Let’s face it: Your customers are already ordering groceries online — just not from you.
If you can’t meet the convenience needs of busy families or elderly shoppers, they’re forced to rely on grocery giants like Walmart or Kroger for grocery pickup and delivery.
Tired of losing revenue and customers to these big-box players? There’s good news: Getting into the online grocery game doesn’t have to be complicated.
In this blog, we’ll explore the why and how behind online ordering for small, independent grocery stores like yours — including six practical tips to take you from zero to making your first online sale.
Let’s get started.
Is Online Ordering Worth It for Small Grocery Stores?
Setting up your online grocery store and managing orders is no easy feat, so let’s make sure it’s worth your time and money.
Online grocery shopping has never been more popular, and experts predict online sales will account for 17% of all grocery spending by the end of the decade. Currently, over half of consumers place at least one online grocery order per month.
The data is clear on the growth of the online grocery market, but e-commerce is more than a trend or buzzword. Here are the biggest benefits of getting your grocery store online:
- Expand your reach: Building your grocery store’s online presence can help you pull customers away from larger competitors. When they search online for nearby grocery stores, they’ll see your website — giving you a chance to win them over.
- Retain loyal customers: Pickup and delivery are a lifeline for loyal customers who don’t have the time or resources for a traditional grocery shopping trip. They can continue to support their favorite small business while enjoying the convenience of online shopping.
- Stand out from the competition: Offering online ordering is an obvious way to compete with national supermarket chains, but being the first independent grocery store to adopt e-commerce in your neighborhood can take your business to the next level.
Grocery e-commerce comes with huge benefits, but you should be prepared for the downsides, including:
- Margin squeeze: Grocery store profit margins are already thin, and the added costs of website maintenance, labor, and packaging can turn small orders into losses.
- Increased workload: Monitoring, fulfilling, and delivering grocery orders can turn into a full-time job — meaning less time to manage your grocery store or sky-high labor costs.
- Tarnished customer experience: While pickup and delivery are convenient, they also introduce new challenges when customers notice missing items or wilted produce in their orders.
Understanding these challenges and making a rock-solid plan to overcome them is crucial, so let’s dive into the six simple steps to set up a smooth, profitable online ordering system.
Related Read: 7 Online Grocery Delivery Challenges (and How To Overcome Them)
1. Choose the Right Online Grocery Platform
Online grocery store success starts with the right tools. Your e-commerce platform should make it a breeze to build your virtual storefront, list products for sale, process online purchases, and fulfill orders quickly and accurately.
When it comes to online grocery platforms, you have two main choices:
- App-based platforms are the most beginner-friendly option. Instead of building a full, custom website for your grocery store, you can create a digital storefront within an app marketplace like Instacart. That way, you can take advantage of Instacart’s existing customer base and delivery infrastructure.
- Website builders offer greater personalization and eliminate the commission that apps make on your grocery store’s purchases, but you’ll have to put in more work to create your website and fulfill your own orders. IT Retail has an integrated website builder, or you can use platforms like Local Express or Wave Grocery.
Keep in mind that you don’t have to choose between these two options. You can always start with Instacart, then build your own website later — giving customers multiple ways to find and shop at your online grocery store.
Related Read: Online Grocery Software: 10 Challenges, Solutions, & Providers
2. Set Up Your Online Grocery Store
You’ve chosen your online grocery platform — now it’s time to list your products for sale.
Creating product listings and managing orders can quickly become overwhelming, so start with a limited selection of your grocery store’s bestsellers.
For example, instead of listing every single flavor of potato chips, check your sales reports to find your top three sellers. This is also a great opportunity to promote high-margin options like your private-label products.
Perishables — especially produce — are some of the most difficult products to sell online. Customers have strong preferences about the ripeness of their bananas or the sell-by dates on their dairy, so consider leaving these items off your website until you feel confident in your quality control plan.
Once you’ve identified what products to offer online, it’s time to organize them. Your goal is to recreate the same great experience for your online and in-store customers, so sort them into easily shoppable categories like beverages, baking needs, and breakfast items.
