Engagement & Retention project | Zepto
Understand Product
About Zepto
Zepto is a quick commerce startup that has rapidly gained traction in the Indian market. It is known for its ultra-fast delivery service that promises to deliver groceries and essentials within 10 minutes. The company has swiftly expanded its operations across major urban centres, strategically focusing on densely populated areas to optimize efficiency. Zepto's unique selling proposition lies in its unmatched delivery speed, which is made possible by a network of micro-warehouses strategically located near residential zones. These micro-warehouses are stocked with a carefully curated selection of high-demand products, enabling quick order fulfilment and swift delivery. Zepto aims to revolutionize the quick commerce space by setting new benchmarks for speed and convenience, catering to the fast-paced lifestyles of urban consumers. As of now, Zepto’s valuation stands at $5 Billion.
Zepto Business Model
Zepto operates through a network of dark stores, each covering a 4-5 kilometre radius. A dark store is essentially a fulfilment centre stocked with all the essential items that Zepto delivers. These dark stores are supported by a larger central warehouse, which supplies them with inventory at regular intervals. Depending on the location and capacity, multiple dark stores are connected to a single central warehouse, ensuring a steady and efficient supply chain. This setup allows Zepto to maintain its promise of ultra-fast delivery, meeting the demands of its customers with unparalleled speed and reliability.
How Zepto earn money
- Delivery charges
- Handling Charges
- Margins on each product
- Zepto pass
- Product Listing Ads
User Journey
Core Value Proposition
Zepto delivers unparalleled speed and convenience, bringing groceries and essentials to your doorstep in just 10 minutes. Through a strategically placed network of micro-warehouses and a curated selection of high-demand products, Zepto ensures that busy urban consumers can access what they need, when they need it, without compromising on time or quality. Zepto sets a new standard in quick commerce, redefining the shopping experience with its commitment to efficiency, reliability, and customer satisfaction.
Key Core Value Proposition:
- Quick Delivery: Receive groceries and essentials at your doorstep within 10 minutes, minimizing wait time and maximizing convenience.
- Diverse Catalogue: Access a carefully curated selection of high-demand products, ensuring you get exactly what you need, when you need it.
- Product Quality: Rely on consistently high-quality products that meet your expectations every time you order.
- Easy and Adaptive User Interface: Enjoy a seamless shopping experience with an intuitive, user-friendly app designed to adapt to your needs, making it easy to find and order what you want.
- Discounts and savings: Discounts on items and different ongoing offers
How do users experience the core value proposition?
Core Value Proposition | Free User | Zepto Pass member |
|---|---|---|
Quick Delivery | Order delivery in 10 min. Real-time order tracking | Order delivery in 10 min. Real-time order tracking |
Diverse Catalogue | Lots of options in each category:
| Lots of options in each category:
|
Easy and Adaptive User Interface | Easy-to-use mobile application | Easy-to-use mobile application |
Discounts and savings | Regular discounts or offers on items | Zepto pass members pay less delivery charges and get more discounts above basket size of INR 200 |
Natural Frequency of Zepto Users
User | Natural Frequency |
|---|---|
Lazy (Casual/Hybernating) | 1 time a week or 1 Time in two week |
Charged (Core Users) | 2-3 times a week |
Super Charged (Power Users) | 4+ times a week |
Best Engagement framework for Zepto
Engagement Framework | Key Tracking Metrics | Selected | Rationale |
|---|---|---|---|
Frequency | No. of times the Zepto is used to order | Yes - Primary |
|
Depth |
| Yes - Secondary |
|
Breadth | No. of product order in different categories/ subcategories | No |
|
Based on the above framework, we have selected two options -
- Depth = Frequency x AOV (Commitment Building)
- Frequency = X times in Y time (Habit Building)
Define
Active User
- An Active user of Zepto is someone who orders at least 2 times a week. Ordering twice shows an intent to engage with Zepto
- The user who has a Zepto pass and renews the pass when it expires are also Active users.
