11 Jan 2023
Updated on April 3rd, 2023

Grocery Inventory Management Software Development in 2023


Surbhi Bhatia

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Grocery Inventory Management

Grocery store owners often face inventory problems that have a negative impact on their overall business. These challenges can affect everything from customer satisfaction to gross profit to the Return On Investment (ROI) of their business. Groceries businesses must manage inventory well, not only because of the challenges of visibility and manual processes but also because of the difficulty of maintaining real-time visibility.

The inventory loss in grocery stores is more than twice that of retail stores.

This illustrates that managing and delivering new orders becomes more complex as a business grows. Again, grocery store management system comes to your rescue. The grocery store management software automates manual inventory handling, allowing you to optimize stock use.

We don’t need to be taken seriously. Here are the market stats you can trust!

  • Implementing IMS (Inventory Management Software) has resulted in a 25% productivity increase and a 30% improvement in stock management.
  • A survey report found that 32% of American grocers were interested in investing in new inventory management technologies to provide real-time reporting.

These stats show that top inventory management software is an excellent tool for businesses to track all outgoing and incoming stock efficiently. As a result, it meets customer needs quickly and easily while reducing the risk of stockouts and overstock.

Before diving into learning more about grocery store inventory system, let’s look at an on-demand delivery app for grocery shopping.

What is a Grocery Delivery App?

An app that allows users to order groceries online is called a grocery delivery app. App owners are responsible for ordering groceries and delivering them to users’ homes in accordance with their terms.

Many grocery apps require a subscription, meaning you will have to pay monthly or annual fees along with the cost of groceries.

Startups have the opportunity to create different types of grocery delivery apps. These are the two most popular apps:

  • Aggregators
  • Marketplaces

1. Aggregators

Are apps that provide a list of nearby grocery stores for platform users. often include major grocery chains like Walmart. How does this model impact applications?

  • The platform user then has the option to choose from the displayed stores.
  • The app allows users to add grocery items to the cart directly from the online menu.
  • They complete the checkout and pay.
  • After confirmation of an order, the user can track their order in real time until they receive the goods.

Only the store owner or the app’s delivery staff are responsible for making the delivery.

These mobile apps are dependent on the collaboration between startup founders and store owners.

2. Marketplaces

The marketplace grocery apps is a business model that look a lot like aggregators. However, they differ in the core function of their operation.

The grocery app allows nearby merchants to list their groceries, and customers can contact them through the platform. It acts as a means of communication between sellers and buyers.

Marketplaces must provide a way for merchants to communicate with app users.

The most important question is:

What is inventory management?

Because they directly impact how products are sold or distributed, inventories play an important role in an organization’s supply chain.

If you are limited in the number of products you can store in your warehouse each month, you must keep track of incoming and outgoing orders. As a result, your customers may end up receiving late or no orders.

Inventory management is a way to balance production, cash flow, supply purchases, and market demand to maximize your resources.

Inventory management is typical:

  • Evaluation of suppliers and shipments
  • Monitoring inventory levels
  • Warehouse security optimization
  • Add QR codes to your goods
  • Receiving and recording new stock
  • Plus, many other things

This will be covered in greater detail, but let’s first discuss the various types of inventory management and how they can help each aspect of your production process.


Using a grocery store inventory software is a good idea. It will bring many benefits to everyone involved.

  • Labeled goods make it easier to trace them – from the manufacturer to their destination.
  • It is possible to quickly identify and locate affected products in the event of a recall.
  • It is easier to spot illegal or fake products.
  • Machine-readable codes allow for fast and accurate recording of the supply chain. This speeds up processes.
  • A small barcode scanner can capture more data, helping to identify the provenance.
  • Accurate inventory and real-time stock updates reduce the costs of overstocking or losing income due to understocking.
  • Integration seamless between online and in-store order fulfillment

There are five types of inventory management.

Grocery Inventory management can be divided into five main categories. They differ in how they are produced.

Let’s take a look at them:

1. Materials: Items used in the production of goods or intermediate materials. (e.g., paper manufacturers use cellulose fibers made from wood).

2. In-progress: Unfinished Products or Products that aren’t yet ready to sell (e.g., products that require final decoration or finishing)

3. Packaging material: items used for packaging (e.g., boxes to ship products).

4. Supplies: Components that are part of the production process but not necessarily a part of it (e.g., gloves and security masks).

5. Finished Goods: products available for sale.

Be aware that not all inventory types are appropriate for your business.

