If you are looking to enter the world of ecommerce, you might want to consider heading in the food direction. Don't let the food industry scare you. While opening up and running a successful restaurant or food store has its barriers, that doesn't exactly mean the same for an ecommerce food start up. Food trends indicate extreme potential for this fast growing industry. Between online grocery shopping, delivery services and specialty food stores, the number of customers continue to escalate.
Both mobile and online food and grocery startups have taken off around the globe. According to research by CB Insights ecommerce food startup space saw a five-year quarterly high of $688M in Q3'14 go towards food startup funding. This was exactly one year ago, imagine the statistics we will see by the end of 2015! Question is, what has caused these numbers to soar?
Have the two words "busy" and "technology" come to mind? As of 2015 over 40 percent of the world uses internet. That comes to over three billion people, out of those three billon, two billion of them are also using smart phones. How is this for a playground of opportunity?
The number one reason why most people shop online is due to convenience. A busy lifestyle often means time constraints on running errands or shopping for leisure. Think about how much time you spend a month going back and forth to the store to pick up groceries? The average person frequents a grocery store 4.8 times a month. Between transporting and shopping, that eats up quite a big chunk of time.
Now you are just a few clicks away from getting all your food shopping done whether you are sitting at home on your couch or on your train commute home. Many startups are now focusing on concierge shopping along with subscription prepared meals. We discovered in a recent survey that most people, especially millennials love using online services due to their busy schedules and desire to try new foods. "I'm a huge fan of Instacart and recommend it to everyone. It's extremely convenient and quick. Not to mention, they deliver champagne. What more can I ask for?" - Loren, 30 San Jose, California
Unfortunately having a nice looking ecommerce site isn't enough to achieve success. Having the proper logistics and technology should be your top priority to ensure customer satisfaction. There are a few main factors to consider such as:
Making sure you have a great packaging and shipping system: Unlike other products sold online, proper packaging and quick delivery for perishable foods is crucial to running a successful business. Any kind of perishable food item must be shipped over night or at least within 48 hours. Many of these items sold are shipped as gifts therefore you also need to consider the extra cost of making sure your packaging looks presentable. If you are looking to cut your cost, don't let it be with this. There are other areas you can easily save money on without risking your entire reputation.
Implementing real time inventory and account information: Every online retailer needs a reliable ecommerce inventory management system. This will allow you to receive up to date product insight, response and permits your sales team to have authority over your current inventory levels. Synchronization, integration and automation will be key to successfully managing your system. The same should apply for regularly monitoring your customer account information. Not only will this help you from a logistics perspective but will enable you to further understand what's most popular amongst your customers.
Applying the appropriate shopping cart: If it takes your user more than a couple seconds to make their purchase, you can bet they'll go looking elsewhere. Having everything in one place and easily accessible is extremely important for customer retention.
Subscription Methods by Payment Gateways: Make sure your users are able to choose between several payment methods when it comes to check out. Allowing your users to choose from a variety of credit cards and online payment services is mandatory to accommodate all users. If you want to step it up a notch consider placing a subscription method to better track your customers. Look into services such as Stripe, Braintree, and Venmo to get started!
Once you have your technology in place, your next priority should marketing! While food ecommerce may be a hot space, it's still an extremely competitive market. Popular ways to market your food ecommerce sites include buyer clubs, online recipe videos (depending on your product/service) and social media campaigns.
Imagery is extremely important for food ecommerce vendors. Social media networks such as Instagram and Pinterest play a huge role in marketing food. Like everything else in retail, the more enticing your product looks the higher your sales will be.
Don't be intimated, if you have an idea now's the time to act! If you want to test your idea try raising funds through a crowdfunding platform to see the type of interest you can generate. According to several studies we can expect to see the e-food world continue to grow rapidly. Logistics remain a challenge but certainly not a show stopper. What do you have to lose?