Grocery Delivery App Development: How to Build an App Like Instacart. Features and Costs

Before 2020, grocery delivery apps were most popular among young urban citizens. Now, due to the coronavirus pandemic and global digitalization, this way of shopping has become a standard practice for all customer segments, including the elderly. And it’s not going away anytime soon.

According to McKinsey, in the near future online grocery shopping could amount to up to 30 percent of the food-at-home market in some European countries. At the same time, digital grocery shopping in the US is expected to grow by 20.5% during 2022, and by 2025, the average annual spend per online grocery customer will increase from $856.47 in 2021 to $1,524.84.

That’s not surprising, because with a convenient and user-friendly app, grocery shopping is no longer a chore but a simple task that can be completed within minutes. In this article, we share tips and tricks on how to develop an app that your customer will love, as well as tell about Mind Studios’ own experience of building a food delivery platform.

What is an on-demand grocery delivery app and how does it work?

As the name suggests, grocery delivery apps let customers order groceries (or other products) to be delivered to their doorstep. The service itself is nothing new, of course, but the move to mobile devices has made it infinitely more affordable and, therefore, more widespread. No longer do you need to be able to hire a domestic worker to get groceries delivered. Anything you require is just a couple of taps away.

In a nutshell, grocery delivery app development is similar to the development of any other app that offers on-demand services. Like Uber, for example. In fact, Uber has its own on-demand food delivery service, Uber Eats. If you decide to venture into the grocery delivery business in the US, Uber Eats will be one of your major competitors, alongside Instacart and Postmates. But if you develop your app the right way with a good team, you can probably take on these giants.

An online delivery service usually involves two apps — an app for customers and a separate local delivery app for those making deliveries. When a customer places an order in their app and pays for it, a delivery worker who’s in the vicinity sees that order on the delivery app, accepts the order, and completes it, delivering the goods to the customer.

Technically, it’s possible to combine functionality required by customers and delivery workers within the same app, but that will make your app cumbersome. It’s hardly an efficient approach.

Why do you need a grocery delivery app?

The food delivery market already has tons of platforms to offer. So, why is the idea of building another app might be profitable? Here are three reasons.

Investing in a rapidly growing industry

The demand for grocery delivery services has been gradually increasing for the last 5 years. However, the global pandemic and lockdowns naturally sped up the process. While the market size of the global online food delivery industry was estimated at 130.2 billion USD in 2022, it’s expected to grow to 223.7 billion USD by 2027. This means the market will be growing at a CAGR (compound annual growth rate) of 11.44 percent.

It’s not just the COVID-19 pandemic that has led to this popularity spike. According to The Business Research Company’s report on the online food delivery market, the growth of this market is closely tied to the increase in the working population, especially young workers in metropolitan cities. With more and more people working in metropolitan areas, the rise of disposable income, and accessibility of the internet, the demand for food delivery services will continue to grow steadily.

Improving grocery shopping experience

Ordering food online and getting it delivered is obviously faster than actually going to the store. On the app, you are not wasting time searching for the right products, waiting in lines, etc. And avoiding the hassle is a game changer for those who work full-time shifts. Besides, often customers in physical stores can only pay with a credit or a debit card, while apps usually offer multiple payment options, like RFID cards and EMI options.

Basically, it all comes down to the fact that online grocery shopping makes life a little easier for customers, and that’s why they are going to continue choosing it over physical stores.

Building stronger connections with your customers

If you’ve decided to build a grocery delivery app, you are most likely either a grocery store owner, a chain of stores owner, or an entrepreneur who wants to partner with other stores. In any case, if you want to build a loyal customer base, we would advise you to choose an application for your services because of:

• The opportunity to communicate with your customers and personalize their experience with your service
• The ability to analyze customers’ behavior and make relevant recommendations for them by collecting and analyzing users’ previous orders
• The tools it provides to inspect every single step of a customer’s journey, like seasonal purchasing habits, packaging preferences, reasons for rejecting particular products

Based on all this, you can develop a strategy to connect with your customers and up your profits.

For instance, if the user often purchases one particular kind of product, let them know when it’s on sale with a push notification, or suggest alternatives if it’s out of stock. Or, let’s say, you offer biodegradable packaging. Why not let those customers who often order sustainable products know more about it?

Moreover, you can develop a rewards system within the app, which may include:

• cash back
• loyalty programs
• free delivery coupons
• seasonal and daily deals
• “soon to expire” sales.

Such simple strategic moves, in addition to building a unique brand voice, will help you create a strong emotional connection with the consumers and increase their loyalty.
You may also like the medicine delivery app development guide.

