Experts predict the online grocery industry will grow from 2 percent of the $650 billion spent annually on domestic groceries to between 10 and 17 percent by 2023.
The business model looks appealing, at least on paper. With a single warehouse and a small fleet of delivery vans, an online grocer is able to serve a large city without the overhead of a chain of brick-and-motor stores.
Despite the cost advantage, the model is challenging. Most online grocers charge a delivery fee to make money. While this fee is acceptable to some consumers, many may not be willing to pay extra for something they can do themselves at a neighborhood store.
Door to Door Organics has taken a different approach by offering a subscription model. Its customers can sign up and shop online for local, natural and organic food delivered to their home at no extra charge on a weekly or biweekly schedule.
The business is all about “empowering people to eat good food” through a curated experience where customers can plan meals and shop by recipe. By clicking on a featured recipe on Door to Door’s website, the main ingredients are added to a weekly delivery box to go along with staples such as milk and eggs.
In August 2013, the specialty online grocer changed the process it was using to route its deliveries to increase efficiency and set the stage for continued growth. Since then, its order volume has increased by 20 percent, while labor costs in its logistics department have dropped by more than 10 percent.
To view a quick photo gallery of Door 2 Door’s innovations, click here.