3. Consider Starting With Pickup Only
Diving into the world of grocery delivery can seem intimidating, which is why we recommend starting with grocery pickup instead.
This removes the pressure of finding delivery drivers, planning routes, and meeting arrival windows while still giving customers a time-saving way to stock up their refrigerators and pantries.
In fact, some experts say that grocery pickup is growing even faster than delivery options!
Here’s a quick overview of how to launch your grocery pickup operation:
- Set up your online grocery app so that customers can choose their desired pickup time (usually a two-hour window).
- Reserve a few parking spaces near the front of your grocery store’s parking lot with clear signage, and set aside storage and refrigerator space for customers’ orders.
- Task a few of your sales floor employees with picking and packing orders. Give them thorough training on how to handle substitutions, stockouts, and perishables.
- Whether you offer curbside or in-store pickup, create clear processes to ensure customers get their order as quickly as possible.
Along with saving time and money for you and your customers, pickup allows you to solve produce quality problems or substitution issues face to face — ensuring customer satisfaction and reducing the chance of refunds.
4. Make Data-Driven Pricing Decisions
Offering online ordering is a guaranteed way to increase your grocery store’s revenue, but unfortunately, it doesn’t always translate to higher profits.
Picking, packing, and fulfilling orders will increase your operational expenses — and if you don’t account for these costs, you could actually lose money on every online order.
That’s why you need to make data-driven decisions about how to price products in your online grocery store. Here are a few pricing strategies to consider:
- Mark up your online products: Consider charging a slightly higher price for your online vs. in-store products. Your prices should be high enough to offset additional costs but low enough to prevent sticker shock.
- Offer strategic promotions: Boost your average order value by offering bulk deals on your bestselling products. For example, give customers a discount when they order two or more of a certain item.
- Set an order minimum: Avoid piecemeal online orders by setting a minimum value on pickup or delivery orders. The industry average is between $25 and $75, so experiment with different minimums to strike the right balance.
Remember: Grocery pickup and delivery are premium services, and you need to charge premium prices to turn a profit on each order.
Related Read: Online Grocery Pricing Strategy: 6 Ways To Make Delivery More Profitable
5. Evaluate Your Inventory Management Approach
Without the right inventory management tools and techniques, your online and in-store operations can turn into a nightmare.
You’ll unexpectedly run out of your bestsellers, promise online customers products that don’t exist, and disappoint in-store shoppers with empty shelves.
Want to avoid the headache and protect your bottom line? Spruce up your inventory management approach before launching your online store.
Most importantly, ensure your e-commerce platform and point of sale (POS) system seamlessly integrate. This means that every single sale — whether online or in store — is reflected in your inventory and sales records.
From there, you can spot potential stockouts before they happen and adjust your ordering strategy to meet your customers’ changing needs.
Free Resource: The Ultimate Guide to Grocery Store Inventory Management
6. Promote Your Online Grocery Options
You’ve set up your online grocery store — now it’s time to make your first sale. Here are a few of the most effective marketing strategies to encourage new and existing customers to take advantage of online ordering:
- Offer a first-time promotion: Encourage customers to place their first order by giving them a one-time discount.
- Use signage: Print eye-catching signage and informative flyers to let in-store shoppers know about your online ordering options.
- Send email and SMS updates: Use your text or email newsletter to link to your new online grocery store and encourage customers to place an order.
- Update your Google Business Profile: Expand your reach and visibility by adding the link to your online ordering system to your Google Business Profile.
These strategies should help you earn sales and turn your customers into online grocery fans.
Take Your Grocery Store Online With IT Retail
Launching your online grocery store doesn’t have to be stressful, especially if you have access to the right tools and resources.
IT Retail is an all-in-one POS solution built to help grocers sell in-store and online. Our software seamlessly integrates with several grocery e-commerce platforms, including our built-in, grocery-specific solution.
Plus, it includes all the features you need to manage inventory, market your store, and keep customers satisfied.
See IT Retail in action by scheduling your live, personalized demo with one of our grocery industry experts.
by Luke Henry
