Online Grocery Shopping - Who is going to fill this gap?

Here is my 1^st post on my blog. I wanted to start with an interesting topic, and thought hard of a subject which would interest us all. I wanted it to be in sync with the blog title, motivating and appealing enough to drive us to contribute. This again comes from my philosophy of sharing knowledge. Gaining form each other’s experiences. Isn’t that the best way of learning? There’s also a saying in Hindi which goes like – “Gyaan baatne se badhta hai” (One enhances the knowledge pool, by sharing it with others). Well, having spent enough time on deciding and still without a conclusively strong topic, I finally thought of just going ahead with my FILL THAT GAP business idea….. Conceptually it is not new, but its adaptation is definitely challenging and worth ruminating.

 

We have all experienced Online Shopping, at some point in time in the last few years. We all agree that is convenient for sure, offers a broad range of choices, ready comparisons are available, does not get affected by the weather conditions and physical abilities, and is quite different in overall experience. A lot of us also have become addicted to this shopping format, but a sizable chunk in India still remains laggard. Some are concerned of the privacy and payment security issues, others are not patient enough and want immediate product experience, some worried about the quality delivery, and some don’t like the 2 dimensional shopping experiences and miss the touch and feel of the product. The internet connectivity and penetration is another concern in India. More importantly they lose out on the opportunity and excitement of shopping and evaluating things on more aspects than just price and look. The advantages of online shopping experience though are not applicable to lifestyle products or premium priced products, or first time purchases. As in lifestyle products, the indulgence is more important than the purchase.

 

Now, imagine if you wanted to buy a Gillette Mach3 Turbo Razor or an Eveready AA pencil battery or a Parle-G biscuit or a 500gm Amul Butter. What kind of shopping experience would you long for? Yes, we don’t need to know more than just the price and the product production/expiry data. This is where my idea! Of filling the gap, makes a lot of sense. Before I present my idea let me pick an experience from the past and share with you.

 

I remember in my childhood days, I used to bicycle down to the community market and handover the list of Grocery items (prepared by mom) to Mittal Uncle, our trusted nearby Kirana Shop owner. He used to pass the list to his assistant, which went into a stack of home delivery lists and get delivered (on a rickshaw along with deliveries for a few more people in the neighbourhood) in a few hours. Traditionally we used to shop this way, for such items, for daily use or monthly provision. Why is the Organised Retail Industry in India not looking at this option? Okie. Some of them have started this service a while back and do provide such facility, but the reach is limited and the logistics is not so efficient. Why are they not considering this more seriousness? Is the logistics so difficult or is the cost so prohibitive? I am not sure if delivering the service or the Quality, is a challenge. If a community Kiranawala can afford Rs.5 (in those days, which was as a % spend would be similar even today) for a rickshaw trip for a few households in a locality, can the organised retail not work on similar model to offer this service. The reason our Mittal Uncle did so was to have differentiation, offer more value, maintain a list of loyal customers and not allow his customers to go to a competitor. Has the objective changed in today’s more competitive world? Has it not become all the more imperative?

 

Slowly the physical list changed form. It transformed from a piece of paper to a phone call. With increasing penetration of fixed line phones and finally with the advent of mobile phones and affordable charges, grocery lists were delivered over the phone. It saved people from physically going and delivering the list, thus more convenience. And finally in the last 5 years, the traditional retail model has been revolutionized and Super markets, Hyper Markets have gained entry. Then comes the recession and these outlets experience much lesser footfalls. How are these retails formats going to tackle this unprecedented recessionary period? Are they going to rationalize and do a viability analysis of the stores and close down many? Or is it the time to think beyond the obvious, do something extra, innovate and create more customers, more loyal customers.

 

Let’s take this a step further (this is the part I love the most, thinking beyond the obvious). What do you think of an ONLINE GROCERY SHOPPING experience? What I am proposing is nothing revolutionary. The concept remains same, only the mode of delivery of the grocery list changes form, once again. Yes, it gets “Digitized”. This means you shop your grocery at their convenience of sitting at home. You will no longer have to be bothered with visiting the neighbourhood departmental store, physically picking items from the racks, dumping them in the cart, making payment and carrying the load back home. Let your finger take the load of this task. You shop at the click of your mouse. Wait, you need not be worried about the payment security as well, you have the option of making the payment in cash on delivery. Card payment option can be provided as well at your door step, if you are short of cash close to the month end. There is no end to extending services…. In return there are a whole range of benefits attached to it.

 

From the Customer’s perspective

The Attractions :

1.       Experience + Convenience - Most of the grocery, monthly provisions are low involvement products, and very few of them need closer scrutiny and quality comparisons. What we end up comparing are the prices and offers available. Hence a simple imagery of the product on the website along with the price will make it sufficiently indulging enough for a grocery shopping.

2.       Comparisons & Revelations – This format can offer a whole range of information about the product, its nutritional values, literature, usage, price and quantity, etc. to compare with competitors. You might end up discovering that the brand you have been buying till date is actually offering you lower quantity than the competitor’s brand or the price you have been paying for an Amul Butter is higher than a equally good quality Britannia Butter, etc.

3.       Trust and Quality, Intact – The model will be viable only if it operates on the traditional model of quality delivery every time. One mistake by the manufacturer/marketer in their quality, and the customer will reject and shift to a competitor. This is the basic mantra of developing long term loyal customers and no marketer can defy this.

4.       Preferred home delivery time – The online interface can also provide you an option of a scheduled delivery. If both husband & wife are working they can receive their supplies at a desired time of the day or a particular day of the week. As logistics can be worked out having the order much in advance.

5.       Pay in Cash post delivery – The option of paying in cash (like in the old days) takes away the apprehension of millions of unsecure online transactions. You can shop at easy and keep your peace of mind by paying in cash.

