How Much Does On-Demand Grocery App Development Costs?

Sudeep Srivastava September 9, 2022
grocery delivery application development

The ease of getting your everyday needs delivered at your doorstep is a heaven that is not just appreciated by the many customers who order them on-demand but also a myriad of entrepreneurs who wish to be a hotshot in the flourishing market.

And no matter what class these aspirational entrepreneurs belong to, the question that they all have in mind is how much on-demand grocery delivery application development costs. One which we will be dissecting today.

But before that, what exactly is it about the grocery delivery market that is attracting businesses and investors (as we will see later) to them?

Well, for many, it is the business model that the many types of grocery apps operate within.

business model

For a domain whose business model looks as easy as 1-2-3, the attention that the market is getting from a world full of customers and investors is remarkable.

The positive outlook that the industry is witnessing – in terms of the projected growth chart – from the ever-increasing user base and the entrepreneurs willing to enter the flourishing domain is partially the doing of user demand and partially the doing of the increasing funding rounds that the domain is seeing – something that is also carrying an indirect impact on the cost to develop a grocery delivery app.

Either way, the number of players entering the domain is, in fact, growing at a high rate, with the top guns’ position changing every passing day. Well, in the present day, if you enter the domain, your personalized on-demand grocery delivery app will have to compete with –

Top Layers On Demands Grocery Delivery Market

With the market scenario now groped, before we move on to the sections where we get you acquainted with the ground level parts of starting your on-demand grocery business and get you an answer to Cost of making on-demand grocery app, let us first give you a peek into the market you are going to enter from the investments and fund front.

Recent Expansion and Funding in the Grocery Delivery Industry

Well here are the expansions and fundings that have happened in the grocery delivery market in recent times –

  1. The supermarket chain, Lidl has expanded its on-demand grocery delivery service to Ireland (earlier it was restricted to Dublin) and  Newbridge.
  2. Kurly, the grocery delivery service in Korea, closed a Series E of $150 million at a valuation of $780 million last year.
  3. Amazon, invested in online delivery company Deliveroo to help them expand in the grocery delivery market – A move that has now strengthened its foothold in the grocery market ever since the launch of Amazon Go has been announced.

Now that we have looked at the funding situation that is presently operative in the domain, it is time to get down to the ground-level parts of entering the grocery delivery market through an on-demand application.

Let us start with the features first – the primary thing to help understand is how do you make an online grocery app. The features that would play a strong role in deciding not just how your app would function but also would help answer how much does grocery app development costs.

What do the Grocery Industry Statistics Say?

Grocery Industry Statistics

The grocery app market has seen consistent growth since the year 2019. In 2022, the total online grocery app market has reached the valuation of $135.2 billion and  is expected to reach $187.7 billion in the year 2024. If we talk about an app like Instacart, then it experienced 200% growth in its downloads this year. 

And the best thing is that Instacart is no exception. There are several other grocery delivery applications that are already cracking records with their income growth. Also, with the global Covid-19 pandemic, people prefer to stay indoors, significantly increasing the demand for grocery app development services.

Related Read- COVID-19 Effects on Grocery Business: How to Survive the Phase?

How Grocery App Works?

How Grocery App Works

Online grocery delivery apps allow consumers to select their preferable grocery store to deliver items to their doorsteps. Such applications are now making the purchasing of groceries inexpensive. 

With grocery delivery apps like Instacart, people now no longer need to visit physical stores to pick up their groceries. The grocery store app development is now making on-demand grocery delivery work seamlessly. Here’s how grocery delivery works with just a few clicks:

  • Users must provide the location and insert their address manually after logging into the app. The app will start showcasing the list of grocery products. 
  • Users can now choose from a wide range of products, add them to the cart, make payments, and choose the time and date of delivery.
  • Consumers can even arrange for a pick up straight from the supermarket. All they need to do is get their order placed and choose a pickup time as per their convenience.

Reasons to Build a Grocery App

The benefit of a grocery delivery app is immense. The grocery app is mainly developed to reduce the painstaking effort of visiting department stores and shops to buy groceries. Here are some of the top reasons to build a grocery delivery app:

1. Upskill your Brick-and-Mortar Store

If you own a shop in a local supermarket, then it is the best time for you to automate it and give it the power of a mobility solution. Hire an on-demand grocery app development company like Appinventiv and gain better customer reach with a little investment.

Our experts revamped Dominos’s UI/UX design, a multinational pizza restaurant app, by helping them drive more growth and conversion rate. Dominos was thus able to increase its user retention by 23%. Not only were they driving more customers to their brick-and-mortar outlets, but they also saw an upsurging user engagement in their app, which we redefined with a great user interface. 