An e-commerce company that does not produce its products might not require MRO supplies to be included in the inventory.

Now that you understand the basics of inventory management, let’s ask a crucial question.

What are the Benefits of a Grocery Inventory Management System?

Listed below are a few benefits of using grocery inventory management software:

1. Saving Money

Mobile apps can help you save money because they are precise and track all items in real-time. This will help your business save a lot of money. In addition, these apps can also reduce the number of employees, which will help you save money over time.

2. Save Your Time

The best thing about inventory-based grocery delivery app development is that they save customers valuable time by digitizing the process. The manual process would have been more efficient, but recording and collating the inventory items would have been much longer.

3. Real-time Information

Inventory management apps ensure all information is easily accessible with just a click. In addition, these inventory apps can be customized to check on goods in transit, stock, or delivery. The apps also allow for updates.

4. Simple to Use

Mobility makes it simple to track your inventory workflow. Multitasking is a crucial priority for any process. The inventory management mobile app makes it easy for users to do multiple tasks simultaneously.

Inventory apps provide the best information. They give you a better view of the stock level and the share price.

There are no more days when accountants and clerks do inventory management by sifting through data sheets, clipboards, and calculators to manage the inventory of organizations. These inventory management apps are sleek and sophisticated. They use the latest technology and can be used in conjunction with other apps. This reduces the need for human resources but still requires a human to make decisions. An inventory management app that works well will allow you to spend less time managing your inventory than the manual forms and, instead, use the time to do more important things.

Three inventory management methods

Once you understand the theory behind grocery inventory management software, it is time to get into the practice.

We will focus on three methods to give you control over inventory while increasing your profits and reducing costs.

This is not an exhaustive list of all methods, but it covers some of the most useful ones.

Let’s take a look at them:

1. Just in Time (JIT).

Just in time is a popular method for managing inventory, and it’s not hard to see why.

It can be very profitable because you focus on having little to no inventory. This helps you balance customer loyalty & satisfaction and business efficiency.

JIT is focused on answering questions:

  • What’s needed?
  • What is the best time to use it?
  • How much is it needed?

The next step is to deliver the goods in the fastest time possible without compromising quality or increasing cost.

JIT is a Japanese term for “Heijunka,” which means “Leveling,” and it consists of three elements:

  1. Takt Time: the frequency you need to produce one or more components of a product to satisfy customer demand (e.g., three pieces per hour).
  2. Continuous flow is the practice of producing one piece at a given time in order to meet the estimated time.
  3. A pull system the approach to supplying only the most essential requirements to customers.

Let’s take, for example, a handmade cosmetic eCommerce company.

Implementing JIT would allow you to produce new cosmetics each time a purchase order is received instead of storing them in a warehouse.

This would allow you to be flexible enough to gauge customer demand in your market and prevent production losses.

2. Economic Order Quantity (EOQ).

Although EOQ may sound complicated, it is very simple.

EOQ, in short, is a formula that allows you to calculate your ideal inventory level and determine order quantities based on market demand.

Before we can get into the formula, it is important first to break down its components.

  • Q* best order size
  • Order Cost (Costs involved in packaging, delivering, and shipping)
  • H. cost of carrying (costs associated with holding a particular product)
  • D: demand (annual units demanded)

3. ABC analysis

The Pareto principle states that only 20% of causes can cause 80% of the consequences. ABC analysis is derived from this principle. This is useful when you have a mixture of products.

This statement could be translated to inventory management, and it would indicate that not all products can be considered equal. ABC analysis suggests that you should prioritize products that are more profitable and sell quickly.

You should classify your products, materials, or supplies into three categories.

  • A = Most important
  • = Moderately Important
  • C = Less important

After you have categorized your inventory according to the previous segments, add 2 percent to each category.

  • Percentage: Annual Consumption Value of an Inventory Item
  • Total number of products

These numbers can’t be fixed. You should determine them based on your goals and actual numbers. Take this example:

  • A = 10%
  • = 20%
  • C = 70%

This classification will allow you to identify the most valuable products in your inventory and help you focus your efforts on increasing stock levels for that product or product.

5 Ways Inventory Software Addresses Today’s Challenges

Although there are many ways to manage food business inventory, eventually, they all lead you to one of three issues: too much inventory or insufficient inventory. So let’s take a closer look at each and see how an IMS can help us overcome them.

Also ReadHow much does it cost to develop a food delivery app?