6.       Evaluate all Promotions / Schemes / New products – The online interface can also provide special sections like Current promotions, schemes, etc. Have a dedicated category for new product launches which will immediately get attention and the customer will make it a habit of going through the entire list of schemes/promotions on before making purchases, which they might miss in a physical setup.

7.       Time Saved – The time saved in the process cannot be matched with anything. I mean why would I want to go and buy 2Kg of Sugar, 10kg of Annapurna Atta, 1kg Tata Salt, 200gm Turmeric power, 1 packet Everest Biryani Masala, etc myself. When it can be done so conveniently online. Can’t we all put that time to some better use? For sure we can. You know what I mean…..I mean, how much time does a quickie really take !!!

 

The Discouragements

1.       Rejects/Replacement/Exchanges – Well not all items need minimal involvement. There are a select grocery items which needs a little more scrutiny and there are possibilities of a few rejections/returns. For instance, you might not be comfortable to take a distorted can of Diet Coke and might want it to be exchanged. These nuances, we will have to be prepared for and live with, also the retailer should be willing to deal with it or lose the customer. Is that not how things worked in the past? Remember our Mittal Uncle.

2.       Fruits & Vegetables – There is a higher risk in items like Fruits & Vegetables which form a part of the offering by these stores and our daily needs. Customers might still have to visit the store and select such items as per their preference of size, perception of freshness, etc.

3.       Remain available at the scheduled time of delivery – Though this model offers a lot of convenience but also leaves you with limited flexibility to move out of house close to the scheduled time of delivery. So any emergencies will result in a non delivery of the items in time.

4.       Urgent needs – Again any urgent requirement cannot be necessary qualified due to minimum delivery lead time pressure. This again is subject to the traffic in the store and the time of the day. Unfortunately you might be forced to miss a few crucial overs of the cricket match / the sensational controversy in the reality show and walk up to the store to get it yourself.

 

From the Retailers’ Perspective

The Pluses :

1.       Loyal & Long Term Customers – Retailers reduce the hassle of shopping daily/weekly needs and saves time for the customer. The customers in return, conveniently welcome this new service and make full use of it, investing the extra time at hand in more production tasks.

2.       Lesser Price Sensitiveness Customers – The customer becomes less sensitive to small price differences in comparison to a rival store and happily gives in a small premium for the service offered.

3.       Database Management – The most crucial weapon the retailer develops is the database of a customer’s brand preference, their product basket, their frequency of purchase, etc. this can be put to so many use in terms of promoting volumes and products on the purchase pattern of the consumer. This database can also be used as an alternate revenue model by sharing it with Research Agencies on a constant basis.

4.       Easier Logistics – Online ordering facilitates consolidation of orders at one place, segregation and allocation of the same to respective stores located in the area nearest to it. Moreover the stores’ stock position can be accordingly reviewed and replenishment can happen at a precise and faster pace having captured the future demand already to some extent.

5.       Increasing Efficiencies – These stores can act as a distribution hub as well and offer multiple purpose and thereby reducing overheads and bringing in operational efficiencies. Also in the lean hours a part of the in-store staff can be allocated for home delivery purpose. Similarly more staff can be called to the store at rush hours. In addition to this aggregation of orders through this process offers optimal load and route planning for delivery of the same, hence making it cost effective and viable.

6.       Easier Store Management – More online customer will translate into lesser in-store traffic and more space (in small stores) for new / not so innovative customers to shop conveniently making their experience more enjoyable and comfortable.

7.       Self Sustaining – If for a moment, we consider that the customer is willing to pay a nominal amount for a delivery at door step, this model can move towards a more viable system and can probably end up self sustaining. Going back to the old days, we have always tipped the rickshaw guy 2 bucks for his services of delivering it at door step. I am sure none of us would mind paying a small token amount of Rs.10/- for every delivery. 10 – 15 such deliveries a day will earn sufficient to cover the cost of a Rickshaw for a day.

 

The Minuses :

1.       Rejects / Replacement / Exchanges – As mentioned earlier the Retailers have to deal with it. Anyway if the consumer comes to shop at the store a poor quality, damaged package, near expiry stock will not find takers. Similar is the effect in online transactions so they will be forced to deliver good quality products to avoid any rejection or replacement thus reducing logistical costs and mishaps.

2.       Manpower Allocation – The manpower allocation for in-store and out-store operations can prove be a nightmare, but a critical evaluation and trial period experience it can be optimised.

3.       Undelivered Scheduled Consignments – Unfortunately if a scheduled consignment is undelivered due to absence of a customer at home the retailer stands to earn extra for repeat delivery. This is over and above the calculated delivery costs and hence will go into the company’s kitty directly.

4.       Lean periods – In times of lean periods like the recessionary phase, the committed expenses of delivery can work out to be higher per load drop, due to lower no. of orders, lower billings, etc. The company can quickly adapt to such situations by having a more flexible delivery mechanism, like the Pizza delivery system, or more labour intensive ones like the rickshaw, cycle, carts, etc. Will help generate opportunities for the lower class this supporting contributing to recovery.

 

It doesn’t end here. The database thus created is so vital and valuable that it will open many more doors for the Retailer and its marketing team to play with and experiment. The challenge is to get a system (a much evolved and exciting user interface, create exhaustive database of product and its details, prices, schemes, order tracking, etc.) up and running efficiently to seek appreciation, popularity and word of mouth publicity.

The challenge is not to just conceptualize and think of doing it, but to make it happen and then innovate again by Out-Thinking the competition! This will prove to be a powerful tool to gather perfect ingredients for every marketer’s dream. This can then unfold many new possibilities for the companies. The best part is the customer providing this information willingly, free of cost and without any apprehension.

 

Let’s see you Out-Think this!