Co-founder and CEO of Local Express.
There is a web of e-commerce options that you can use to build out the online side of your grocery business, but how can you make sure to pick one that isn’t more interested in your data than you?
If you’re a small business that depends on your online revenue stream, you can’t have a third-party provider eating into your hard-earned profits. Worse yet, most third-party delivery service apps don’t let business owners access their historical customer purchasing data — which means sales made on these platforms are mere referrals, not your customers.
Businesses should retain their customers and hold the data they generate through their sales and marketing efforts. Your marketing efforts may be feeding leads to outside platforms that then turn that information around and use it to sell ads to other businesses you didn’t even know were your competitors. Companies that haven’t signed a contract with a third-party delivery app should consider the following advice before pulling the trigger on any big decision.
Look for platforms that let you access your customer data.
You must make sure that you — and not a third party — retain your customers. I can’t stress this point enough. If you’re using a delivery app that doesn’t give you access to purchasing data belonging to each customer who shops with you, you’re holding yourself hostage in the long run.
Without access to your own data, you can’t create tailored marketing campaigns that service your most loyal customers — these are key recurring customers who are the core of your sales. You can lose out on valuable insights that allow you to grow your business in ways that also allow you to compete with giants and keep customers shopping with you.
Think about it like a chess game; you’re going to give up your queen the minute you let another company take possession of the valuable insights created by all of your dedicated marketing efforts.
Look for platforms that don’t make you stick with one delivery network.
Have you heard the story about the pizzeria owner who found out Doordash was selling his pies online for $16 when, in-store, he was selling them for $24? Long story short, he bought a bunch of his pizzas with his own money and netted a profit. He’d pay Doordash $16 for the pizza, and Doordash would pay him $24. “Pizza arbitrage,” as he called it.
The fact of the matter is that many Silicon Valley unicorns use venture cap money to expand their base and gain a substantial portion of the market. Once these companies are the majority service providers, they can simply raise rates until they hit profitability and can pay back their investors. If you end up stuck with one of these services and they raise rates on delivery, how can you possibly negotiate? They brought you all of your online sales, so what are you going to say?
If you end up in this scenario, then either you’re stuck losing your profits, or your customers end up paying higher prices. If you choose to leave one of these services, then you end up competing against yourself. Remembers, they own your data. Just because you leave them doesn’t mean they won’t hang on to it. When someone searches your name after you’ve left, guess who pops up? All of your competitors.
If you stick with a platform that lets you pick your own delivery network, you can avoid rate hikes when they occur. You can also set your own delivery schedule based on your own employees. For instance, let’s say you have a nephew to whom you gave a job making deliveries for your business. He shows up after school at 3 p.m. on his moped and takes orders to people around the neighborhood. He does a good job, and in a couple of months, you hire his friend. Now, from 3 p.m. to 8 p.m., they deliver your orders, but for the rest of the day, you use a driver from a different service. Again, third-party services should be used to augment your business to perform better, not throw your entire operation off-kilter.
Ways To Prepare For The Shift Online
If you’re an independent grocery store owner or manage the IT needs of an enterprise seeking to make the shift online, you may not think that you need help. However, you also shouldn’t feel like you have to do everything on your own.
The best way to ensure a smooth transition online is to go slowly and not try to rush the process. Start by putting your most popular items online and go from there. Make sure you set aside the inventory you want to devote to your online-only sales. Customers hate it when they pick an item from your online store and that item is unavailable for delivery. As your store goes fully digital, you might need to hire a full-time online inventory manager to take care of things on that end.
As you scale up operations, you can also work to adjust your marketing strategy accordingly. If you market primarily with flyers, use digitized versions of the flyers before launching an all-out online advertising campaign. Most importantly, you should focus on finding a partner you can work with who can help you to successfully operate your online channel and not disappear once your e-commerce store is finally online.
Don’t choose a platform; choose an ecosystem.
Your messaging, marketing, online storefront and customizable delivery app should all be in one ecosystem that integrates with your in-store point of sale (POS) system if you want to truly benefit from these technologies. Choosing your ecosystem means selecting the platform that is built with your success in mind.