A Race against time

The race for supplying groceries online is heating up. #Blinkit, #Dunzo, #Swiggy, #Zepto, and now #Reliance Retail is soon to enter the space. Their differentiation?

Shorter delivery times – 9/10/20 mins.

But, why focus on ‘NOW’? Is it important? More than you think.

Less than 17% order from online grocery for the speed as the primary reason. But it is the #1 motivation to get someone to start using the product.

Remember the first time you used it?

I’m guessing it wasn’t a coupon.

It was likely something you probably forgot to buy in time.

Once someone starts using the product, ~70% order at least once a week.

What are you most likely to run out of?

Onion, Tomato, Potato? Shaving cream?

But that is what gets you into the app – it isn’t what you stay for.

Despite the push on fresh produce, the biggest categories in terms of order value are still packaged foods, personal & household care.

This is where the real margin lies.

Fresh & frozen produce are relatively low margin considering the wastage but are great products that are the stimulus to help:

a. Keep someone from not going to a super-market

b. Keep them locked onto the platform

c. Build and order with discretionary purchases

Real estate of a tiny screen can be super effective to:

a. make you feel like you are getting a lot of choices despite only having selected items.

b. push products that are high margin with discounts and deals.

c. help push increased order values using instant gratifications – like super-fast delivery/ visual stimuli.

d. restrict the user from shopping by comparing prices across apps or with an offline store.

Now imagine a brick-and-mortar business that:

a. paid no rent

b. could get their users to pay mark-ups

c. could tell them only to buy what they stocked

d. increase predictability 2x in the entire supply chain

Now wouldn’t that be valuable?

#cfo #finance #nudge #onlinegrocery #retail #ecommerce #consumertrends