Order groceries online from local or chain stores and get it delivered on-demand!
Business overview
| Location | Kingston upon Thames, United Kingdom |
|---|---|
| Social media | |
| Website | grocemania.co.uk |
| Sectors | Food & Beverage Digital Mixed B2B/B2C |
| Company number | 09992207 |
| Incorporation date | 8 Feb 2016 |
Idea
Introduction
Since 2001 there has been a growing number of online marketplaces & logistic services in the UK's fast food and restaurant markets, such as JustEat and Deliveroo. However, to our knowledge, there has never been such a service in the UK indepedent-grocery industry before. Currently, many of the most popular supermarket options start with a £40 minimum order for one-hour slot delivery, plus an occasional delivery fee.
Grocemania believes it should be easy to order groceries online from any independent and chain store and get the order delivered on demand without spending any extra. Grocemania aims to disrupt the current online marketplace by delivering from local grocery stores, straight to the doorstep, on demand with only a £2.50 Delivery Fee!
Our platform allows customers to browse and buy from local stores online and have it delivered by local couriers in as little as one hour. Unlike some of the existing delivery options, we have over 20 stores in one app, only a £10 'minimum order' and a flat £2.50 fee.
Intended impact
Our founder, Askar moved to the UK almost 8 years ago and started studying Business and Web-Development while working at two different part-time jobs. Having absolutely no-time for shopping he became a regular user of delivery businesses like Deliveroo. But one day, Askar wakes up ill with no-food in the fridge and decides to order some groceries online to make a soup. He finds out that:
1. There was a minimum order of at least £40 with existing providers.
2. He found no option to order from local food specialists.
3. Delivery fees start with £4.99 per drop and customer service was generally poor.
Inspired by Deliveroo's success, Askar and his partner Ali decided to create a landing page to study the market demand for cheap and fast deliveries. We soon realised there was a demand for the service, started receiving more and more orders and also a number of shops willing to join the platform!
Substantial accomplishments to date
2016 - 2017.
1. The idea was born and the company registered.
2. Reached the Voom 2016 Semi-Finals where we found additional support for the business.
3. Completed Accelerator Academy course to develop the business model.
2017 - 2018.
1. We have been live and running since August 2017 in Surrey and discovered some great traction!
2. 350 users have joined our platform.
3. Signed over 20 independent and chain stores to our platform.
4. Reached the first page of Google organic searches for keywords like grocery delivery London, grocery delivery Kingston etc.
5. Gained over 10,000+ followers across all our social media channels.
6. Grown our mailing list newsletter to 1,500 recipients.
In the past 3 months, we've performed over 900 orders with an average basket of £24.80 and helped local stores to generate over £27,000 of online sales. Customer Retention level came up to 55%, which is a good indicator of the need for this business.
Since the launch, we have been noticed by some prestigious publications.
1. The Grocer.
2. CITY A.M.
3. The River and more.
Monetisation strategy
Main components of our revenue come from users in the form of 'Fixed Delivery Fee' of £2.50* and a 'Commission Fee' of 10% from 'Partners' for each order made through our platform, with the average order being around £24.80. Therefore, one typical order will produce £4.98 for Grocemania.
Currently, our deliveries are outsourced through an exciting agreement with QuiqUp. We feel that this agreement allows us to scale fast and grow the volume of orders before introducing our own delivery staff.
The average fee with QuiqUp will be £5.25 (per 2 miles), so to support business at this stage we plan to raise our Delivery Fee to 3.50. In the future, we plan to hire our own self-employed drivers and pay them a wage of £8 per hour.
*Delivery Fee' of £2.50 - from local shops. Delivery Fee' of £3.99 from the chain stores.
Use of proceeds
Following the successful launch in Kingston and Barnes in 2017, supported by StartUp Giants, Grocemania is now raising funding to fuel the expansion of its service across London & Reading through marketing, sales and product development.
• Growth: We plan to keep on signing new stores across the whole of London to access new customers in different parts of the city and offer the service. We also plan to run aggressive marketing campaigns in every new area we enter using Google and Facebook ads.
• Team: Recruit into key roles to support increased volume (customer support, operations, marketing, tech & testing, finance).
• Product: We will continue to enhance our product and operational tools to maximise the joy & simplify the customer experience. We intend to introduce new features like a 'Personal Dashboard' to our partners.
Market
Target market
The UK Grocery Market is forecast to grow by 15% between now and 2022, giving it a value of £213 billion, according to the latest forecasts by grocery research organisation IGD. (IGD UK Channel opportunities: UK market and channel forecasts 2017-2021).
However, at this stage, our primary targeted sub-markets are ‘Other Retailers’ and ‘Convenience Stores’, which sums up to a 28% (51.8bn) of the total grocery market. Those are the shops who we believe cannot afford to have their own delivery infrastructure and working with us can benefit both sides. We are also developing a strategy to engage with "Supermarkets" and "Hypermarkets" where we plan to place our personal shoppers in each location to fulfil orders and we intend to raise the delivery fee to £3.99 for these chain stores! Our customers currently include mothers, local students and professionals.
Characteristics of target market
Online groceries is the fastest growing segment of the grocery industry, which has grown over 120% in revenue over the past 5 years.
IGD expects over 60% of shoppers will choose to shop online in the next 2 to 3 years.
More and more on-demand options are popping up, which are often provided by existing retailers such as Tesco, Sainsburys and Amazon, but we believe they still have lots of limitations.
To our knowledge, there is an absence of an online marketplace for independent retailers in London. We've identified over 40,000+ independent retailers, artisans and local convenience stores who we believe would fit our business model in the UK alone.
Marketing strategy
We intend to continue our fast growth by gaining depth of coverage in our existing markets and launching new ones rapidly.
Grocemania uses a combination of direct marketing to raise awareness and highly targeted online spend (paid search, paid social, display etc.) in order to find and convert our audiences. We believe in adapting our strategy from city to city, constantly testing and learning to gain efficiency from our marketing spend. We also place our branded stickers on the windows of our partners and leave flyers and promotions in store in order to access the existing customer base of our partners.
A data-driven approach to marketing ensures that key metrics are tracked and measured accurately in order to aim for the highest ROI in every campaign. We are keen to hear feedback from our users in order to keep improving our custom experience and satisfaction rate.
Competition strategy
We have indirect competition arising from players like Ocado, Tesco & Sainsbury's. However, as mentioned before, many of these are existing retailers with high spending required for one-hour deliveries. Those retailers have significant costs in running and maintaining their delivery infrastructure. Meanwhile, we believe that we can help customers by minimising the costs of delivery and performing orders below the average minimum order value, at the same in-store price.
We also have direct competition from other grocery delivery companies such as Beelivery and HomeRun. Our differentiator is that we focus primarily on independent local grocery stores, as opposed to larger supermarkets.
We have designed our technology to add and create more shops as the business grows. Our delivery agreement with QuiqUp and signing on a number of Londis stores is a positive move towards scaling the business across the whole of the UK.
We aim to provide customers with the best independent grocery delivery service there is in the market with cheap fares!
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