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How to Make Online Grocery Delivery Service Profitable in 2022

By Aastha Malhotra 11th January 2021

In less than a year, the online grocery delivery has gone from a convenience to a necessity. The COVID-19 pandemic has given an accelerating push to several on-demand delivery services, grocery being one of them. 

Added to this, the value addition of contact-less deliveries is further helping fuel the momentum. The global grocery delivery service market is poised to grow up to $631.84 billion between 2020 and 2024. 

There are many other examples, just like the grocery delivery system, that are all set to observe astounding progress in the coming years. Following the growth in demand for online delivery service, there is an equitable spike in the need to create grocery delivery apps. 

Because it is a user-oriented business, you need the right grocery delivery app builder. A business cannot grow in a vacuum; it is a collaborative effort that paves the way for a business to move ahead, especially the online ones. But everything starts by understanding how the system works and what are the challenges faced. 

You might also want to read:

Google Enters the On-Demand Grocery Space | Starts Fresh Grocery Delivery Through Google Express

How Online Grocery Delivery Works?

There are two working models with respect to grocery delivery software

  • You provide the groceries and deliver them. 
  • You collaborate up with vendors and only deliver the groceries – the aggregator model.

Although, the initial steps of both these softwares for grocery delivery work similarly, the difference lies in the later stages. 

Here is how it goes down;

  1. Visit and Register: After you create a grocery delivery app or software, the user or customer visits the website or the grocery delivery app and creates an account. 
  2. Search and Select: Depending on the demand and requirements, the customer will fill the cart with items from the online store. 
  3. Checkout and Payment: The customer reviews the order within the same grocery delivery system and makes the payment. 

Until this point, everything is similar. But according to the working model you have chosen, we will note the differences. 

In the model where you run both the grocery store and the delivery service, you will receive the order on your admin panel, prepare the ordered items, assign a delivery guy, track the order, and wait for confirmation. 

The second model is when you work as an aggregator and create a list of vendors when you build a grocery delivery app. After getting the order, the vendor will receive the order list and you will receive the payment. 

Also, you can assign the order to the delivery guy routing the individual to the vendor’s store, and the same is reflected on the delivery guy’s portal. As an observer, you will be able to track the order and receive confirmation post-completion. 

It seems simple to make these sorts of online grocery delivery services, but you might come across some challenges that can thwart the progress. 

Challenges Faced in an Online Grocery Delivery Service

You might face two types of challenges with an online delivery service;

  1. Technical or Operations related challenges
  2. Humanistic or behavioural challenges

Let’s talk about operational challenges first. 

  • Collaboration between portals: As stated earlier, there are three panels that need to work cohesively for one order delivery. The Agent portal (delivery guy), the workforce dashboard (admin panel), and the customer portal. Any sort of inefficiency or miscommunication in these portals can delay the delivery time, which is not good for your brand and business. 
  • Payment Options: With an ever-increasing marketplace of online payment gateways, you cannot decode which payment option the customer will use. Hence, it poses a challenge for you if your grocery delivery software does not accept the payment option your customer prefers.
  • Inefficient Delivery: Your approach to the grocery delivery system can face a double-edged sword. On one hand, you can come across platform-related issues like lags in the application, miscommunication, delayed responses, non-acceptance by the delivery guys, and so on. On the other hand, you are competing with the hyper-local delivery services that already have a major share of the online delivery services. Along with this, the delivery time and cost can also become a major challenge to your profitability. 
  • Tracking: To develop an efficient delivery system, not only do you need to make the grocery delivery app performant, but also compatible with geofencing and analysis. Tracking the delivery personnel is imminent, as not doing so can lead to behavioral issues, high maintenance costs, longer delivery times, etc.

Other than these, some non-technical challenges are;

  • Customer Behaviour: The thing with customer behavior is that you cannot follow a one-size-fits-all approach. Before the pandemic, mostly urban dwellers were accustomed to using online grocery delivery. But during the last year, the earlier under-represented chunk of the demography has become a part of the curve. With this, your troubles might increase, as now you have to devise strategies for a new customer segment and even increase your outreach. 

Now, the question arises, is there a way to face these challenges? Of course, there is!

Tips and Tricks to Make Online Grocery Delivery Profitable

If you observe closely, there are three aspects of a profitable business; 

  • Idea
  • Development
  • Execution

You have the idea with which you created a grocery delivery app. Until now, you have not done something unique or out of the box to make your business profitable. There are hundreds, if not thousands of online grocery delivery systems that are already working on similar lines. 

But not all of these businesses can succeed with flying colors. It depends on how you face the challenges, and how to run things. So, here are a few tips and tricks to run a profitable grocery delivery service in 2022.

  • Include Multiple Payment Options: Make it easier for your users to pay via multiple options. Credit cards, debit cards, wallets, and other similar options must be integrated into the platform. When you are enabling customers to pay with diversified options, it leads to higher revenue and adds to the customer base. Tookan has an inbuilt payment receiving system that accepts multiple payment options. 
  • Optimize the Delivery: Delivery is one area where you can bring about a difference in your brand’s impact on the customers. Create programs to train the delivery fleet for better delivery. To ensure timely and efficient delivery, integrate your platform with features like geofencing, monitor the fleet’s behaviour, and track their performance. Performance tracking is a key aspect to optimize delivery and curate training programs. Better training means happy customers which is great for customer retention and acquisition. 
  • Build an Integrated System: This means three operational wings when you create a grocery delivery app. More importantly, it is imperative to establish synchronization between them. Tookan provides easy access to a pre-built delivery management tool kit. This helps you manage and view everything in one place ultimately reducing the operational cost. When the drivers, deliveries, and customers are viewable in one dashboard, management is a breeze.
  • Efficient Tracking: Apart from training for fleet delivery, aspects like behavior monitoring and route analytics can help you fabricate efficient tracking routines. Tookan gives you access to graphical reports and helps visualize the analytics, and helps reduce operational costs by providing early warnings to fleet managers. 

We can say that with every kind of challenge you may face with your grocery delivery system, Tookan has the requisite features to help you nip them at the source. Businesses are built on ideas, but they are operated via efficient management. With Tookan, you get access to a platform for tracking drivers and end-to-end grocery delivery management at your fingertips. 

Concerned about managing your delivery fleet? We have all the answers you seek. Get in touch with our experts right away.

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