How to Create a Grocery Delivery App like Instacart

The Grocery app serves as an e-commerce marketplace between a grocery vendor and the end-user. It varies in many ways from the traditional e-commerce market like Amazon, Flipkart, E-bay, etc. As grocery needs to be delivered fast on the same day or latest by the next day from the order confirmation it is important to partner with a local grocery vendor who can meet the requirement or set up a warehouse at all of the service locations.

Before moving ahead with the grocery delivery app development, it is important to understand the reason behind the increased usage of such apps. Understanding the reason behind growth will help you in developing a long-term business plan and subsequently implement the requirements within your app developed.

Why is Grocery Delivery App in Demand?

The on-demand service offering with the usage of mobile apps has transformed many industries such as Food, Grocery, Electronics, Fashion, etc. Some of the reasons behind the rise of On-Demand Grocery Delivery Service are

  • To avoid physical interaction with humans due to Covid-19 Pandemic
  • Increased Usage of Smartphones in last decade
  • Availability of cheap and fast internet
  • Increased need for comfort in shopping
  • Get better priced and promotional deals
  • Time-saving in the busy world
  • Fast checkout than a traditional shops or malls
  • An assurance on the originality and freshness of the groceries

The above points describe the reason and the below graph shows the statistics of the increased demand in Grocery Delivery App Market.

Statistics showcasing the Past and Future Demand in Grocery Delivery

As witnessed in the above graph the grocery delivery app usage is going to grow at a rapid pace at almost 20% CAGR in the coming 5 years. So surely the growth is evident and so is the need for a grocery delivery app.

Once you have analyzed the growth prospect of the Growth Delivery App it is important to decide on how are you planning to generate revenues from the platform, what would be your business model?

Monetization Methods for On-demand Grocery Delivery App

To make the delivery of the grocery to the end-user affordable there should be multiple monetization options that could help generate revenue for the app developers and also pass on some added price benefits to the consumers.

Delivering continuous price benefits to the consumer will help in maintaining loyalty in a consumer as due to competitiveness the customer is volatile towards whoever offers better price and service benefits.

1. Revenue from Premium Subscription

The grocery delivery app developers offer premium subscription benefits to the users, such as early access to the upcoming sale, fixed percentage discount on the price in comparison to non-premium members, reward points on every purchase, EMI Benefits, etc.

So depending on the better offering under a premium membership a user should have to pay fixed monthly or yearly fees to avail of its offer. The most successful example of the premium subscription monetization model is the Amazon Prime Subscription which offers price and service benefits to its subscribers.

2. Revenue from Commission

The common revenue generation model used by most of the on-demand apps is the commission model, where on-demand app developers charge a particular commission fee from the vendors on the listed products. The commission is generally fixed on a percentage basis depending on the product or the total order value.

The average commission charged by on-demand app developers generally ranges between 10%-20% which can result in a huge revenue chunk as the daily turnover of large grocery delivery apps is in millions.

3. Revenue from Advertisement

The revenue generated from an advertisement on the platforms or promoting a new vendor's product is an added monetization method for an e-commerce marketplace for groceries. The revenue generated from this source helps you in controlling the product and the majority of the delivery cost.

Advertisement opportunity on the platform helps similar businesses to target customers of certain demographics. So make sure to collect the required user information by asking for the required permissions.

4. Revenue for Delivery Fees

The revenue generated from the delivery fees does not necessarily contribute to the profits of the app owners. The delivery fees charged to the user barely helps in covering the actual delivery cost for the delivery.

Generally, delivery fees are kept low because sometimes it increases the cost of the items being purchased and so the different source revenue covers some cost of the delivery charges.

Features in a Grocery Delivery App

The successful operation of a grocery delivery app needs coordination between different aspects for the completion from the order checkout to the final delivery confirmation. The whole process is managed by an admin panel which acts as an adjoining link between the user's order confirmation, Grocery vendor or warehouse in charge of accepting the order, and the delivery agent collecting the order for transporting it to the final delivery location.

Features required in a Website or Mobile app for a User

  • User Profile & Registration
  • Customer Feedback & Review
  • Advanced Search and Filter
  • Map API for Delivery Tracking
  • Order Management
  • Online Payment System
  • Delivery Scheduling Feature
  • Update on the items left in stock

Features required in an Admin Panel

  • Activity Dashboard
  • Order Allocations
  • Assign Managers
  • Payment management to vendors and the delivery agent
  • Inventory Management
  • Manage Customers

Features required in a Vendor/Store Panel

  • Order Management
  • Inventory Management
  • Option to Order Acceptance / Rejection
  • Payment Management
  • Help & Support

Features required in a Delivery Agent App

  • Profile Credentials
  • Map Navigation
  • List of Orders to be delivered
  • Delivery Confirmation Update Tab
  • In-app calling /chat features

Advanced Feature in a Grocery Delivery App

  • Register and log in through Social Media
  • Call & Chat Support
  • Voice Recognition Support
  • AI chatbot for common problem solving

Features are the most important app factor that helps in deciding the further development technology requirement.

Technology Stack Required in a Grocery Delivery App

Hope the above-detailed requirement understanding helps you develop a grocery delivery app like Instacart to help you in developing a successful system that serves millions of users in the future.

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