A tip to keep in mind before starting online grocery app development

Prior to the design and development stages, it’s vital to determine a business model for your on-demand delivery service. Future features of the app and its whole structure will depend on this decision. Picking the right model right away means you won’t have to make any significant changes to the app mid-process and therefore, help you avoid spending tons of money on those adjustments.

There are two on-demand delivery business models for a grocery shop app:

1. The delivery service has its own store with products they deliver
2. The delivery service partners with a number of different stores and makes deliveries for them

Walmart has its own app, for example, and the company has a delivery service as well, though it isn’t available everywhere.

Other stores, like Costco, partner with services like Instacart to make deliveries for them. By partnering with a store, you’ll get access to its inventory and price data and can add the store’s products to your app. There are several ways to implement this tech-wise.

You can, of course, forego the whole partnership thing and just deliver products on-demand without specifying which store they come from. Instacart started this way. However, it’s infinitely more difficult; you’ll have to provide your own product photos, for starters. Besides, some customers prefer specific stores and would like their products delivered from there and nowhere else.

Choose the right type of grocery shopping app

The kind of grocery app you choose to develop directly depends on the role you are going to take on in online grocery shopping. Do you want to just be a platform that connects users with the stores? Or are you running a grocery store and looking for a way to up your game?

This table with five main types of grocery apps will help you figure out which one suits you most.

Grocery mobile app features to include in your MVP

Since grocery delivery apps aren’t particularly innovative in general, spending a fortune to launch a complete version without proper research and preparation would be a waste. Before diving into development, you and your grocery app development company should evaluate your idea and find a unique value proposition. Next comes an MVP, or minimum viable product.

The minimum viable product (MVP) is a simplified but functioning version of the app. It’s sometimes built for the first release as a cheap and quick way to gather feedback from a limited number of users and improve the app accordingly. While making an MVP, developers focus on core functional features, without yet paying attention to additional features and visual aspects of the app.

Here is a list of essential features that an MVP of the grocery delivery app should have:

Customer app

• User profile
• List of stores
• Menus/items in stock
• Cart/order page
• Payment gateway
• Order status
• Order history
• Notifications

Delivery app

• Profile
• Delivery request notification
• Accept or reject delivery request
• In-app chat and/or in-app calls
• List of orders (showing items and delivery addresses)
• Map for navigation
• Dashboard with daily, weekly, or monthly earnings
• Payment transferring to e-wallets or credit cards

Admin panel

• Customer data
• List of stores
• Order management
• Menus/items in stock
• Revenue
• Real-Time Analytics

Naturally, for the customer and delivery apps to function properly, they’ll need to communicate in real-time so that deliveries don’t take too long. The selling point of any grocery shopping app is that the service will deliver the order on time. To ensure app-to-app communication, you’ll need WebSocket APIs on your backend.

Extra features to include when developing a grocery shopping mobile app

At Mind Studios, we prefer the concept of a minimum lovable product (MLP) to an MVP. Developing an MLP means that, in addition to the bare necessities, your app will also have a signature feature that makes it stand out from the crowd of similar on-demand grocery delivery apps. Here are a few suggestions as to what these features might be:

• Allow your customers to sign up with social networks like Facebook or automatically sign up with their email without having to go through a registration process. This will make signup faster and easier for your customers, making them more willing to interact with your app and minimizing bounce rates.
• Add an alternative option. With an alternatives field, customers could set a possible substitute if an item is unavailable. This will enhance the user experience since there will be fewer cases of partially completed orders.
• Make a chatbot. It could show your customers (and delivery workers) valuable information about the products and stores, provide popular recipes with a selected item, etc. Moreover, the chatbot can be enhanced with AI which will help pick highly relevant content for the users.
• Provide voice recognition. This will be highly appreciated by your busy customers, enabling them to place orders on the go without having to stop and type in a product name or browse a store’s inventory.
• Set up phone and/or chat support, be it technical support for app operations or the possibility to contact a delivery person to make last-minute changes to an order. Also, make sure the consumers get a quick and helpful response in case there’s anything wrong with the delivery service or the products they ordered.
• Allow customers to leave ratings and reviews for each delivery. This way, you can keep tabs on your delivery workers and on your app’s performance.
• Enable reordering, another useful feature for busy, working customers. This way, they can simply make a grocery shopping list once and then repurchase it over and over again.
• Develop customer loyalty programs. Coupons and bonuses, seasonal or “soon to expire” sales, free delivery promo codes, and gifts — basically, this includes any deals that will encourage your customers to come back to your app.
• Add GPS-tracking. This feature will be useful to both customers, who want real-time updates on the status of their order, and delivery personnel, who need help in locating routes.
• Provide an e-signing option so that both buyers and couriers can easily confirm delivery completion.