2. Saves Time and Energy

Any grocery delivery app can make it easier for users to manage their daily chores in just a few clicks in the comfort of their home. By developing a grocery delivery app, you can give your customer a level of comfort so that they no longer need to stand in long queues and carry heavy grocery bags. Also, as an app owner, it will be easier for you to handle a larger customer base, all within a single app.

Citing an example of Appinventiv’s collaboration with KFC, our experts helped in the expansion of its mobile presence globally. The application was experiencing poor user engagement. We facilitated multiple order modes and offer the personalization feature in the app for seamless ordering.  

3. Cost-Effective Business Model

If you are looking to initiate your on-demand grocery delivery business, but have a tight business model, then you can go for an affordable business model. The existing market is already very competitive, so businesses are coming out with new solutions and monetization models to gain good returns. 

Some of the top business models of the grocery delivery app development include aggregated model, commission-based model, advertisement model, and subscription model. Choose the best one for your business and proceed ahead with the development process. Let’s discuss it in-depth below.

Let our experts help

Business Models for On-Demand Grocery Delivery App 

The business model for an on-demand grocery delivery business involves three models that can help you get good revenue. Here are the top business models or monetization models for an on-demand grocery delivery app:

1. Commission Model 

This is one of the oldest yet workable models for gaining profit. This type of model is beneficial for both the business owner and the vendors. Let’s understand how the commission model works – For each sale happening on the app, the seller earns his part of the commission while a very small part of the money is charged from the seller for registering in the app and the buyer for buying a good from the app.

2. Advertisement Model 

The advertisement model allows the vendors to place their ads appropriately on the portal. In this monetization model, vendors and sellers run their ad campaigns by the admin. 

3. Subscription Model 

As the name suggests, this kind of business model is based on the subscription method. This includes various offers that depend on what type of subscription plans people buy. In a subscription model, the users purchase the membership for a certain period of time and gain the advantages of the premium services. Read this blog to know How Do Apps Make Money?

The Must-Have Features of Grocery Delivery Apps

The list of features that has to be considered while looking into on-demand grocery delivery app development is basically divided into three parts – every set attending to a specific stakeholder. If you want to know how the grocery app works, then have a look at the top four panel features to understand the process. Let us look at the feature set one after another.

List of Features in the Customers’ Side of the Application

The customer panel is for the end users for signing up and logging in to the app for ordering their groceries. Following are the list of features for the customer panel.

Customer Side Of the App

Sign In and  Sign Up: The registration and sign-in is the first interaction screen where the customer enters the application. Social media integration is widely used at this stage to make the whole process a whole lot easier.

Profile Management: At this stage, users are given the option to create and update their profiles which contain information related to their contact details, payment methods, etc.

Product Browsing and  Listings: The on-demand grocery app should have a number of products to enlist for the customers to choose from.

Search and Filter: The option should enable the customers to search for something they wish to buy off your application.

Add to Cart and Check-Out: Both the functionalities should be present in the application to make the whole ordering process easier.

Multiple Payment Options: Your payment gateway integration process should allow customers to pay using multiple payment options – something that makes the whole experience comfortable for them.

e-Wallet Integration: You can also give your customers to keep some money in the in-built wallet to make the check-out process very seamless and quick.

Discount Vouchers and Coupons: Your customers should be given the ease to view and apply the discount code at the time of payment.

Delivery Tracking: Real-time tracking of where the order has reached can be a functionality that can have a massive impact on user engagement, for the customers would always be in the know-how of their products.

Time Slot Selection for Delivery: Noting the fact that groceries are mainly ordered on the on-demand app by the working class people, it is advised that you give them the freedom to choose a time slot as per their convenience.

Order History: Customers should be given the facility to check their order purchase history inside the application to make it easy for them to remember whether or not to make a repeat order.

Ratings and Review: Your customers should be allowed to post their experience with a particular store or product on the application for others to see.

Help and  Customer Support: You should give your customers a way to reach your team whenever they face any issue.

Push Notifications: When it comes to mobile app marketing, there is yet to be a mechanism as effective as a push notification. So, your app should also have a well-defined push notification strategy working for it.

List of Features in the Driver’s Side of the Application

The driver’s side or the delivery partner panel contains features that would help the driver or the delivery personnel to manage their task easily and deliver the orders on time.

Delivery Person Side Of App

Delivery Requests: The drivers partnered with your application should be given the freedom to accept or reject a particular trip because of any reason.

Push Notifications: All the order delivery information – new and canceled along with the account debit information should be given to the drivers through push notifications.

Map Integration: A must-have part of your Grocery app feature for the delivery panel would be the integration of the map to help your drivers know where is the location of the customer.

Turn-by-turn Navigation: Inside the map, you should also give the functionality to help drivers with turn-by-turn navigation being told out loud.

Set Availability: Drivers should be allowed to set their availability in terms of when would they be present to take the order and deliver it.

Delivery Time Slots: The time slots that the customers select should be shared with the drivers as well to help them know when to pick up the order and deliver it.

