Market research on consumer expectations and perception mapping for online grocery store in urban cities

Abstract

India is going through a phase of mammoth growth in e-commerce and organized retail sector. This has made the online grocery stores an attractive industry for entrepreneurs and investors to invest in. While the industry has seen a few successful players, there are a few instances of failures. The inability to succeed has been attributed to supply chain inefficiencies and inability to meet consumer needs and expectations. This analysis covers the consumer perspective of online grocery stores and tries to identify the gap between consumer needs and online retail offerings. Though there is considerable savings in terms of real estate (no stores within cities) when compared to traditional retail, establishing a reliable supply chain and delivery network stands critical for online grocery retailers. Scalability is another important determinant of the success of the online grocery stores. From the consumer’s perspective, there is still a lot of hesitation to go online for grocery shopping due to the lack of “touch and feel” element. Despite online grocery stores guaranteeing freshness and quality, it is evident that it will take some time for the Indian shopping behavior to change. The interview with Mr.Vipul Parekh, co-founder of Bigbasket.com, a successful online grocery store in Bangalore gives a field view of what it takes to be successful in this industry. The importance of quality of products delivered and an efficient supply chain system to back a wide variety of product selection are the two most important factors. Interviews with existing as well as potential customers help us understand the major expectations from customer end. We also try to find out what hinders a potential customer from going online and what can be done by online retail stores to address these issues. Next, we analyze the purchase baskets of offline customers and compare it with online stores. This helps us understand the product selection availability in online stores. We compare this across two different stores, bigbasket.com and atmydoorsteps.com, and understand the offerings in both the stores. We also compare the user friendliness factor across these two stores. From these we find that there exists a gap in terms of the product selection which the consumers need and what the traditional stores offer and what the online stores offer. Bridging this gap will require considerable amount of scaling in terms of vendor management capability from the company’s side. Indian demographics shifting towards increase in age group of 20-35, increasing disposable incomes with dual income families and growth of e-commerce might make online grocery attractive. It is too early to decide if it is providing sufficient returns to the company and investors and required value and convenience to the consumer.