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Implement a Profitable eCommerce Program: Learn from Dash's Market

Independents can successfully operate profitable online shopping programs by utilizing best practices to minimize costs and maximize new revenue. These actionable recommendations help retailers achieve profitable growth with eCommerce.

Dash’s Market is in the highly competitive Buffalo suburbs. They got involved in eCommerce starting in 2014 to initially stake out their ground in their community. Initially, their program was looked at as an investment in their long-term customer acquisition and retention plan. Within 6 months of their launch, they were exceeding their internally set goals by up to 100% in a given month. Midway through their second-year, they began to realize profits from their program.

Independent grocers have long considered online shopping simply as an alternative way to buy their products. What has become clear in the last few years though is grocery consumers recognize online grocery shopping as providing a significant value to their lives beyond acquiring the food itself. They value the time savings and convenience eCommerce provides, as well as the reduced stress and increased personal independence included with the extra time they acquire.

Retailers focusing their eCommerce marketing budgets on promoting these values will have higher shopper engagement and purchase rates than those who focus on the quality and price of their food items alone. This provides a double benefit for retailers: They can acquire new customers by implementing online shopping, and they can earn additional revenue from those shoppers in exchange for the added value being provided.

Dash’s Market has developed best practices to increase online shopping revenue and reduce their operating costs, which can be applied by retailers nationwide:

  • Price the Service Effectively. Studies have consistently shown two-part pricing, which has a low fixed fee and higher item prices, is more appealing to consumers than traditional pricing, which relies upon a single large fixed fee per order. This method is used by leading independents as well as PeaPod, Amazon, and Instacart.
  • Offer Delivery. For retailers operating curbside pickup only, adding delivery will increase online shopping revenue by 50% - 150% depending on the trade area. Delivery will also not be a loss leader if the pricing is set effectively.
  • Reduce Out of Stocks. The top 10 out of stock items at a single retailer can cause missed revenue of over $20,000 per year for online customers, and $250,000 for in-store shoppers looking for those same items. Use your online shopping data to identify and address out of stock issues.

To minimize costs, retailers should focus on reducing labor costs. This can be achieved in two ways:

  • Utilize a Completed Transaction Feed to bypass the checkout lane for online orders by sending the transaction directly to the POS back office without having to ring it through the lane. This reduces labor costs by 30%-40%.
  • Utilize the eCommerce provider’s shopper support team to field calls about website passwords, pickup slots, and other time-consuming tech related questions, instead of having this time be spent by the customer service counter staff.

"eCommerce is a great way to add to your company sales without the additional cost of brick and mortar"

-Mark Mahoney, EVP, Director of Operations, Dash's Market

Since launching eCommerce in 2014 Dash’s has served tens of thousands of customers, increased their monthly cash flow including bottom line profits, expanded their delivery area twice, and received Progressive Grocer Independent’s Retailer of the Month cover story recognition in June 2016.

If you are a retailer with a desire to implement a profitable eCommerce program at your grocery store, please contact or call us today at 1-855-ROSIENOW (767-4366).

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