Instant Grocery Delivery: How to Make the Most of the USD 5.5 BN Market Opportunity 


Instant Grocery Delivery: How to Make the Most of the USD 5.5 BN Market Opportunity 

With rising demand for convenience and super-fast deliveries, recent years have witnessed an unprecedented rise in demand for instant grocery delivery. As Covid-19 dawned upon our lives, people were forced back into their abodes, and work-from-home became the new normal. 

The on-demand delivery platforms grew in popularity by leaps and bounds. And why not? With just a few clicks and an internet connection, you can now get groceries delivered to your doorstep within minutes. This instant grocery business model has evolved over the last few years and is expected to surpass $100 billion by 2022.  

However, businesses have their fair share of roadblocks when delivering fresh and healthy produce to the right customer at the right time. Factors like traffic congestion, lack of automation, inefficient inventory management, and last-minute requests can pose challenges when delivering a positive CX. 

Various enterprises are leveraging innovative platforms to overcome these challenges, increase efficiency, increase profit margins, and minimize carbon footprint via route optimization features.

In the blog, we will explore the working, bottlenecks, benefits, and changing dynamics of instant grocery delivery.

How Does the Instant Grocery Delivery Work 

Instant grocery delivery includes the customer ordering groceries from a third-party app, after which a rider picks up the items from a store and delivers the products directly to the customer within 10-30 minutes. A major aspect of the instant grocery delivery model is streamlining the logistics flow. 

From delivery of fresh produce to transportation of dry goods, instant grocery delivery is based on proper planning, scheduling, and routing. On-demand delivery platforms are increasingly becoming popular among businesses to facilitate seamless communication between riders-stores and riders-consumers. 

Once the customer places an order, a rider is automatically allocated and provided with the best-optimized routes via features such as geocoding and geofencing. Every stakeholder involved is kept informed regarding delivery milestones with real-time updates for increasing transparency and tracking throughout the process.

According to a study by JP Morgan, 1 in 3 consumers prefer ordering groceries online. Companies must strengthen their logistics to meet rising consumer demands, determine efficient routes and increase profit margins.

Next, we explore some of the major operational challenges in instant grocery delivery.

Operational Bottlenecks in Instant Grocery Delivery  

Lack of Optimization 

Manual and traditional logistics approaches in quick commerce take a hit on productivity and, inevitably, the business bottom line. Enterprises that do not invest in automation capabilities find it challenging to keep pace with the demand surge due to a lack of proper planning and scheduling. 

Riders end up taking longer routes and are also subject to delays, resulting in increased fuel costs and wastage. 

Lack of Automation for Effortless Working Across Multiple Integrations

27% of customers abandoned their online purchases due to delayed deliveries. Instant grocery delivery can be a logistical nightmare if your data and resources are not properly integrated. 

It is tedious to keep track of work across various levels, integrating all tasks and operations. A smart platform such as Shipsy’s AI-enabled on-demand delivery platform offers driver slot management, dynamic order clubbing, live order tracking, and KPI benchmarking to meet SLA guidelines effectively. 

Instant grocery delivery bottlenecks

Poor Real-Time Planning and Monitoring  

Customer preferences are subject to change at any minute. Last-minute alteration of order details or rescheduling of deliveries can be a hassle in the absence of intelligent scheduling capabilities. 

Real-time planning, monitoring, and connectivity with various systems such as POS, order management systems, inventory management systems, and warehouse management systems are necessary to deliver orders on time. Moreover, any change in order details needs to be updated with the rider in real-time. 

AI-enabled smart routing platforms seamlessly modify delivery agents’ routes to ensure an uninterrupted flow of successful deliveries. 

Inefficient Asset Use

Instant grocery delivery is a highly complex process involving retailers working with third parties to fulfill orders within minutes. An absence of proper coordination between the involved stakeholders results in efficiency and delay in deliveries. 

During rush hours or festive seasons, there should be enough stocks in place to meet the rising order volumes. Also, it is absolutely necessary for the operational costs to stay to the bare minimum. 

A centralized dashboard providing a unified view of all the operations is a must to keep the concerned parties on the same page with real-time updates.

No Data-Driven Business Intelligence

Instant grocery delivery is subject to fluctuations in customer demand and price volatility. This becomes a barrier in estimating and projecting a fair view to scale-up operations. Reporting and analytics is the solution for this. 

Continuous data analysis over time helps optimize delivery routes in the long run. Smart solutions track team performance and provide detailed reports to adjust capacity plans based on the analytics. 