# Challenge 1 – Storage and Freshness in Grocery

This is an important aspect of the grocery business. You can’t deliver groceries directly from farms to your customers, so it is important to have the proper storage approach before they are offered, packed, or ordered. Groceries must be kept fresh. This is something that only a reliable system can handle.


Automation is the most important benefit of integrating inventory software. For example, you can have real-time inventory visibility as your stock counts update automatically after a sale. This feature allows you to deliver a great customer experience by avoiding stockouts and overstocking.

# Challenge 2 – Inventory Loss

Inventory loss due to theft, spoilage, or damage is another challenge when managing a grocery shop. Groceries can also become unconsumable due to expiration dates if they are not sold within a reasonable time. This results in a decrease in profit potential.


Good grocery inventory management software can help you manage shrinkage. It also allows you to track inventory data in real-time to aid you in understanding the stock’s life cycle. You can organize older products and items with a shorter lifespan, so they are sold first.

#Challenge 3: Phantom Inventory

Phantom inventory is one of the first challenges in inventory management. It can be difficult to make the right decisions for your store if your inventory stock level is not in line with what you have in stock.


With the POS (Point of Sales) feature, an efficient grocery inventory management software can help address the problem of phantom inventory. For a kickstart, the IMS validates the list using sales data from your POS system. It will also help you quickly identify and fix any inventory issues and direct you to any mismatches.

Challenge 4: Maximum Warehouse Efficiency at Minimal Cost

It is difficult to manage warehouse space efficiently. It can be difficult to manage warehouse space efficiently, from planning and designing warehouses to accommodating grocery items according to their sizes and shelf lives. Additionally, inventory tracking in a warehouse to manage grocery orders requires a lot of labor. These steps include receiving, packing, shipping, and storing grocery products.

If warehouse management is not done well, it can lead to overstocking or understocking products, creating a gap between demand and supply.


No matter how small your business is, integrating inventory software in small businesses addresses warehouse inefficiencies with performance metrics such as inventory turnover, processing speeds, customer satisfaction, etc. In addition, an IMS can track data to monitor seasonal and historical trends.

An inventory management system optimizes storage space and maintains the correct flow of inventory. In addition, this system automates picking, packing, and shipping, thereby optimizing space.

# Challenge 5 – Chaotic Customer Service

Inadequate monitoring causes unnecessary delays in complaint resolution and queries. This leaves customers dissatisfied. Customers distrust the business when they experience similar incidents again and again. This can lead to mismanaged inventory, which ultimately leads to happier customers.


An IMS tracks inventory movements in real-time, which helps to identify the source of the problem quickly and speeds up the resolution of complaints. It makes it easy. Additionally, a POS feature allows business owners to keep track of stock levels, which aids in forecast analysis and meeting the growing customer base’s future needs.

When is the best time to develop an online grocery delivery app?

Is it the right time to start a grocery delivery service? As an entrepreneur, this is the best time for one.

Having a grocery delivery product can be very lucrative. However, two factors are key to making now the best time for a grocery delivery app.

1. The Pandemic is the First Factor

Because it allows you to shop safely and without violating social distancing rules, the Covid-19 pandemic caused a spike in grocery app use.

Grocery delivery companies now promote contactless delivery as a strength in convincing brick-and-mortar customers.

A grocery delivery app is another reason why your startup should have one.

A research reveals that 58% of customers value convenience above all else.

A simple-to-use app that allows them to shop easily is one way to appeal to this 58%.

2. Successful Examples Are The Second Factor

Fridge No More is a new app that allows users to order groceries and receive them in 15 minutes. To meet the needs of customers within the timeframe, Fridge No More has a well-distributed network of delivery agents.

Users can order what they want, regardless of the size or cost. Fridge No More is able to help with everything from a single pint of ice cream to a complete grocery list for the entire month.

After seeing their app’s success in Russia, Gladkoborov & Danilov created this app.

The app optimizes speed. They are currently focusing on densely populated areas. Fridge No More is available in both the iOS and Android app stores.

Final Thoughts

Customers today are looking for fast, simple, and inexpensive online shopping solutions to meet their needs. Groceries are no exception. To survive in today’s increasingly competitive marketplace, store owners must offer a memorable shopping experience.

Groceries must ensure that all elements of their business, from employees to cash management, are safe to ensure exceptional customer experiences.

Techugo: an efficient delivery app development company is the industry expert in this field that fabricates solutions for enhanced user experiences. We can help you create your grocery store in a short time and maximize customer satisfaction and revenue. In addition, your business will have better odds of being profitable and generating more revenue if you manage your inventory properly.

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