How Online Grocery Delivery Services Are Redefining Customer Behaviour
It is evident that there has been a fundamental shift in the buyer’s behaviour over the course of this year. The sheer idea that anyone could get groceries delivered directly to their home at the convenience of a few clicks is no less than revolutionary. Shadowfax has played a vital part in this rampant change as a major player in the grocery supply chain arena bringing in speed, reliability with its network and tech infrastructure.
“Covid times have come in as a tail-wind for the online grocery opportunity in India. The market has shown significant growth during the pandemic lockdowns which are bringing new first time users online to order daily needs from instant delivery platforms. To adapt to these changes in buying patterns, we are seeing FMCG transforming supply chains and direct to consumer (D2C) presence,” says Abhishek Bansal, Co-founder and CEO, Shadowfax.
According to Redseer, a leading market analyst, India’s online grocery retail market is slated to rack up a CAGR of 60% and reach USD 10.5 billion by 2023. While large horizontals, such as Flipkart and Amazon, are trying to break into this market, hyperlocal grocery specialists like BigBasket and Grofers have registered the highest Year-on-Year growth. Amongst all the offerings, daily essentials account for the highest share of the online grocery delivery market. Hence, businesses must pivot and adapt to these changes that have now taken root.
Brief Overview Of The Online Grocery Delivery Model
The success of grocery delivery services lies in its uncomplicated structure:
- People: Includes human elements, such as delivery partners who go through exhaustive training and grooming, warehouse managers, store owners, and consumers.
- Fleet: Vehicles required for transferring material from source to warehouse and warehouse to store and then to delivery locations.
- Technology: Applications through which stakeholders can track the status of the fleet, keep stock of inventory, manage warehouse/store operations etc., while consumers can place orders, make payments, and more.
- Slotted and Express Delivery: Grocery delivery is generally done on prescribed slots. The customer can choose the slots that are convenient . Express deliveries, where orders are delivered in some hours are also available.
- Payment on Delivery: Customers can pay on delivery and multiple options like cash on delivery, debit/credit on delivery, UPI options are also available for customers.
- Contactless Delivery: The current pandemic has caused many services to ramp up for contactless delivery and online grocery players are no different.
- Easy Returns: Many logistics players like Shadowfax support easy returns on grocery, providing the option of either complete returns or partial returns. Even if the customer is not satisfied with the quality of half the products, it can be returned.
While the grocery delivery system may appear to be simple on the surface, maintaining supply chain continuity requires a systemised approach.
Typically, the grocery supply chain operates on the following models:
- Dark Store Model: The dark stores are warehouses that act as fulfilment centres for delivering to a set radius. Customers cannot physically visit these to make purchases.
- Live Store Model: Physical stores that also operate offline, accept online delivery requests, and hand-over the distribution to logistics players such as Shadowfax.
- Distribution Point Model: Stores set up pigeonholes where franchisees offer a pack and route system for the delivery of goods.
- Direct to Consumer/Omnichannel Model: Clients choose a store and build their cart on the web or mobile applications. The delivery partner then visits the store and collects the supplies to deliver it to the customer.
- Cross Dock Model: In the cross docking model, the merchandise after packing and routing at fulfilment centres goes to a cross dock, where it is loaded from a bigger truck to a smaller truck, and from there it goes to the last mile.
- Satellite Model: In the satellite model, instead of the client setting up a facility in each city, logistics players have their own cross dock set up in a satellite city and delivery is attempted the same day or the next day.
Businesses choose a suitable model and pair it with their people-fleet-technology approach to offer their services.
The Story Until Now
Grocery supply chain players such as BigBasket and Grofers have been reigning supreme in the grocery delivery race for quite a while. Together, they dominate the online hyperlocal grocery market.
Shadowfax has been working in partnership with these players as its trusted logistics and delivery service provider since 2016. In fact, both the apps were built to complement each other. Soon enough, other players realised the opportunity and spent no time in getting associated with Shadowfax to increase their last-mile reach. In addition to facilitating delivery, Shadowfax also made the processing of returns easier. The app facilitates complete or partial returns of products immediately.
The Shadowfax delivery fleet contains a mix of bikes, vans, and other vehicles to facilitate a variety of orders. At full capacity, Shadowfax makes 30,000 grocery deliveries daily with more than 15,000 deliveries over bikes and the rest through a mix of 3 and 4-wheelers. It has a strong presence in more than 100 cities across the country.
All riders and delivery agents undergo rigorous training and grooming to adhere to the best standards of FMCG delivery. Since this is one of the few categories where the delivery partner enters the house of a customer, they are groomed and trained in a way that they are presentable and courteous, they can read and compare the items to the bill amount, they can handle returns etc.
This training ensures that all items are stored and handled with the utmost care. Furthermore, it makes optimum usage of slot structure for higher availability and improved deliverability. Such metrics allow for smoother operations and on-time delivery of fresh products. The delivery vehicle is also maintained for quality check and only covered vehicles are used for this purpose.
COVID-19 Disruption
The nation-wide lockdown in response to the Coronavirus pandemic saw an accelerated increase for online grocery delivery service providers. According to Forrester Research, India’s e-commerce industry is pegged to grow at 6%, equating to about $35.5 billion this year,
Realising the untapped potential of this sector, several new players entered the arena. Snapdeal, Uber, Zomato, and PayTM Mall, amongst others, tied up with retailers or local markets to offer grocery store delivery services. Similarly, Shadowfax forged strategic partnerships with several stores and retailers to bridge the delivery gaps. Many offline retailers and chains such as More, Big Bazaar, Easyday and others are also venturing into the arena. FMCG players are also trying out the D2C model, where they are sourcing, marketing, selling and delivering the products directly to the consumers. Big names such as Flipkart are exploring the online grocery delivery market now.
The Way Ahead
Even though the demand peaks may have flattened to some extent, it has laid the foundation for online grocery delivery as the new normal. Hence, such trends will sustain in the years to come. Businesses must prioritise adapting to the radical changes that are bound to modify customer behaviour. For Shadowfax, the future lies in establishing a strong presence in multiple cities and utilising technology to make the delivery experience more seamless.
