7 Online Grocery Delivery Challenges (and How To Overcome Them)
Most American consumers — some estimate as high as 72 percent — purchase groceries online at least some of the time. If you aren’t offering online grocery delivery, your store is falling behind.
However, offering online grocery shopping is easier said than done. When you don’t have the resources and staffing of a large grocery store chain, trying to overcome the online grocery delivery challenges and run profitable grocery e-commerce for your store can feel overwhelming. But with the right tips and tools, it’s far from impossible.
This post walks you through seven online grocery delivery challenges. For each challenge, we’ll give you a tip for overcoming this pitfall for your store and running a profitable, scalable grocery e-commerce.
Online Grocery Delivery Challenges: Are They Worth Overcoming?
Before we dive into the top challenges you may encounter when offering online grocery delivery, let’s answer a critical question: Is offering online grocery worth it?
Online grocery shopping has skyrocketed since 2020. Over half of customers now shop for groceries and other essentials online at least some of the time, with adoption rates growing fastest among millennials and Gen Z. The demand for online grocery delivery is present, but is it worth overcoming the hurdles for a small, independent grocery store?
The short answer is: Yes.
Offering online delivery allows you to reach new customers and offer the convenience of online shopping to your current customer base. Branching into e-commerce allows smaller grocery stores to compete with giants like Walmart and Kroger. What’s more, the steady order volumes associated with grocery sales offer consistent income you can count on to support your online channels.
Grocery margins are infamously razor-thin. Neglecting to explore and offer online grocery options risks alienating younger demographics. Smart retailers don’t want to risk losing their Gen Z and millennial shoppers. Though offering online grocery can feel overwhelming, you can offer these options in your store if you make the proper preparations and take the right precautions.
Should Your Grocery Store Offer Delivery?
Let’s review the pros and cons before exploring how to overcome online grocery delivery challenges in your store.
Pros:
- Meet growing customer expectations of convenience
- Retain old customers and reach new ones
- Compete with large retail chains
Related Read: [GUIDE] How To Open a Small Grocery Store in 8 Steps
Cons:
- Operational complexities
- Small margins can make these complexities challenging to solve
1. High Operational Costs
The first challenge many grocery retailers face when offering online grocery delivery is the operational cost of adding this option. Launching delivery options requires labor and material costs, which can be expensive per order without the scale of shoppers larger retailers enjoy.
Employees must pick items efficiently while checking for accuracy, quality, and special instructions. Delivery drivers must calculate route density correctly to balance capacity, mileage, and drop-off times, which is tricky without historical data.
Related Read: Your Point of Sale Data Is a Goldmine. Here's How To Make the Most of It
You must also invest in supplies like insulated bags and gel packs, which can add up, too. Start slowly, working to refine your processes and build up delivery offerings slowly rather than diving in headfirst without the proper data and processes.
Tip: Initially focus on-demand delivery in nearby high-density areas while perfecting operations. Slow scalable growth is key.
2. Logistical Complexities
The logistics behind profitable grocery delivery are extremely complex. You must implement the right software solutions to calculate sequencing, product picking, and delivery times appropriately. Customers expect delivery services to promise and meet narrow delivery windows, a service that is especially critical for perishable products that must be delivered, received, and quickly refrigerated to prevent spoilage.
Related Read: Creating Efficient Grocery Store Pickup Lines: 5 Tips
Finding the right balance between order accuracy, freshness, and speed remains challenging. Again, starting small and expanding your delivery radius and offerings over time can help you effectively launch your online delivery service without too much stress.
Tip: Invest in advanced route optimization software integrating real-time external data from weather to traffic.
3. Potential for Order Errors
Accuracy is important for all retailers, but is especially critical when offering grocery delivery. Special instructions around allergies or preferences add further complexity — and increase the importance of getting things right. Incorrect items or unsatisfactory substitutions quickly generate customer complaints and store credit offerings that can eat into profit margins. But how can you minimize errors efficiently?