Any additional features will naturally affect the cost to build a grocery app, but they can also become a unique advantage that will help your service get noticed.

UI/UX design for the online grocery delivery app

Choices the team makes when creating UI/UX app design define whether future customers will close the app within a few seconds or make ordering through it part of their routine.

Here are at least four UI/UX design tips that we recommend considering if you decide to build a grocery app and want to make sure it succeeds.

Make the navigation easy

If a customer purchases groceries via a mobile app, chances are they want the whole process to be extremely quick and easy. Filling out long and unnecessary registration forms, figuring out how the app works, and looking for customer support — all of this can instantly turn the users away and make them look for other options. Therefore, the task of the UI/UX designers is to make all the necessary features easily accessible.

Apart from this, it’s essential to make the process of looking for necessary items seamless. For instance, the advanced filtering feature is a must when designing a grocery delivery app, as well as providing recommendations of alternatives for out-of-stock items.

Accentuate the products

One of the main drawbacks of online grocery shopping is the inability to touch, smell, and basically have an interactive sensory experience with the products. That is why the task of the app is to deliver detailed information about the items and make the visuals as real as possible.

Make sure every item on the app has a detailed description, including the list of ingredients, information about food energy, country of origin, etc. It’s also worth the effort to search for high-quality pictures of each item on the menu.

Since the main idea here is to get the users to buy products, the overall design of the app should not be overwhelming to the users. Make it clean and simple, with just a couple of main colors, so that the focus stays on the products featured on the platform.

Encourage interactions with the app

Simple design doesn’t mean it should be boring. Enrich your app with interactive elements, animations, and engaging notifications that will personalize the customer experience and encourage users to leave reviews, rate the products, check out new offers, subscribe to weekly selections, and share their experience with friends.

Pay extra attention to security issues

On most platforms, users who order grocery delivery online have to share their personal information, including credit card details and home address. That is why you need to choose trustworthy networks and databases, and let your customers know that you take on the responsibility of protecting their privacy. This will influence the level of your client's trust.

Obviously, there is no one-fits-all solution for a grocery delivery app. Before coming up with UI/UX solutions, the Mind Studios team conducts all-encompassing research of the market and most importantly studies the target audience to find out which features and visual styles will appeal to them most.

You can find out more about our approach to developing apps during a free consultation with our business development analysts.

Tech stack for on-demand grocery delivery app development

After the design is completed, it’s time to transform the mockups into an actual application. Here, our app developers have compiled a table of the tech stack that will be suitable for an online grocery delivery app.

Grocery delivery mobile app architecture

Before getting started with app development, it’s essential to determine the features of the future product and ways to integrate them into the app. That is what mobile app architecture is for. Basically, it is a set of structural elements and techniques needed to develop an application.

Here, we share the possible grocery delivery app architecture based on James Butler app, one of Mind Studios’ projects.

How do on-demand delivery services make money?

When you think about how to build an app like Instacart, you inevitably stumble upon the issue of how to make a profit. Developing an app is not cheap by any stretch, and you’ll also need to pay the people who make deliveries. Besides, you’ve started a business to make money, right?

If you are a store owner and plan on expanding by launching an app, naturally, you will get profits directly from selling the products. Even more so, an app can save you money in the long run. For instance, let’s say, there is a list of products that haven’t sold out as you expected. You can put them on a “soon to expire” sale and let your customers know about it with a push notification. Overall, a mobile app is a perfect platform to announce special deals, communicate with clients, and therefore, build a loyal customer base.

If, however, your business comes down to just delivery services, there are several monetization options available to the owners of on-demand grocery delivery apps. These include:

• Adding a fee for your service to the price of each item
  That is, you can set the price of each item a little higher than the actual price in the store. Keep in mind that if you do this you’ll need to clearly inform your users about the elevated prices if you wish to appear honest and transparent. Create a notification that pops up the first time customers place an order or start browsing the catalog. Also, include a reminder in your policy.
• Charging a delivery fee
  This is the most common monetization model. Your customers are charged for products according to the actual prices in the store and then pay a fee for delivery. Depending on the order size and the distance from the store to the customer, a delivery person might need a car or might be able to take public transportation. You can set a base rate and include functionality to calculate the actual rate automatically. In addition, you can implement surge pricing, which means the delivery fee can go up during peak hours.
• Placing ads on the app
  This monetization model is seen everywhere. Many apps include ads, which can cover expenses and allow companies to charge less for services, to their customers’ utter delight (or not).
• Charging stores to be listed on your platform
  If your app is already popular, you can charge a monthly fee for shops to partner with you and have their products displayed on your platform. In return, stores will get brand recognition and more customers.
• Offering a membership option
  Some grocery delivery apps provide a monthly or annual membership option. For example, with Instacart users can purchase a paid membership called Instacart Express. In exchange, customers get unlimited free deliveries on orders of at least $35 and don’t have to pay extra fees when shopping in multiple stores in one order.