Total Weight of Orders: Because the drivers have to carry the order, they should know  how much does it weigh – so that they are able to decide on the vehicle type.

Work History: The details of the trip made should be shared with the drivers on their app so that they have a clear idea of their performance once the day ends.

Earning and Reports: The invoice and details of their complete earnings should be mentioned clearly inside the application.

Ratings and Reviews: They should be given the freedom to review and rate a trip as well – after all, accountability rides on both sides.

Help and Customer Care: Just like your customers, your drivers should have clear ease of contacting your team when they face an issue.

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List of Features in the Admin’s Side of the  Application

The admin side features an intuitive panel for the admins to manage all the tasks, including handling complete information of the customer, delivery partner/ driver, and vendor’s panel.

Admin Side Of The App

User Management: Admin of the application will have the ability to add or remove users within the application or change their active status.

Product Management: They should be able to change the add new products, remove discontinued ones and even edit their details on the page.

Order Management: Admins will have to be on top of the orders that are being made inside the application.

Driver Management: Driver management is one of the important functionalities that should be present in the admin panel. It should have complete information about the drivers – their contact information, trip details, etc.

Reset Passwords: While password reset is an option that drivers and customers will be working around, the admin should also have the database of the passwords with them.

Add, Edit and Remove Various Elements of Apps and Website: All the changes to be made inside the application – starting from the users and product information to changing the design of the application – should be made easy to operate for the admin.

Payment Management: Every payment detail made inside the application, including the refunds, should be made available to the admins with ease.

Campaign Management For Email, SMS, Social Media: Admins should be given the necessary features to plan campaigns around SMS, email, social media, etc., to attract customers to their application,

Run Promotions and  Discounts: The admins would be given complete access to run discount and promotional offers across the whole application.

List of Features in the Vendor Panel 

A robust vendor panel allows to seamlessly manage orders from customers, assign shipments to the delivery agents, and manage everything under one roof.

Vendor's side of the app

Item Management: The store owners can update or add their prices, product listings, and minimum order quantity along with the amount and make the products directly available for ordering. 

Order Management: The vendors can now check the status of their order, and the total amount that is collected with each order and take action accordingly.

Coupon Code Management: The vendors can plan and add new deals, discounts, coupons, and offers and drive in more sales to the business, thus improving customer retention. 

Payment Tracking: The store owners can add their account details and view the pending and successful payment settlements, all in one place.

Order Alerts: With real-time push notifications, the store owners or vendors can get notified of new orders or any update alert and take further action. 

Receive Orders: This feature allows the vendors to receive the orders from the customers for different grocery items and accept them for further order processing. 

Reject Orders: If a product is out of stock or impossible to deliver to a certain location due to some specific reasons, then the vendor can easily reject the order. 

Additional Features that can be Added to Online Grocery Delivery App 

These are the few crucial features of the grocery delivery app (panel-wise) that define the functioning of the three most important elements of your business. However, if you wish to build a stronger business, you need to add advanced features to make it stand out from competitors. Let’s check out some of the additional features that can be added to your on-demand grocery delivery app. 

Real-Time Analytics

Real-time analytics is extremely vital for extracting the processed information out of the data chunks that are stored in the grocery mobile app database. This helps people in governing the grocery stores and admin for checking various related statistics that can make your business a success.

Communication Channels

It is imperative to allow your users and drivers to communicate with each other on a transparent platform. Having a strong communication channel is important for both the users and drivers to communicate about their location, nearby landmarks, delays, expected time of delivery, and other issues that need an open communication channel.

Offering Multiple Payment Modes

Currently, we have a multitude of payment gateways. Go for implementing almost every possible payment gateway that you can for making it easier for your users to choose their preferred mode of payment and process transactions easily. 

The top payment gateways like Stripe, Braintree, Apple Pay, PayPal, Google Pay along with direct banking payment through debit cards, credit cards, e-wallets, UPI, net banking, and so on should be implemented on your app to provide complete ease of payment. This kind of convenient approach to the users can ensure them a hassle-free and convenient approach to payment.

AI-Based Delivery System 

When we talk about the current scenario, then during the global pandemic situation, most people are avoiding receiving deliveries from humans. With artificial intelligence solutions, you can get your groceries delivered by drones. 

Complex technologies like AI and ML would make it easier for you to get the ordered stuff packed and deliver it to your customers on time. By utilizing this kind of cutting-edge technology, it will become easier for you to scale the competitive market.

Now that we have looked at the list of must-have features of grocery application development, it is time to move on to the next technical part of the grocery app development process you would have to follow when starting your on-demand grocery delivery app business – technology stack.

Technology Stack Used for an Efficiently Developed On-Demand Grocery App

While the technology stack used to make an on-demand grocery app might vary from business to business depending on their skill-set and the budget that they have set in name of the cost of mobile app development.

