Engagement & Retention project | Zepto

Metrics to track:

Engagement Framework for Zepto

Imagine you woke up in the morning and realised: There are no eggs, break and milk in the fridge

Or you wanted to cook for lunch or dinner, and you realized some of the items: Salt, veggies are missing

What if some one comes your home missing items in 10 minutes?

We are at stage in quick commerce in India, where the established players see major churn of customers moving to quick commerce as they expand the portfolio

Source: https://www.moneycontrol.com/news/business/startup/quick-commerce-on-govt-radar-ministries-assess-impact-on-kirana-stores-12808501.html

☝️ Impact is very high that it is impacting existing ecommerce as well as mom and pom stores acorss india in Tier -1 cities

In recent financial results, DMart (owned by Avenue Supermarts) has acknowledged the significant impact of "quick commerce" platforms like Blinkit, Swiggy Instamart, and Zepto on their sales, reporting a slowdown in same-store sales growth due to increased competition from these rapid delivery services, particularly in major cities, which is causing concerns among analysts about their future growth trajectory

Existing big ecommerce are entering the space making it highly contested space currently in India. Flipkart Minutes, JioMart entering the quick commerce space. Big Basket coverted itself to quick commerce made this extremly competitive

What is quick commerce?

Companies which promises delivery of goods in 10 minutes to home

Here is the market share of the existing players in quick commerce

Quick commerce market is valued at $3.34 billion in 2024, and is expected to reach $9.95 billion by 2029, a compound annual growth rate (CAGR) of more than 4.5 per cent over the period, said the agency citing the report

Source: https://www.livemint.com/news/india/indias-quick-commerce-industry-sales-rises-over-280-in-two-years-chryseum-report-11727513097988.html

About Zepto:

Zepto is a quick-commerce startup that promises 10-minute grocery delivery. Their core value proposition is ultra-fast delivery of groceries and everyday essentials

It was founded in July 2021 by Aadit Palicha and Kaivalya Vohra. As of August 2024, the company is valued at over $5 billion and operates over 250 dark-stores across ten metropolitan areas in India

Core value proposition of Zepto:

It promises the delivery of the wide selection of grocery, fresh and quality everyday essentials, new categories (recently launched) in 10 minutes or less than 10 minutes at competitive pricing

User Experience:

Customers order through a mobile app predemoniently through easy to use UIUX and completes with digital payments or cash on deliverey, customer know the time it takes to deliver, products are delivered from their warehouse(called Dark Store). It comes with the real time order trackin

Natural fequency:

Casual Users: 1-2 times a week

Core Users: 4-5 times a week

Power Users: 1-3 orders per day

EnR Metrics:

1. Number of active customers in a day / Week / Month
2. Average order value
3. Number of non-essential orders ( excluding groceries, vegetables )
4. Number of orders delivered in promised time
5. Number of orders happy customers. Rating
6. Number of SKUs in a order ( upsold from add page )
7. Total order per customers
8. Total savings of each order
9. Total savings of each customer
10. Increase in number of orders
11. Total number of “Pass” customers
12. Number of orders of “pass” Customers
13. Average value of “Pass” customers

Customer segmentation for Zepto user based on the usage - Fequency, breadth and depth

Summary of the ICPs:

Core user: Kismat Punjabi

She order 4-5 times a week, usually price sensitive, Single living with mother

Needs to trust on cheapest price from zepto for higher orders

Not loyal to Zepto, can switch to any app if the price is lower

Power User: Abhay Singh

New parent, heavy users for multiple needs - Health ( water ), Baby care( milk, diapers), House hold needs( milk, groceries)

Convinience top the list with offers for more order being loyal

Loyal to Zepto currently, but can switch the app if other apps give better convinience

Casual User: Kumud Sharma

Single male living with friends, needs are less hence low usage

Convinience tops the list as orders are less

More categories to shop from help more orders from Zepto

Loyal to Zepto, became habit

Goal : Maximize the active number of users, increase in number of orders and average order value

Sucess Metrics: Active Users, Number of orders, average order value

Problem Statement: Use needs reason to come back to the app at several times in a day to order and add more SKUs to the order

Current Alternatives:

1. Instamart, Blinkit
2. Bigbasket, Dunzo, Jio Mart
3. Dmart, other modern retails outlets
4. Mom and pom shops near the customer

Solution:

1. Convinience. Home delivery most of the time in ultra fast time ( 10 minutes )
2. Pricing - Matching the pricing with other alternatives or giving it for less

User Flow: Opens the app - > Discovers more items on the app -> Gets dicounts on the order -> Order -> Get delivered in promised time -> Quality of the products -> Happy Customer -> Repeat the orders in future

Engagement Campaigns:

Campaign 1:

