Market research for a new grocery app.
When reality contradicts aspirations.
Goals.
- Identify purchase behavior of grocers.
- Measure average basket size.
- Classify grocery stores by size and by purchasing power.
Obstacles
The UAE grocery market is highly fragmented and the size, class, purchasing power and structure of grocery stores varied widely, depending on the location and sales turnover of each store.
Analysis
Our client wanted to launch a new app that grocers could use to source products from their suppliers.
Actions
- Surveyed 100 grocery stores across the UAE.
- Quantified daily purchases of grocers in value, volume and type of products bought.
- Determined usage patterns of grocery apps.
- Mapped the ways grocers pay their suppliers.
- Measured the average basket size of customers.
Results
- 58% of the sampled population showed negativity in using grocery apps.
- Existing grocer apps failed to ensure a deep market penetration rate due to ineffective marketing and poor customer service.
- Grocers stated that getting financial benefits ranked as a top incentive to consider using such an app, followed by timely deliveries, and then quality control.
- 19% of interviewees are active users of grocery apps.
- Those who use and/or stopped using grocery apps did use that app 4.2 times a month on average, buying goods for AED 332 per visit on average.
- The success of the new app depended on a carefully planned marketing strategy: should it offer a full range of products or is it better to focus on a few most-demand goods?
- The success of the planned app also depended on the investor’s desired revenue stream, on innovative packaging. Success also rested on financial and non-financial incentives, among other key elements.
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