Top 12 Challenges In Online Grocery Business

Till May 2020, online grocery related web searches saw a boost of 202% which proves that the online grocery business is blooming with time. However, many online grocery challenges are also coming into existence with this growth of the sector.

The growing online grocery market has many issues and challenges because of users, costs, technology, etc. However, the fact can not be ignored that it is one of the sectors with great potential and growth. 

In the US, the online grocery business segment saw growth from $1.2 billion in August 2019 to $7.2 billion in June 2020. Even with the growth, we can not ignore online grocery shopping business issues business owners face. Therefore, let's discuss a few of these problems together. 

Online grocery delivery challenges

In this list, I am mentioning a few challenges any online grocery business can face. If you are planning to own a business of such kind in the future, or if you own it already, it might help you in preparing for the same. To help you in a better manner, I am including online grocery store problems and solutions along with them.

1. Evolving market trends

Well, any business can not flourish without a good marketing strategy. Many business owners are still following traditional marketing and advertising ways they read in books. To resolve this one of the crucial online grocery challenges, your strategy has to be practical and based on the current top marketing trends.    

In my opinion, you can outdo the competition existing in the current market by adopting some practical advertising strategies like Seasonal campaigns and discounts, loyalty programs, payment method based discounts, grapevine advertising, brand collaborations, mobile apps for ecommerce, etc.

2. Boosting storage and delivery cost

One of the main problems with online grocery shopping is that their storage cost might fluctuate rapidly. Many elements are affecting the same like taxes, rent of the storage space, maintenance issues, electricity, and many more. 

Apart from the same, the Delivery cost can vary as well according to the expansion of the target market, transportation maintenance costs, fuel costs, etc. You have a great chance of growing your business if you plan solutions to handle these problems with grocery shopping business already. 

Moreover, You can do it by considering factors like your location, target market area, types of transportations, size of the storage space, etc, and plan a tentative cost. Moreover, you can also use supply chain apps to keep a close tab on the supply chain management. It will save you from a sudden event or burden and your business will stay safe from any uncertainty as well.  

3. Fluctuations in taxes

One of the major online grocery delivery challenges includes fluctuating various taxes. These taxes might be of any type like excise duty, sales tax, income tax, etc. Taxes keep changing according to new bills, amendments, or changing governments. Therefore, it might affect various costs included in the online grocery businesses. Hence changes in these taxes directly affect the price of the products, it can create a bad reputation for the brand or business in the mind of the consumer.

4. Inability for efficient deliveries

The inability of delivering products fast or in some of the areas can come out as one of the crucial grocery shopping problems for any business. Delivering products is the most important event for any online business. Therefore, it is important to focus and predict events that might create a hurdle for the same.

This issue can be solved by creating a perfect strategy in the advance. You can create a network of local grocery stores and use delivery persons to pick products from there to deliver. On the other hand, you can set up a minimum delivery value so that your delivery persons can be utilized on an optimum level. Currently, on-demand app development is trending as well. Building a perfect delivery system for your online grocery business can give your business a boost.

5. Non-tech savvy customers

In the US, Only 18% of customers belonging to the age group of 43- 62 years prefer shopping online through best grocery list apps or websites for groceries. There are multiple reasons behind this approach of baby boomers. One of them is their lack of interest in technology. If we take an example of the voice ordering for groceries, GlobalData consumer research says, only 3.1% users used voice commands for grocery shopping.

Most customers belonging to this age group do not want to learn technical aspects and hassles which come with it. Therefore, it can be one of the many challenges in online grocery business you will face.

6. Spoiled inventory management

If you own one of the best shopping apps, definitely you will have to manage an inventory in the background for products you are selling. Now, the real deal is that inventory management can be a tricky task. You can face problems with grocery shopping business inventory like lack of products’ quantities, expired products, old prices, etc. 

However, this problem can be solved with proper planning. You can either fix a recurring inventory management schedule or you can integrate an automated inventory management system within the app to ease the task.

7. Tough penetration into small towns

Approaching small towns is still a big task for online grocery businesses. The reason is that the population in small towns still prefer traditional ways of making purchases. Moreover, investors also find it difficult to invest money for an expansion of the business to small towns as they see a lack of interest in online grocery shopping businesses from these market areas. 

8. The freshness of edible commodities

The online grocery business model is revolving around the storage of products and delivering them to customers. Therefore, in some cases, it gets harder to maintain the freshness of edible products.

To resolve this problem, you can coordinate with suppliers to recycle products to maintain their freshness. Moreover, you can also buy a limited amount of the quantity to maintain the balance between the supply and demand of these products.

9. Customers’ loyalty and satisfaction

One harsh feedback can have the ability to negatively affect your business. Therefore, it is important to understand that customers’ satisfaction should be the center of consideration while developing an online grocery business model. Many customers check ratings on app stores before they install an application. So, a good rating is important for higher installation numbers.

The thing is, satisfied customers can improve your reputation and they can also be loyal to your business. In some cases, they might want to make purchases from your store instead of your alternatives as your behavior is good and theirs is not. So, you should always keep a few things in mind like etiquette, price, respect, etc while running your business.    

10. Imbalance between operational costs and revenue 

The operational costs of any business might vary depending on the functions the business is offering. An operational cost can include hosting prices, domain fees, marketing, and advertising costs, app maintenance costs, licensing value, etc. 

Now, one of the major problems with online grocery shopping is that operational cost might be higher than the revenue; especially if the business is new. Now, the only solution is, to begin with, mandatory things and expand slowly with time and experience. It can save your online business from a huge loss, especially the loss of unnecessary expenses that will be avoided.

11. User interface and user experience glitch

As the online grocery shopping experience is all about websites and applications, UI and UX matter so much. There are a few grocery store problems and solutions in terms of the mobile app design, you should be aware of them as well.

However, in short, UI and UX can have issues like glitches, bad navigation, lags, etc. Therefore, even though it might be a little costly, still, I advise you to hire top mobile app development companies to develop your grocery app offering an errorless experience. Apart from that, you should always be ready for recurring app and website maintenance costs as well.

12. Cyberthreats can spoil the business

Being online means inviting hackers. Now hackers are looking for any way of infiltrating online businesses to steal data, money, payment information of users, etc. Therefore, an advanced security system is crucial for the safety of your online business and your customers' financial and non-financial information. In the US, cybersecurity attacks have compromised the identity of 60 million citizens. 

To avoid it from happening, a regular security debugging for your app or the website is recommended. Moreover, make sure you have an expert dedicated to the maintenance of your website or the app to avoid any ill-timed incidents.

Conclusion

Just a few months back, Covid locked everything down. The need for retail grocery vanished during the entire tenure, however, this pandemic pushed online businesses on the top. Also, it made businesses change their old ways of selling things. Therefore, the competition in the online grocery business increased.

Now, these grocery shopping problems which we discussed above, if you consider them while building your business model, can have many perks. However, you should also be prepared for unpredictable and uncertain events like the pandemic.

By Arpit Dubey

Content Writer

Arpit is a dreamer, wanderer, and tech nerd who loves to jot down tech musings and updates. Armed with a Bachelor's in Business Administration and a knack for crafting compelling narratives and a sharp specialization in everything from Predictive Analytics to FinTech—and let’s not forget SaaS, healthcare, and more. Arpit crafts content that’s as strategic as it is compelling. With a Logician mind, he is always chasing sunrises and tech advancements while secretly preparing for the robot uprising.