Inventory Management 

For grocery companies, the inventory primarily consists of fresh produce. And a critical problem in managing this product is wastage. Businesses can face challenges of a lack of product quantity to meet surging demands, expired goods, and old prices. Inventory management is a tricky task, and a lack of proper planning can result in losses for your brand. 

Before we move on to discuss how on-demand delivery management platforms help businesses overcome these challenges with in-built optimization and delivery orchestration algorithms, let us discuss another crucial component of the ecosystem – dark stores.

How Dark Stores Are Changing the Dynamics of Instant Grocery Delivery 

In the age of rapid digitalization and quick commerce, satisfying the on-demand requirements of customers is a must. It has been somewhat challenging for relatively small shops to keep pace with the rise of e-Commerce. Retailers are increasingly using ‘dark stores’ for inventory management, order pick up, and product distribution to streamline the instant delivery of groceries.

Dark stores are small warehouses or distribution centers that form a highly connected network all over the city or area being served for instant grocery deliveries. All the dark stores are located close to each other or as per the customer clusters in a particular area code. They are used by the staff personnel only and are organized such that:

  • The items stay fresh
  • The items can be bagged and dispatched quickly
  • The online delivery SLAs can be met easily

Dark stores have now become a retail trend, changing the dynamics of instant grocery deliveries. Also known as a ghost store, they leverage AI-based smart tools that automate and organize the pantry (for large enterprises), reducing time and increasing efficiency. 

The use of special packaging features in the form of thermal or insulated bags and smart sorting in the farm-to-plate models has also enabled dark stores to improve the overall instant grocery delivery operations. 

How to Ensure Efficiency and Sustainability During Instant Grocery Delivery  

Delivering groceries to the customer’s doorstep in a few minutes right after they place an order is by no means an easy task. Quick commerce players need to focus on a business model that successfully executes super-fast deliveries without taking a heavy toll on their wallets. 

Many enterprises are already investing in smart automation tools for delivery and route optimization to boost their profit margins and take considerable steps towards sustainability by cutting down fuel waste. 

Below, we share some strategies that instant grocery delivery brands can adopt to make their operations optimized, efficient, and sustainable.

Smart end-to-end Operational Management

Grocery delivery companies can increase efficiency, save time, and boost revenue by implementing an intuitive solution into their delivery system that ensures smart end-to-end operational management. Delivery managers are able to execute faster, cost-efficient, and scalable deliveries, saving significant amounts of money and time.

On-demand delivery management platforms help automate every step of the operation, right from order processing to the final delivery at the customer’s destination. In addition, businesses can leverage smart geocoding engine features to avoid misrouting, reduce delivery errors, and effectively track each order. 

Automated Functionalities 

The automated instant grocery delivery platforms ensure that all operations, from order allocation to asset selection, are optimized. The orders are captured from the OMS, auto-allocated to a rider keeping multiple optimized constraints in mind, and all the required alerts and messages are triggered to relevant stakeholders.

Such effortless automation ensures that the delivery SLAs are always met. Further, all the vehicles and riders are chosen after a careful comparison of multiple optimization constraints, such as vehicle make, vehicle type, delivery location, etc.

Enterprises can create their own delivery messages and schedule them to be sent automatically at important times, such as when the order has been delivered, when delivery is in progress, and when the drivers are nearby. 

Once the order is placed, the consumers will receive a real-time tracking link through email or SMS at every critical touchpoint. 

Instant grocery delivery management software

Smart Routing 

Instant grocery delivery management platforms consider numerous parameters while planning routes for delivery executives, such as consignment load, service/delivery times, overtime constraints, etc. Intelligent solutions such as Shipsy’s on-demand delivery management platform leverages vehicle-based geofencing to optimize fuel consumption and meet sustainability goals. 

Businesses can also avoid delays and boost route productivity via dynamic order clubbing. This is extremely crucial to meet SLA guidelines at all times and keep the brand reputation intact. Moreover, optimized routes use lesser mileage and are cost-effective for ensuring fast deliveries of perishable goods.

Geo-Fencing of Drivers to Store and Delivery Addresses 

Once the rider is allocated an order, it is crucial that delivery agents duly follow pre-assigned metrics. With geofencing, store managers can keep track of every single rider via GPS-based perimeters. In case of unusual behavior, such as sudden stoppages or unexpected delays, triggers or notifications are shared instantly for quick redressal. 

A feature-rich route optimization solution also determines the most efficient last-mile delivery routes to optimize fuel waste. By increasing operational transparency, delivery managers are able to regulate overall operations down to every last detail. 

Since notifications are sent once a vehicle trespasses a geofenced location, it also becomes easier to identify instances of theft or vandalism. Riders are also alerted when they divert from the route or enter the wrong location and are guided to the right destination. Apart from preventing fuel wastage, this also contributes to enhanced fleet efficiency.  

