Business Model
Running head: E-Grocery business model – group project 1
E-GROcery business model – group project 8
E-Grocery Business Model
Chathuri Samarasinghe
Tharangini Puvvala
Vijay Bula
Sullivan University
CSC560 Electronic Commerce and Intranet Development
May 5, 2019
E-Grocery Business Model
In the past few years, the online grocery shopping industry is growing with consumers rapidly along with expansion of digital world. With e-commerce expanding throughout the global market, the demand for online grocery stores has also been increasing. Companies like AmazonFresh, FreshDirect in the US have opened a platform for the companies to sell groceries to their customers with a single click. Many products that are being sold on online platform, that were considered to be impossible to convert for online shopping. With proper technology usage, the companies can sell perishable goods online and compete the traditional stores.
Company Background and evolution
Fresh Grocery, Inc.
Our company, Fresh Grocery, Inc. is an online e-grocery store business that will be launched in December 2019. The online platform will have a wide range of both durables and non-durable goods, organic foods, fresh vegetables and fruits, and basic groceries at affordable prices. The online platform will have products from different brands, so the consumer can choose and buy. The company will be based in Chicago, Illinois with multiple suppliers. This is a privately-owned business, that is owned by Jane Doe (CEO), John Smith (COO) and Susan Smith (CFO). These executive committee members have hired, CTO – Bill Daniels to handle the design and build the website for their products and services.
Vision
The company’s vision statement is to become a leading online e-grocery store in the US and to establish a one-stop and click online grocery shopping store in the US.
Mission
The company’s mission statement is to establish an online platform to sell groceries from major manufacturing companies/brands at affordable prices to the customers. The company intends to expand their customer target groups throughout East Coast.
Organization Structure
The company was co-founded by Jane Doe (CEO), John Smith (COO) and Susan Smith (CFO). The executive committee have hired, CTO – Bill Daniels to handle the design and build the website for their products and services. In addition, the company will have to hire below staff for daily operations:
· Strategic Manager
· Human Resources and Admin Manager
· Merchandize Manager (Supply chain management)
· Sales and Marketing Manager
· Development Team (online website development)
· Project Management Team
· IT Support Team
· Accounting Team
· Customer Care – Call Center Team
· Legal Team
Product line & services
The company will sell a wide range of goods from top brand companies on their shelves in the state of Illinois. The online platform will have durable and nondurable goods that include the below:
· Fresh organic vegetables and fruits
· Fresh organic dairy products
· Other food items
· And groceries
Business model
Initial step for our company would be tie-ups with the local whole sellers or manufacturers and establish an advanced online store to make sure the customers are able to select and purchase the products efficiently. Once the orders are placed, the website communicating with the suppliers and ensuring the goods are delivered on time. The company’s primary revenue model will be the online grocery store through monthly/yearly customer subscription, and service charges. Subsidiary revenue business model – company can also earn revenue by allowing brand-company’s to post ads on the website.
Technology – Website
The project management team will have to capture, the business and system requirements to implement the suitable online grocery store. The website should be user friendly, buyers and sellers should be able to interact with each other, provide additional features like – subscription for monthly deliverables, repeat orders, discount prices to attract the customers and turn them to loyal customers.
Supply chain management
The company should build a strong and loyal relationship with their suppliers who are local wholesalers, farmers that help to attract more customers by delivering fresh and organic products.
Customer service
The company will have to maintain a strong relationship with their customers and gain trust, loyalty. In order to do so, the company should provide them a user-friendly website, controls to subscribe or repeat the same orders weekly or monthly, provide same-day or 1 or 2-day delivery options, discounted and affordable prices.
Legal, privacy and ethical aspects
Being an online store, there are high chances of data breach, user identify theft, and the online stores are responsible for their customer’s security. The company should take appropriate precautionary steps to prevent any data breach, additional layers of protection like a firewall should be developed. The company should adhere to all online marketing laws, regulations, rules, product regulations (if any).
Current E-Commerce models utilized by the company
Our company will use B2C (Business-to-Consumer) electronic marketplace model. B2C transactions are the retail transactions of products or services from businesses to individual customers and electronic marketplaces are platforms where businesses or individuals can list their products and services and customer can purchase them online (Turban et al, 2015). We will have contracts with local organic food producers, and they will be able to register and list their products in our website. All these grocery items will be presented to our customers in an easy to search online catalog in our website. Customers will be able to register, search for and add grocery items to a virtual shopping cart, choose delivery date and time frame, and buy online using various payment methods such as credit card, debit card, PayPal, Venmo, etc. or save for later. The customer orders will be received and filled by the sellers/food producers and our delivery team will pick-up, inspect for quality and accuracy and deliver the grocery to the customers. (FATbit, 2018)
Figure 1: Marketplace Model (FATbit, n.d.)
Technology Advancements and Impact of Technology
Mobile applications that will let customers use their mobile phones to browse, buy and track orders, voice ordering, ability to create a grocery list and show different available options to buy, shoppable recipes which will add the ingredients to your shopping list according to the recipe and the quantity, automated invoice systems between company and merchants, location based mobile computing that will enable customers to see where their delivery is at and the approximate time it’ll reach them and give them exclusive offers depending on customer location, chatbots for customer service, different payment options, post-service surveys, unattended deliveries via a one-time-passcode system for residences or lockboxes with smart locks, and data analytics to help improve website, services and products are some of the technical advancements that help to evolve B2C e-commerce marketplace business such as ours. According to the Progressive Grocer (2019), autonomous delivery vehicles is the future of online grocery delivery. For example, Kroger partnering with Nuro piloted a grocery delivery program that successfully used Nuro autonomous vehicles to fulfill online orders in Arizona and will be expanding it to Houston.
References Turban, E., King, D., Lee, J., Liang, T. & Turban, D. (2015). Electronic commerce: A managerial and social networks perspectives. Upper Saddle River, NJ: Prentice Hall. FATbit (n.d.). Your grocery delivery website will fail without these script features [web post]. Retrieved from https://www.fatbit.com/fab/online-grocery-delivery-platform-will-fail-without-these-clone-script-features/ FATbit (2018, December 5). Setting up online grocery business in 2019? Here is what you need to know [web post]. Retrieved from https://www.fatbit.com/fab/setting-online-grocery-business-2019-need-know/ Retail Customer Experience (2019, January 30). 5 technologies primed to transform the grocery shopping experience [web post]. Retrieved from https://www.retailcustomerexperience.com/blogs/5-technologies-primed-to-transform-the-grocery-shopping-experience/ Progressive Grocer (2018, December 14). What to Expect in Grocery Technology in 2019 [web post]. Retrieved from https://progressivegrocer.com/what-expect-grocery-technology-2019
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