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Designing the right model for your e-commerce


Woman placing an online grocery order

Retailers are racing to find the perfect model to deliver the best experiences to their customers. Staying ahead of e-commerce trends is no longer optional—it's essential for companies looking to optimize operations and meet rapidly evolving customer expectations. But how do you determine the right model for your e-commerce operations?


Let’s break it down into three critical aspects to consider when building your strategy.


How Do You Want to Reach and Interact with Customers?


Reaching and interacting with customers forms the foundation of any e-commerce strategy. This step defines how customers discover your brand and what their experience will be—both of which influence loyalty and long-term business growth.

 
For FMCG goods like groceries, pharmaceuticals, cosmetics, and baby goods, delivery speed is critical.

Research shows - 65% of customers expect grocery deliveries within 24 hours, with 40% expecting to get groceries within 2 hours. If your products rely on rapid delivery, adopting models that prioritize fast delivery times and q-commerce operations should be a priority.

Graph showing consumer delivery expectations by product category
Consumer delivery expectations by Product Category
 

Marketplace / Delivery Platforms



App aggregating Foodora, Glovo, Bolt Food, Wolt orders
Pickitoo Picking App Aggregating Marketplace orders

Platforms like Foodora, Wolt, DoorDash, or Deliveroo offer businesses a fast track to online operations. They connect you with large, ready-made audiences and require minimal effort to get started. However, these platforms come with trade-offs that businesses must carefully consider.


Advantages:

  • Quick Customer Access: Platforms like DoorDash (serving 37 million users) and Glovo (3.8 million users globally) allow you to reach millions of active customers immediately, eliminating the need to build an audience from scratch.

  • Low Marketing Costs: Leverage the platform’s established audience and reduce the need for costly acquisition campaigns. These platforms attract customers actively seeking products like yours.

  • Optimized Customer Experience: Companies like UberEats, Delivery Hero, and JustEats invest heavily in user-friendly apps, real-time order tracking, and seamless checkout flows, making them appealing to today’s tech-savvy consumers.

  • Outsourced Operations: Platforms handle customer service, payments, and logistics, allowing you to focus on sourcing and scaling your products.


Challenges:

  • High Commission Fees: Platforms typically charge commission rates of 8–15% per transaction, significantly reducing your profit margins.

  • Limited Customer Data: Without additional legal agreements, you gain little to no insight into 70% of customer behavior, making personalization and targeted marketing more difficult.

  • Dependency Risks: Your success hinges on platform policies, fee structures, and algorithm changes, leaving your business exposed to unexpected disruptions.

  • Lack of Loyalty: Customers often remain loyal to the platform rather than your brand, with 75% of users preferring to reorder through the same marketplace. This makes it harder to convert them into repeat customers on your own channels.


 

Own E-commerce Channel

Building your own e-commerce channel offers complete control over the customer experience. This approach requires more resources and time but comes with significant long-term benefits.


Advantages:

  • Brand Control: You can design every aspect of your online store to reflect your brand identity, creating a cohesive and memorable customer journey.

  • Loyalty and Retention: Personalized experiences foster trust and loyalty. For instance, businesses using Pickitoo e-stores report that 10–20% of total cart value comes from personalized recommendations.

  • Higher Basket Values: Marketplaces primarily cater to quick, top-up purchases like snacks, toiletries, or last-minute items. In contrast, your own channel allows you to target larger, planned purchases such as weekly grocery orders. Pickitoo clients adopting an omnichannel approach report that baskets on their own e-commerce channels are 2x larger than those on marketplace platforms.

  • Additional Fees & Savings: On your own channel, you not only save on commission fees but are free to design a flexible fee structure that aligns with your business model. For example:

    • Implement small basket fees to encourage larger orders

    • Add delivery or transaction fees to offset logistics costs

    • Offer discounts for click-and-collect options to save on delivery

    These additional fees can make up to 10–20% of total order value, creating a meaningful revenue stream.