Automated Delivery Proofs 

The instant grocery delivery management solutions come with a dedicated driver app that looks into specific delivery-related customer preferences and COD remittances and automatically uploads a digitized proof of delivery

Moreover, drivers can also collect cash payments while completing the delivery and reconcile payments at the store using the driver app. Automated delivery proofs are sustainable & transparent and ensure that deliveries are fulfilled fairly.

Specific Vehicles for Specific Pin Codes 

There are some localities where only a specific type of vehicle is allowed, such as bicycles, electric vehicles, etc. Smart online grocery delivery platforms allow businesses to orchestrate highly efficient and optimized deliveries with such constraints in an effortless manner. 

They can set these constraints and execute swift deliveries as and when required. All the optimization criteria, asset utilization rules, and routing algorithms are automatically applied for seamless operations at a large scale.

One of the critical challenges for retailers is the inability to keep pace with the sudden surge in demand from specific areas. With instant grocery delivery solutions, delivery managers can also ensure peak-hour availability by managing driver shifts via smart rosters. As the number of deliveries made on an hourly basis grows with fewer stops, it also lowers costs and boosts the bottom line.

Okay, so the automated instant grocery delivery platforms are awesome! But are all of them equally effective and efficient?

The answer is no!

Every business has a different set of use cases, and investing in off-the-shelf automation might not be the right solution every time. 

Hence, we discuss some of the key considerations for choosing the right online grocery delivery management solution.

Investing in the Right Automation Is Crucial as Well 

Investing in the right automation tools for picking, handling, and order management is vital to keeping pace with on-demand deliveries. It is crucial to choose a comprehensive and integrated platform that understands your business challenges and provides redressals for the same. 

Here is a list of must-have features you should look for before investing in an instant grocery delivery solution.

On-Demand Delivery Management 

The platform should cater to the rising order volume at all times for a superior customer experience. For instance, Shipsy’s on-demand and hyperlocal delivery platform provide business users with effective slot management, dynamic en-route order clubbing, live order tracking, etc., to meet the SLA guidelines. 

Orders must be automatically allotted to riders via instant grocery delivery solutions based on numerous parameters like location, consignment load, and rider availability. Apart from meeting the rising demands, the solution must also provide cost-efficient and scalable deliveries with seamless integration features.

Routing and Scheduling

Further, riders must be provided with the best-optimized routes to reduce the duration, and vehicle-based geofencing optimizes fuel consumption to reduce waste. Despite increasing order volume, businesses should be able to meet delivery timelines at all costs. 

Intelligent solutions such as Shipsy’s AI-enabled on-demand platform also help avoid misrouting and delivery delays with geocoding facilities.

Driver Management

The instant grocery delivery solution must keep a track of riders’ experiences and mitigate any challenges they face en route. It should facilitate enhanced driver productivity and experience with proper management of pending tasks, digitized delivery proofs, and transparent payouts. 

It should also ensure optimal availability of drivers based on their shifts. During rush hours, delivery managers should be able to seamlessly manage driver shifts by using smart rosters and ensuring rider availability at all times. 

Cash and Payment Management

For seamless management of payments and cash reconciliation, it is important that the software accepts numerous digital payment modes. Although a customer may choose online payment options, they might end up paying in cash. So, diverse and versatile functionalities are a must.

With intuitive on-demand delivery management solutions, businesses can also gain greater viability of cash reconciliation from riders at hubs post-delivery.  

Customer Experience 

Investing in the right instant delivery software should also help in delivering delightful customer experiences. A platform that allows customers to track orders on a real-time basis, reschedule deliveries, and validates non-delivery claims is vital for ensuring a quality customer experience. 

This will also enable customers to check their deliveries through notifications and ensure they remain constantly updated on the order status. 

Unlock Operational Efficiency and Sustainable Business Growth: Choose Shipsy 

Shipsy’s comprehensive management platform provides seamless integrations, intelligent order allocation, driver management, and centralized dashboards for driving efficient deliveries. They can deliver a superior customer experience via smart functionalities, such as real-time tracking, multi-channel communication, etc.

Shipsy is changing the dynamics of instant grocery deliveries with avant-garde offerings that help businesses to unlock:

  • 95% delivery mark-up in real-time
  • 45% reduction in average order allocation time
  • 77% reduction in steps for the delivery process
  • 24% increase in on-time delivery
  • 14% increase in deliveries per driver & more

For more information or to get started with the smart instant grocery delivery platform from Shipsy, please request a custom demo today!


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