Double-checking orders requires additional labor while increasing delivery times, but it may be worth it, depending on your processes. Another best practice is to be diligent about sealing completed orders and ensuring those orders aren’t compromised post-packing and pre-delivery.
Tip: Add barcode or QR code confirmation scans during staging and load-out to increase customer visibility and minimize errors.
4. Keeping Items Fresh
Maintaining consistent cold temperatures throughout delivery is vital for quality and safety. Even with short, 30- to 60-minute delivery windows, tightly managing multiple cold chain variables across packaging areas, vehicles, and other delivery stages can be challenging.
Related Read: 5 Essential Reports To Manage Your Grocery Store
Even if your staff is nearly perfect, partial credits or refunds from just a few compromised items quickly eat into your thin margins. Be sure to use high-quality insulated carriers at every stage of the delivery process. Consider confirming order condition upon delivery to ensure you aren’t met with unpleasant complaints.
Tip: Invest in properly insulated carriers and provide feedback prompts to customers on whether items arrived at the proper temperatures.
5. Fluctuating Order Volumes
Just like your brick-and-mortar foot traffic fluctuates by day and time, your online orders will be inconsistent over time. Learning those daily peaks and lulls can be challenging, especially in the beginning when you do not have historical data to lean on. Carefully scheduling staff and drivers can feel impossible in these stages.
Surges from weekly promotions further complicate planning. Your point of sale system can help, providing you with data regarding real-time sales trends, giving you the information you need to start planning staff more effectively.
Tip: Offer loyalty rewards or discount codes for selecting Tuesday through Thursday delivery slots to spread volume throughout the week and make staffing easier.
6. Protecting Profit Margins
We have mentioned profit margin challenges at several points in this post already, but it’s worth diving into this challenge more directly. Grocery stores already have thin margins, but after operating expenses, online orders cut those margins even slimmer. If you outsource delivery to a delivery app, these companies generally take 25 to 35 percent commission on each order, which can heavily cut your margins.
How can you mitigate these challenges and make online grocery delivery profitable for your business?
Start by monitoring profit and loss statements by zone and delivery region. This data will help you determine your most significant costs and opportunities, helping you understand where you can improve your margins. You may want to increase prices on online orders, but use this method carefully, as significant price markups risk losing customers familiar with your in-store pricing.
Tip: Offer monthly or annual delivery subscriptions to drive consistent adoption and offset per-delivery expenses.
7. Fierce Competition
Finally, we must consider one of the most significant challenges across channels and industries: fierce competition. Behemoth retailers like Walmart have the resources and data from thousands of locations to optimize delivery and slash prices, taking losses in some stores while maintaining steady profits overall.
Though delivery apps can be your ally in offering online grocery delivery, these apps can also pose a threat to your store if you aren’t partnering with them. How can you stand out from the competition without wrecking your profit margins?
Lean into what makes you special as a local retailer. Spotlight locally sourced items or other options available only in your store to remind customers why your store offers better service and selection than the giants.
Tip: Curate delivery menus promoting locally sourced meats, produce, and specialty items the big chain stores lack.
Overcome Online Grocery Delivery Challenges With the Right Tools
As we’ve explored, offering online grocery delivery is a strong way to position your local grocery store for success now and in the future. However, you need the right systems and tools in place to avoid the pitfalls that can drain your profits and derail your e-commerce efforts. The key to managing your online grocery delivery options? Implementing a point of sale system that integrates with strong e-commerce grocery platforms.
Enter: Markt POS.
Our advanced POS suite seamlessly syncs your inventory data to connect your e-commerce and brick-and-mortar efforts. We partner with e-commerce platforms like Instacart, Local Express, and Mercato to optimize your online grocery offerings — without destroying your margins.
Check out a demo of Markt POS today to see how our all-in-one point of sale solution can help you with inventory management, online grocery, customer loyalty programs, and so much more.
