves dispatchers from the time-consuming task of entering this information into a delivery system manually. Our API helps to extend the efficiency of a delivery service right through to the customer’s doorstep.
As a grocery delivery service continues to grow and increase in order volume, delivery management becomes more and more important. Here are a few of the most valuable OnTime features for delivery management:
Set up signature capture for high-value items, create zone-based pricing, and add additional items to the order, such as instructions for delivery drivers.
Use our location management feature to organize all addresses that a company has either picked up from or delivered to. This list of addresses may be organized to better view a company's reach.
In our real-time tracking feature, view the status of any order in the system. Reassign orders to different drivers, while OnTime logistics software takes care of all the necessary notifications.
To learn more about what OnTime has to offer, make sure to check out our features page.
As we touched on in the last section, a delivery process becomes more complex as order volume increases. This means dealing with multiple drivers—and that comes with a new set of challenges, such as vehicle maintenance, tracking, and route optimization. OnTime provides the tools needed to manage these different elements successfully.
For example, OnTime Mobile allows dispatch mangers to stay in tight communication with drivers through email, text messages, or internal messaging. And OnTime’s GPS connectivity can transmit a driver's position to the dispatch manager throughout the day. Maintenance reminders, such as insurance and license dates can be kept up-to-date under the driver information section.
It’s likely that you have more specific questions about features and support. After all, each grocery service will have it’s own unique needs. Over the years, we've helped many food delivery companies successfully adapt OnTime. (For example, you've just seen a small sample of what the API can do.) Contact us if you'd like to learn how we can build a solution for your business.