  • Data Ownership: Full access to customer data allows for better targeting, personalization, and insights to optimize inventory and marketing strategies.


Challenges:

  • Higher Marketing & Operational Costs: Development, marketing, and ongoing maintenance require significant investments.

  • Longer Ramp-Up Period: Establishing your customer base can take 6–12 months as you build trust and awareness from scratch.

  • Operational Complexity: Managing logistics, delivery, and support in-house adds layers of complexity, requiring dedicated resources and infrastructure.

Grocery retailer's online store and app
Retailer's own e-store by Pickitoo

How Do You Want to Fulfill Orders?

Order fulfillment is the backbone of your operations, determining how efficiently you can deliver on customer expectations. Choosing the right model impacts delivery speed, cost management, and scalability. Balancing operational efficiency with customer satisfaction is key.


 

Warehouses / Logistics Centers

Warehouses are centralized hubs that manage large volumes of inventory. This model is ideal for traditional e-commerce but has limitations for quick commerce needs.


Advantages:

  • High Accuracy: Advanced systems ensure precise inventory management.

  • Bulk Efficiency: Handle large orders, reducing per-unit costs.

  • Scalability: Easily expand product catalogs.


Challenges:

  • High Investment: Requires substantial upfront capital.

  • Slower Delivery: Not ideal for same-day or rapid delivery demands.


 

In-Store Fulfillment

In-store fulfillment utilizes existing retail locations for online order picking. This model is especially practical for businesses with multiple locations.


Advantages:

  • Fast Delivery: Strategically located stores reduce delivery times.

  • Low Investment: No additional infrastructure is required.

  • Click-and-Collect: Enhance customer convenience with flexible pickup options.


Challenges:

  • Inventory Complexity: Balancing stock between in-store and online can be challenging.

  • Operational Overlap: Managing in-store and online order flows requires careful coordination.

 

Dark Stores

Dark stores are dedicated facilities optimized for quick commerce. They serve as mini-warehouses, ideal for fast order preparation and delivery.


Advantages:

  • Rapid Fulfillment: Designed for fast picking and delivery.

  • Urban Efficiency: Perfect for densely populated areas.

  • Streamlined Operations: No in-store distractions.


Challenges:

  • High Costs: Requires significant investments for setup and staffing.

  • Regulatory Scrutiny: Increasing restrictions in urban areas.


How Do You Want to Deliver Orders?

Delivery is the final touchpoint in your customer’s journey and often leaves a lasting impression. Choosing the right method is vital.

  • Your Own Fleet: Managing your own fleet gives you full control over delivery quality and timelines, ensuring a consistent and reliable customer experience. Branded vehicles and trained drivers also enhance brand visibility and customer trust. However, it requires significant investment in vehicles, fuel, maintenance, and driver wages, making it a costly option. Additionally, coordinating logistics and delivery routes adds operational complexity.

  • Gig Networks: Leveraging gig networks offers flexibility to scale delivery operations during peak times or fluctuating demand, making it a cost-effective option since you only pay per delivery. It’s ideal for businesses that experience seasonal spikes or unpredictable order volumes. However, the variability in service quality can lead to inconsistent customer experiences, as gig workers may not adhere to the same standards. Accountability is also limited, as workers operate independently.

  • Outsourced Logistics (e.g., Wolt Drive): Partnering with a third-party logistics provider eliminates the need for in-house fleet management, reducing costs and operational burden. These services are designed for quick scalability, allowing you to meet growing demand with ease. However, your customer’s delivery experience depends heavily on the reliability and professionalism of the third-party provider. Additionally, branding opportunities are limited, as deliveries are typically made under the provider’s brand rather than your own.


Embrace the Journey

Setting up a successful online business is not a one-and-done process. Instead, it is a journey that requires adapting to ever-changing customer expectations. Starting with delivery platforms and in-store fulfillment can be a strong first step. Transitioning to your own online store with a fleet or gig network for deliveries ensures long-term viability and growth.

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