At Sympl foods, we are piloting a micro warehouse model for grocery e-commerce. It’s been quite a ride as we continue to experiment and validate our hypotheses. While we are yet to reach the heights like other e-grocery firms, we intend to fly low and close to customers giving us an opportunity to understand their needs at ethnic level. Increasingly, we see grocery e-commerce world fixated with the Instacart model (using stores as warehouse) forcing them to think like traditional grocer or a delivery service. We are probably one of the few looking to try unique approaches to an end to end model for e-groceries.
Here are few of our hypotheses and early feedback…
Touch and Feel Vs Try and Experiment: Most oft touted reason not to try e-groccery model is the the “touch and feel” argument. Entire world of trade is based on a simple fact of trust, on an acceptable barter. Local restaurants to Amazon, all had to get customers to try, test and Trust. E-Grocery isn’t any different
Hypothesis 1: Behavioral Barrier is a mountain to climb, but consumers learn fast, especially when there is a need. The key to successful grocery e-commerce is understanding that consumers do not research, but experiment at home.
Our Focus – Ease of finding & buying products, new and repeat.
Challenge – The lack of or reduced impulse purchase behavior of consumers.
There are tons of articles on e-groceries but not many talking about SKU breadth complexity. It’s like YouTube, with choices & selections for every taste. Unfortunately, groceries are viewed as essential chores for consumers, often leading to an uninvolved purchase model.
Hypothesis 2: Catalog complexity is a deal breaker for consumers as it adds mental strain. While longtails are great for occasional buys, most consumers’ grocery world consists of 100 odd core items. They don’t care that you carry thousand of SKUs.
Our focus – Solving for the catalog complexity at a user level – Elimination, Personalization, Recommendation.
Challenge – while solving for consumers’ core needs are relatively straight forward, creating a sustainable approach for longtails is difficult as a micro-warehouse (bootstrapped) startup.
There is a lot of buzz around store+ model, using a store as a warehouse for the online channels. A sound advice would be to think again.
Hypothesis 3: Last mile cost spills and supply-demand kills. The real challenge for a grocery e-commerce startup is in matching Supply and Demand (at a location, user and SKU levels). Cost of operations in a time sensitive grocery ecosystem is high when you operate two independent supply and demand networks.
Our focus – not thinking like a B&M store or just a delivery service. Going beyond prediction, understanding supply patterns and creating/eliciting explicit signals from consumers on demand.
Challenge – while consumers have micro real time needs and planned needs, today it’s treated the same at a store level. Getting to understand the expediency of the need is an important signal but requires a big behavioral shift for consumers.
Every choice you make as a e-grocery start-up has an impact on customer perception and trust. A simple choice of what devices to operate on has big impact on earning the consumer trust. (more on some of these coming soon)
At Sympl, we challenge the status quo and question every aspect of the grocery ecosystem. We think like a farmer, a store, a distributor, a publisher and a consumer. We test out our hypothesis through numerous micro experiments, such as micro-marketing, demand cluster generation, product and price variations, display catalog effectiveness etc. The core to all our experiments can be summed up in a single world – unStore.