Frequency
User | Natural Frequency |
|---|---|
Lazy (Casual/Hybernating) | 1 time a week or 1 Time in two weeks |
Charged (Core Users) | 2-3 times a week |
Super Charged (Power Users) | 4+ times a week |
Customer Segmentation
Based on data from Similarweb, 38% of users are in the 25-34 age group, with 66% being male and 34% female. Additionally, 26% of users are aged 18-24. User research indicates that individuals in these categories are typically working professionals who live with either their families or friends/flatmates.
Let's look at the ICP's in more detail. The Customer Segmented as below:
- Persona Based
- Usage Bases Casual/Core/Power
- Revenue Based
Persona Based
| College Students (ICP 1) | Working Bachelors (ICP 2) | Nuclear Family (ICP 3) |
|---|---|---|---|
ICP Overview | - Students living away from home, either in dorms or shared apartments. - Responsible for their meal preparation, either by cooking themselves or hiring a cook. - Seeking convenience and cost-effectiveness in meal planning and shopping. - Likely to rely on technology for daily tasks, including shopping and meal preparation. | - Young working professionals living away from home in urban settings. - Balancing work and personal life, often with limited time for cooking. - May cook meals themselves or hire a cook for meal preparation. - Looking for convenient meal solutions that fit their busy lifestyle. | - Couples and young families, both partners often working. - Cooking at least one meal at home, possibly with a hired cook. - Focused on balanced nutrition and meal planning for the family. - Desire for time-saving solutions that support family life. |
ICP Age | 17-24 | 24-32 | 30-35 |
City (Tier Based) | Tier 1 or Tier 2 City | Tier 1 or Tier 2 City | Tier 1 or Tier 2 City |
Monthly income | Pocket money: 20,000 - 30,000 | above 40,000 | above 80,000 |
Household size | 1-5 people | 1-5 people | 2-4 People |
Members of household | - 2-3 flatmates, living as student, sharing a place | - 2-3 flatmates, living as bachelors, maybe sharing a place | - The couples, and/or possibly with young kids |
Device used | Android + IOS | Android + IOS | Android + IOS |
Frequently Used Social Media Apps | LinkedIn, Instagram, Facebook, Twitter, Snapcha | LinkedIn, Twitter, Instagram, Facebook | LinkedIn, Twitter, Instagram, Facebook |
Mode of payment | - UPI - Cash on delivery | - UPI - Credit Card - Cash on delivery | - UPI - Credit Card - Cash on delivery |
Purchase behaviour for grocery | Prefers to order online | Prefers to order weekly/ daily groceries online | A mix of offline + online purchases. Slowly gaining trust with ordering groceries online |
SKU-wise breakdown | -High-Volume Items: Ready-to-eat meals. Instant noodles and quick snacks. Basic ingredients for simple recipes (e.g., pasta, rice, eggs). Personal care products and basic groceries. -Low-Volume Items: Premium groceries and speciality items. Fresh produce, purchased as needed. | - High-Volume Items: Fresh produce and meats. Pre-cooked meals and quick snacks. Office and personal care essentials. Breakfast cereals and beverages. - Low-Volume Items: Specialty ingredients and gourmet items. Baking supplies, occasional treats. | - High-Volume Items: Fresh vegetables, fruits, and meats. Household staples like rice, flour, and oils. Child-friendly snacks and nutritional supplements. Cleaning products and family care items. - Low-Volume Items: Speciality ingredients and gourmet options for special occasions. Premium products for specific dietary needs. |
What does their average day look like | Morning: Quick breakfast, rush to classes, grab a coffee. Afternoon: Classes and group study sessions; quick lunch from campus canteen or home-packed. Evening: Social activities or part-time job; light dinner with friends at home or order online. Night: Study sessions or relaxation time; occasional late-night snacks or study fuel. | Morning: Quick breakfast, commute to work, often with coffee on the go. Afternoon: Office work, team meetings, lunch at the office cafeteria or nearby restaurant. Evening: Gym or social gatherings; quick dinner preparation or online order. Night: Relaxation with entertainment; light snacks or drinks with roommates. | Morning: Family breakfast, school and work preparations; quick snacks or packed lunch. Afternoon: Work commitments, family communications; lunch from home or office. Evening: Family dinner preparation, activities with children; quality time together. Night: Relaxation with family or personal hobbies; occasional night-time cravings or dessert. |