You can use a single monetization model or combine several.

The required development team for creating a grocery shopping app

If you’re working with an outsourcing development company and plan on going for both Android and iOS platforms, this is the team you’ll need to hire:

• 1 project manager
• 1-2 Android developers
• 1-2 iOS developers
• 1–2 UI/UX designers
• 2 QA specialists
• 1 backend developer

You could skip on the project manager if you choose to work with individual freelance developers. However, we believe that project managers are an important link that holds everything together, and their input into the app’s creation is crucial.

How much does it cost to build an app like Instacart?

Now that we’ve gone over the features and you know how to make a grocery delivery app like Instacart, let’s try to estimate the grocery delivery app development cost. The exact price will depend on multiple factors, from the complexity of the app to your choice of developers, but we can give a rough figure for the basic features.

With two separate apps to build, each with its own design and feature set, the time required to build a grocery app also depends on the number of people on your team. If you decide to work with a team that we’ve described in the previous section, we estimate that it will take at least 2366 hours of work.

Now, let’s get into the specifics of the crucial stages of the app development process so that you know what exactly you might be paying for.

• Discovery stage and idea validation, during which the team analyzes the market, conducts interviews with prospective users, defines your app’s unique value proposition, and shapes the project’s scope.
• UI/UX design for Android & iOS platforms. During this stage, the designers work on the visual concept, define UI/UX features the app will consist of, and create prototypes — visual mockups of each screen of the app.
• iOS and Android development, during which a team of developers turns the mockups into a real, fully functional application. As a rule, Mind Studios goes straight for the MLP (minimum lovable product). This means that for the first release, we are ready to present a version that already has everything to make the user fall in love with the app.
• Testing and improving stage, which involves analyzing the user experience with the app, looking for crashes, bugs, and any other imperfections, and reporting to the development team who will fix them.

Here are the time and cost required for each of the app development stages:

With an average price of around $45 per hour, the cost for an app like Instacart will start at $106,470 for both iOS and Android platforms and go up from there depending on the features and technologies used.

Do you have more questions about how to develop an app like Instacart or want a more precise cost estimate? Get in touch, and we will answer any of your questions.

Grocery delivery app development: our experience

Mind Studios’ knowledge of how to make an app like Instacart is not theoretical. We know firsthand about grocery delivery app development since one of the projects we are particularly proud of is a Danish food delivery application.

James Butler is a mobile application that allows users to order items from physical shops and get them delivered to their doorsteps within 30 minutes. For this project, we basically developed two applications: one for the customers to make orders and one for the couriers to deliver those orders.

We took on the challenge of building two complex applications, both for two platforms (iOS and Android), in just three months. All we had to start with was our client’s general strategic vision and a few basic visual mockups. But the project was successfully completed by October 2019 as planned, just a few months before the pandemic triggered a huge demand for this kind of service.

Naturally, the development process wasn’t smooth and carefree. Along the way, our team had to overcome some obstacles and find out-of-the-box solutions.

For example, we had to quickly find an alternative payment gateway to Stripe, which turned out to not support instant payments in Denmark. As a result, we chose the Danske Bank, but still had to make some adjustments and create a Ruby-written solution to integrate a smoothly running instant payment system into the James app on time.

In the end, despite the tight deadline, we transformed the client’s vision into an app used by thousands of Danes. After the product was soft-launched, we gathered feedback from both customers and couriers, which helped us carry the app out to perfection.

To this day, we keep in touch with the stakeholders and continue to provide updates for the James Butler app, so that it always keeps up with the market and the customers’ needs.

Conclusion

As you’ve seen from the statistics featured in this article, the demand for online grocery shopping platforms will continue to grow, no matter whether it’s the US, Europe, or Asia. During the pandemic, millions of people got to experience how grocery delivery can save them time, and now there’s no going back.

Obviously, there already are dozens of popular grocery delivery platforms. However, it is still a viable business idea, as long as you choose an experienced and trustworthy development team.

Whether you want to discuss your idea, find out how much it’s going to cost you, or talk through the terms of outsourcing our team — book a free consultation with Mind Studios. Our business development consultants will answer any questions you may have and help you get a better understanding of how the project can be implemented.

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