The one that our in-house team of grocery app developers has been using is –

Tech Stack For Grocery App Development

Now that we have looked at the two things that tend to have the biggest impact on the grocery app development cost, it is time to answer the question that you must be waiting to get insight on.

How Much Does Grocery App Development Cost?

The exact answer of how much online grocery app development cost is a number that we can only arrive at after analyzing your business requirement and expectations from the project.

But if you look at the feature set and the tech stack that we have mentioned above, you will get a number in the range of somewhere around $40K to $50K – including all the four app versions that we looked into above that is if you are looking to know the grocery app development cost.

But then again, the number can definitely vary depending on a few factors and how your requirement shifts. Let’s look at the factors in detail:

How Much Does Grocery App Development Cost

Size of Development Team

In order to build an on-demand grocery delivery app, the size of the development team greatly influences the cost factor. A development team should consist of app developers, app designers, team leads, QA testers, and project managers. 

A team of greatly experienced development experts is required to create an efficient grocery delivery app. They must have good experience and thorough knowledge of all the grocery app requirements that can make a great grocery delivery app. 

Features and Functionalities

Features and functionalities are the two crucial factors that greatly influence the development cost. In simple words, the more you add features to your on-demand grocery delivery application, the more it will cost you. Although implementing the basic features is vital for your grocery app development process, but additional features (as discussed above) can become an additional development cost for you.

Choice of Platform 

In general, if your app is only developed to support a single platform, then there won’t be much expensive for you. However, if you want your app to be compatible with two or more platforms, then it can cost you a bit more. The two major platforms currently for mobile applications are Android and iOS

Although there are more Android smartphone users worldwide than iPhones, you have to decide which platform you are going to choose. In case, you want to target the users of both platforms, then you can go for cross-platform grocery app development. 

App Marketing 

Once the app is developed, it needs to be submitted to the App Stores for listing. The app will get reviewed by the experts, and it will be scrutinized to see if it complies with the App Store standard along with the one-time fee that you will be required to pay. Since there is a high number of competitors in the market, you need to put a strong marketing budget for your app promotion like getting it reviewed by publications to creating compelling ads.

Maintenance and Support

The cost of developing your grocery delivery app does not get over once you take off with it. The app will be requiring periodic updates as you need to keep your customers engaged with innovative features. Therefore, there would be additional maintenance and support charges. 

It will become an ongoing expense with the updating market trends along with the launch of new devices. This will ensure that your on-demand grocery application is working lag-free. Reusing existing code and constantly upgrading the app are the two vital parts of maintenance and support. 

In a Nutshell

Well, with this, we have looked at it all that you need to get started with your on-demand grocery delivery business with the support of the on-demand grocery delivery app development process. The next step is to know how you would earn back the amount that went into its development.

So, to get a complete idea of what things to watch out for turning your on-demand app vision into a mobile app, you should consult with an on demand grocery delivery app development company like Appinventiv.

FAQs

Q. What is a white-label on-demand grocery delivery app?

A. A white-label grocery delivery app is a ready-to-deploy application that is pre-loaded with advanced key features that can be rebranded as per the client’s grocery app requirements. These white-label grocery apps are known for saving development time and effort and can be easily customized.

Q. Which is the best grocery delivery app development company?

A. Grocery delivery is probably one of the most challenging of all the delivery systems considering the huge volume of store handles and multitude of processes that simultaneously take place. 

Appinventiv is known for creating the best grocery delivery apps that are multilingual, robust, and fully customized. The scalable grocery delivery application built by our experts automatically takes care of the fulfillment of the order processing. With an intelligent delivery management system, it is easier to manage orders, inventories, and deliveries.

Q. How much does it cost to build a grocery delivery app like Instacart?

A. The cost to create a grocery delivery app like Instacart relies on factors like:

  • Development budget
  • Documentation costs
  • UI/UX designs
  • Testing of the app
  • Selection of platform
  • Maintenance and support

Overall, taking the average cost of developing an app, which is near about $35 per hour, the cost for building an app like Instacart will start from $75,000.

Q. How to create a grocery delivery app?

A. Here are the basic steps of creating a grocery delivery app:

  • First, choose the business model
  • Work on 4 main panels- customer, user, admin, and vendor
  • Select an exceptional website, UI/UX, and app layout
  • Choose proper tech stack
  • Go for testing before launch

Q. Is the online grocery delivery business profitable?

A. The grocery delivery services are profitable business ventures as the convenience of getting groceries delivered at home is making customers rely on such applications increasingly. Online grocery shopping is, therefore, catching up its customer base rapidly. The global grocery delivery market is expected to grow at a CAGR of 23.7% from the year 2020 to 2025. In the next 5 years, it is thus, expected to reach the valuation of $250 billion.

THE AUTHOR
Sudeep Srivastava
Co-Founder and Director
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