Key needs | - Affordable meal options. - Quick and easy access to ingredients for simple recipes. - Budget-friendly promotions and discounts. - Efficient delivery that fits into a busy academic schedule. | - Quick meal solutions for busy schedules. - Healthy and varied meal options. - Deals and promotions for regular purchases. - Fast delivery with flexible timings to accommodate work hours. | - Family-sized meal options and bulk purchases. - Nutritional information for balanced diet planning. - Convenient scheduling for deliveries to align with family routines. - Reliable service for consistent quality and availability |
Order Frequency | Low | High | Medium |
Casual/Core/Power
| Lazy (Casual) | Charged (Core) | Super Charged (Power) |
|---|---|---|---|
Natural Frequency of Orders | 1 time a week or 1 Time in two weeks | 2-3 times a week | 4+ times a week |
AOV (Depth) | Low (200) | Medium (250-350) | Above 350 |
Price Sensitiveness | High | Low | Low |
Use Competitor App like Blinkit, Swiggy Instamart | Yes | Maybe | No |
Have Zepto Pass | No | Mostly Yes | Yes |
Revenue Contribution | Average | High | High |
Characteristics |
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Defining Core EnR Metrics
Engagement Framework | Key Tracking Metrics | Relevance | Rationale |
|---|---|---|---|
Frequency | No. of times the Zepto is used to order | Yes - Primary |
|
Depth |
| Yes - Secondary |
|
Breadth | No. of product order in different categories/ subcategories | No |
|
Based on the above framework, we have selected two options -
- Depth = Frequency x AOV (Commitment Building)
- Frequency = X times in Y time (Habit Building)
Engagement
Product Hook
Goal | Lazy (Casual) → Charged (Core) | Charged (Core) → Super Charged (Power) |
|---|---|---|
Problem Statement | Lazy users have lost motivation/ interest to use Zepto and have a frequency of max one order per week. How do we motivate him to order from Zepto and convince him to order more than once a week? | Charged users are the one who orders at least 2 times a week. How do we increase the frequency of orders and increase the basket size |
Current Alternatives | Blinkit, BigBasket, Swiggy Instamart | Blinkit, Swiggy Instamart |
Success Metrics | Z% of lazy users cohort targeted converts to DAU with ≥ X order per week over Y Time X = 2 orders, Y = 30 days | Z% of charged cohort targeted converts to DAU with ≥ X orders per week over Y Time X = 4 orders, Y=30 days |
Solution | Search with Dish name - Users can type the name of a dish (e.g., "Paneer butter masala") into the search bar. The app will return a list of ingredients typically required to prepare that dish, along with relevant products available in Zepto's inventory. | Zepto Meal Pass - A meal pass (on monthly or Weekly bases) that will reduce the efforts of planning food. User can choose their meal dish a minimum of a day before and Zepto will deliver all the ingredients required to your next day's meal |
Metrics to track |
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Engagement Campaign
| Campaign 1 | Campaign 2 | Campaign 3 | Campaign 4 | Campaign 5 |
|---|---|---|---|---|---|
Campaign Name | Search with Dish Name | Meal Pass | Your Daily Partner | Zepto Day | Zepto Pass + |
ICP Match | Lazy (Casual) | Charged (Core) | Lazy, Charged, Super Charged | Lazy, Charged, | Lazy, Charged, Super Charged |
Major Painpoint |
|
|
| Discounts | Delivery Charges |
How Zepto will solve this problem | Search with the dish name feature | Choose a meal plan created by us or customise it as per your need/taste | Your daily need partner - Take a subscription for essential items. Ex. - Milk Subscription, Bread Subscription | Zepto day- A one day in the week where users get additional discounts | Subscribe for Zepto Pass + and pay zero delivery charges |
Goal | Increasing order frequency by providing additional convenience to users | Increasing basket size and AOV | Increasing Order frequency (Habit Building) | Increase order frequency Increase AOV and basket size | Increase order frequency and DAU |