1. Segmentation: Power User, Core User, Casual Users ( Abhay Singh )
2. Goal of the Campaign: Convert Casual to core, Core to Power User, and Power user to increase the orders with to increase the order size
3. Pitch / Content: Now can you can buy regular used medicines on Zepto
4. Offer: Get Medicines delivered in 10 minutes and no delivery fees, handling charges for first 3 orders
5. Frequency and timing: Early Morning and Evening. When they realize the medicines are over and not in storage at hime. At the time of the check out, Mobile app notifications, WhatsApp notifications/Message
6. Success Metrics: Number of Medicines orders, Order value of the medicines, Addition of on the counter medicines along with other orders

Campaign 2:

1. Segmentation: Casual User ( Kumud Sharma )
2. Goal of the Campaign: Convert casual user to the core user, to order 3-4 orders per week
3. Pitch or Content: Introducing new categories, he/she must be buying from other apps. Categories relevant for the personal " Single men living with friends or family "
4. 1. Gym essentials
   2. Travel essentials
   3. Fashion essentials
   4. Sexual wellness
   5. Medicines
   6. Prepared foods - Zepto Cafe, break fast
   7. Late night snacks - Icecreams
   8. Indulge - Cigeratte, Hookah

Above items are which are in need of the personal of the customers. Highligting these items below the top most used help the user to unlock new categories to improve the usage

Offer: Order from new categories and get free delivery and handling charges for first 3 order

Frequency and timing: Evening and late night (timing), At the time of check out for regular orders. You may like to order, WhatsApp notifications

Success Metrics: Number of orders from different categories

Campaign 3:

1. Segmentation: Core User ( Kismat Punjabi )
2. Goal of the Campaign: Convert Core User to Power User and increase the order value
3. Pitch or Content: Price Match Guarantee. Price sensitive customers give them the trust that they are getting the best price in the market
4. Offer: While ordering any item, mention best price guarantee, any compeition app which gives it lower price, equal amount will be sent to the wallet
5. Frequency and timing: At the time of every order
6. Success Metrics: Faster cart to checkout time, Increase in orders per week, Increase in SKUs per order

Campaign 4:

1. Segmentation: Casual, Core and Power User
2. Goal of the Campaign: Convert Core User to Power User. Power user to increase the orders and order value
3. Pitch or Content: Schedule your orders
4. 1. Causal (Kumud): Preschdule weekly vegetables on chosen day of the week
   2. Core (Kismat): Smart Cart items are prescheduled every week or every month
   3. Power Users (Abhay): Daily essential items like water, milk are prescheduled every day at 6 am and options to add more last night for next morning delivery
5. Offer: Pre-Schedule your orders every
6. Frequency and timing: Everyday night reminder for set schedule for tomorrow morning. At every order, would you like to add set it as recurring order
7. Success Metrics: Number of prescheduled items, App open rates, inrease in average order value

Campaign 5:

1. Segmentation: Power User ( Abhay Singh)
2. Goal of the Campaign: Convert Power User to loyal
3. Pitch or Content: Now get all your baby items at one place. Kid Toys, Kid Medicines, Kid wear, Kid essentials ( Powder, Oil et)
4. 1. This is based on the purchase pattern of the last few orders
   2. Similary patterns can emerge for pet at home, old parents, Pooja items, Health focussed ( Gym related -> Gym T-shirts, healthy bar, Protin bars, Protine Shakes)
5. Offer: Get all your Kid care items on Zepto
6. Frequency and timing: Notification and Whatsapp message. Once in a week with two reminders
7. Success Metrics: Number of items from the Kids section (or relevant section). Increase in orders and order size value

Top Reasons to Churn:

Voluntary Reasons:

1. Non Availability of the Items on Zepto
2. 1. a. User has finalised the cart with 5 items and 6th items is not avaialble on the Zepto. Eg: Botique Green Apple Shampoo, long lasting condoms from durex
3. Price of the items sold on the platform are high compared to the alternate apps or alternate options
4. Delivery fees is high and the total price is higher compared to alternate apps or alternate options available
5. No options for Scheduled order for repeated orders. Eg: Milk, Waters, Bread et which are used everyday and need fresh items. Power users need the option to get them everyday. Players like Country delight who offer them on everyday basic items like milk, allows to add other items like dahi, paneer and take the customer to their platform
6. Unhappy customers on the higher delivery time. If the delivery time shown vs delivered doesnt match, it will be lead churn
7. Unhappy customers on the quality of products are not in desireable state

Involuntary Reasons:

1. Gone to home town for Diwali ( Eg: Indore), where Zepto not available but other app are available and got hooked to the competition app and returing to Pune, never returned to the app
2. Moved to a different city where the service is not available

Negative Actions to Churn:

1. App open rates going down
2. Drop in number of orders per day/week/month
3. Drop in average order value
4. Decrease in ratings for othe recent orders
5. Lower CSATs

Retention Campaigns: