The Wall Street Journal writes about how Door Dash and Uber Eats have ambitions that “are bigger than your lunch … They are after a whole new category of logistics and are increasingly billing their specialty not as food but as speed and convenience. Companies say that so-called next-hour commerce–which includes delivering everything from drugstore staples and alcohol to pet food on demand–is the prize that could sustain their growth and eventually help them turn a profit.”
“Amazon powers next-day delivery. We’re going to power next-hour commerce,” Raj Beri, Uber Technologies’ global head of grocery and new verticals, tells the Journal.
There are two things happening here. The Journal points out that these food delivery apps need “to hang onto consumers they won during pandemic lockdowns,” which means expanding into new categories and offering improved service. At the same time, the story says, “Grocery and alcohol orders are typically more lucrative than food, bringing in higher revenue. Apps say they can lower their delivery costs by bundling groceries and other nonperishable goods with hot food, and drivers can handle multiple orders at a time without having to worry about orders getting cold.”
The Journal writes that “Instacart, which commands more than half of U.S. grocery delivery sales according to YipitData, is offering lower commission rates for stores that commit to exclusivity and has emphasized shoppers’ larger basket sizes. DoorDash … is pitching its delivery speed, larger customer base, and experience delivering food from restaurants to draw grocers with prepared food offerings. Uber is touting its international presence, which is appealing to grocers with a global footprint, Mr. Beri said.”
- KC’s View:
- We’re reaching an interesting fork in the road, I think. I was reading a piece the other day in which an expert on these things suggested that speed and convenience are becoming less important to online shoppers than a low cost of delivery, which would seem to be the opposite of what these delivery contractors are saying.
Frankly, I’d bet on the latter approach. I think that in the end, e-commerce always has been more about convenience, about freeing me up from shopping that is a chore to do things that are m ore pleasurable and rewarding. Which is why bricks-and-mortar stores have to make shopping less of a chore and more of a pleasure.