Pitch | 🍽️ Struggling to decide what to eat or tired of searching for each ingredient individually? Zepto’s “Search with Dish Name” feature makes it easier than ever to plan your meals. Just type in the name of the dish you're craving, and we’ll take care of the rest—offering you all the ingredients you need in one go. This way, you can focus on cooking, not shopping. Start using Zepto's new feature and make your mealtime decisions simpler, faster, and more enjoyable. | 🥘 Why waste time planning meals every day when Zepto can do it for you? With our “Meal Pass” campaign, you can choose from a variety of meal plans tailored to your taste, or customize your own. We’ll deliver everything you need to prepare your meals for the day—all in one convenient basket. Say goodbye to daily grocery hassles and hello to more free time and delicious meals. Join the Meal Pass program and enjoy the convenience of personalized meal planning and delivery, all at your fingertips. | 🛒 Meet your new daily partner—Zepto. With our subscription service, you can ensure your household never runs out of essentials like milk, eggs, bread, and more. Just set up your subscription, and we’ll deliver your necessities on a schedule that works for you, with no extra delivery charges for small orders. It’s the easiest way to keep your pantry stocked and your mornings stress-free. Subscribe to Zepto’s daily essentials service and experience the convenience of never running out of what you need, when you need it. | 🎉 Ready for a day full of savings? Introducing Zepto Day—a special day each week where you can enjoy exclusive discounts on your favourite products. Whether you’re stocking up on essentials or treating yourself to something special, Zepto Day ensures you get more for less. Mark your calendar, fill your cart, and make the most of these limited-time offers. With Zepto Day, shopping for groceries has never been this rewarding! | 🚚 Say goodbye to delivery charges with Zepto Pass +! For a small subscription fee, you can enjoy unlimited free deliveries on all your orders, no matter how small. Whether you’re ordering daily essentials like milk and bread or making a big grocery run, Zepto Pass + has you covered. Keep your kitchen stocked without worrying about extra costs—sign up for Zepto Pass + today and make every delivery a breeze. |
Channel |
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Frequency | Twice weekly | Once a week | Daily | Weekly (e.g., every Friday) | Bi-weekly (every two weeks) |
Timing | Early morning (7-9 AM) and late afternoon (4-6 PM) to target users when they are most likely planning meals. | Mid-week (Wednesday), when users might be planning for the rest of the week’s meals. | Early morning (6-8 AM) for essentials like milk, bread, etc. | Full day, with peak promotions during lunch hours (12-2 PM) and evening (5-8 PM). | Early in the month (1st-3rd) and mid-month (15th-17th) to align with typical budgeting cycles. |
Success Metrics |
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Retention
Zepto has 13 Million monthly active users (MAU) which is the second highest in the industry after Blinkit
The retention rate for Zepto is 78%
Which Channel drives the best retention
- Push Notifications - Zepto's push notifications are expertly crafted to capture users' attention at just the right moment. By analyzing customer behaviour, these notifications are personalized and sent at the times when users are most likely to order. Whether it’s a late-night snack or a midday craving, Zepto’s funny and timely push notifications often lead to impulse purchases, making it easier for customers to indulge in their favourite treats. This approach not only drives repeat orders but also enhances the overall user experience by making ordering feel natural and effortless.
- Email Marketing - Zepto's emails have become a standout notification channel, often sparking conversation among users. With witty subject lines and engaging content, these emails are designed to be irresistible—users can't help but click to read more. Whether it’s a special offer or a new feature announcement, Zepto’s emails are crafted to create curiosity and drive action, ensuring they never go unread. This strategic use of email marketing keeps Zepto top-of-mind and fosters a deeper connection with the brand.
- Social Media Campaigns - Zepto's social media campaigns are a cornerstone of its brand recall strategy. With a strong presence on platforms like Twitter, these campaigns consistently engage users and build a sense of community around the brand. The creative and relatable content not only captures attention but also encourages sharing and discussion, leading to continuous engagement. By leveraging social media effectively, Zepto ensures that it stays relevant and connected with its audience, driving both awareness and loyalty.
Define
Voluntary Reasons for Churn
| Reason | Description |
|---|---|
Delivery Time is too Long | Users expressed frustration with extended delivery times, leading to dissatisfaction and eventual churn. |
Wrong Item Delivered | Receiving incorrect items repeatedly led users to lose trust in the service, prompting them to switch to competitors. |
Items Delivered to Wrong Address | Frequent delivery errors to incorrect addresses caused inconvenience and contributed to users leaving the platform. |
High Delivery Fee | Users found the delivery fees too high, especially when compared to competitors, leading them to seek more affordable options. |
Products Were Out of Stock | Frequent stockouts of desired products led users to seek more reliable platforms where their needs would be consistently met. |
Product Quality | Dissatisfaction with the quality of products received led to a lack of confidence in the service, prompting users to switch to other platforms. |
Bad Support Experience | Poor customer support experiences, including slow responses and unresolved issues, led to frustration and a decision to stop using the service. |
Involuntary Reasons for Churn
| Reason | Description |
|---|---|
Shifted to New Address | Users who relocated to areas not covered by the service had to discontinue their usage, despite positive experiences. |
Out of Town | Users who temporarily moved out of town for work or travel paused their usage, leading to a drop in active engagement. |
Issue with Certain Payment Portal | Technical issues with specific payment portals hindered smooth transactions, frustrating users and leading to churn. |
Resurrection Campaign
Campaign Name | ICP Match | Major Painpoint | How Zepto Will Solve This Problem | Goal | Pitch | Channel | Frequency | Timing | Success Metrics |
Swift Returns | Lazy (Casual), Charged (Core) | Delivery Time is too Long | Improved delivery logistics and real-time tracking | Rebuild trust with faster delivery | 🚀 Tired of long delivery times? Zepto has streamlined its logistics to get your orders to you faster than ever. With our improved delivery network and real-time tracking, you’ll know exactly when your order will arrive. Come back and experience the speed and reliability you’ve been missing! | In-App Notifications, Email Marketing, Push Notifications | Twice weekly | Early morning (7-9 AM) and late afternoon (4-6 PM) | Reduction in churn related to delivery time, Increase in order frequency, Positive feedback on delivery speed improvements |
Order Right, Every Time | Lazy (Casual), Charged (Core) | Wrong Item Delivered | Enhanced order accuracy with advanced quality checks | Restore user confidence in order accuracy | ✅ Frustrated with wrong items? Zepto has revamped its quality checks to ensure you get exactly what you ordered. Our new verification process minimizes mistakes, so you can trust that your orders are correct every time. Come back and see our improvements firsthand! | Email Marketing, In-App Banners, Social Media Posts | Once a week | Mid-week (Wednesday) | Decrease in complaints about wrong items, Increase in reactivated users, Improved accuracy ratings |
Your Address, Our Priority | Lazy (Casual), Charged (Core), Super Charged | Items Delivered to Wrong Address | Enhanced address verification system and better delivery coordination | Address issues with delivery accuracy | 📍 Had trouble with deliveries to the wrong address? Zepto’s new address verification system ensures your items arrive at the right place every time. We’ve made it easier to update and confirm your delivery details, so you can enjoy reliable service again. | Push Notifications, Email Marketing, Social Media Stories | Twice weekly | Early morning (6-8 AM) | Reduced instances of wrong address deliveries, Increased user satisfaction with delivery accuracy, Higher reactivation rates |
Affordable & Convenient | Lazy (Casual), Charged (Core) | High Delivery Fee | Lower delivery fees or free delivery for orders above a certain amount | Attract users with affordable delivery options | 💸 Concerned about high delivery fees? Zepto is now offering reduced delivery charges and free delivery on orders over [specific amount]. We’re committed to making your shopping experience more affordable and convenient. Come back and enjoy the savings! | Social Media Campaigns, Referral Program, In-App Notifications | Daily | Late afternoon (4-6 PM) | Increase in orders due to reduced delivery fees, Higher engagement with promotional offers, Improved user retention |
Never Run Out | Lazy (Casual), Charged (Core), Super Charged | Products Were Out of Stock | Improved stock management and notifications for out-of-stock items | Increase order frequency for essentials | 🛒 Never run out of your essentials! Zepto now offers improved stock management and notifications for out-of-stock items, so you’ll always have what you need when you need it. Come back and experience hassle-free shopping for all your essentials! | Subscription Page in the App, Push Notifications, Email Marketing | Twice weekly | Early morning (6-8 AM) | Increase in daily orders for essentials, Growth in subscription services, Higher customer lifetime value |
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