Caught between an insidious partnership with Instacart-like apps and the adrenaline of ultra-fast deliveries Grocers need to find their own solutions. It will be costly at first but then will pay dividends.
Instacart is bracing itself for war with instant-delivery grocery apps like GoPuff or Gorillas, which has just debuted in the US after achieving Unicorn status in Europe and securing another billion in funding. It’s doing that by launching a new service, called “Priority Delivery” in select markets across the U.S. and Canada, with the aim of: “attracting customers who would have otherwise quickly run to the store for their smaller orders or more urgent demands.” How it will achieve that, without dark stores and without losing a lot of money, has yet to be disclosed.
Once traditional supermarkets chain reigned supreme. Then came e-groceries and app-based services propelled by the gig-economy threatened this supremacy by offering a new kind of convenience. This convenience doesn’t seem to be built on solid ground, relying as it does on Venture Capital benevolence and an underpaid, overstressed workforce. Then came the pandemic and “less than 30 minutes” grocery delivery, which made Instacart look old and, if you think about it, is kind of crazy. Imagine a world where there are more grocery-delivery drivers than supermarket employees.
Instacart has proven to be an insidious ally to big Brands. It has partnered with Walmart in 2020 and look at the latest news: “Walmart has allegedly seen its share of online grocery sales drop from 40% pre-pandemic to about 31%, according to an internal memo seen by Recode. Competitor Instacart has seen its share of online grocery orders rise to 30%, putting it neck and neck with Walmart”. Wait for a second: how do you partner with a competitor? What about all the data that Instacart now has about Walmart’s customers and their habits? What if, after years of sucking data like a vampire, Instacart turns itself into a full-blown grocer?
“Supermarkets are in for the fight of their lives”, writes Gary Hawkins on Grocery Dive. I agree. He says that managing data and a deep understanding of digital engagement will make a difference. Which is true, of course. But since there’s no turning back from the grocery delivery extravaganza I would recommend considering some other points:
- As the Wall Street Journal writes: E-commerce sales are still growing, but could start losing momentum quickly. This will be a blow to gig economists all over the world.
- Invest in your own fleet and in Dark-Stores to serve online orders. It’s going to be tough at first but then it will pay dividends, as Marco Di Falco, COO of EasyCoop, the online service of Italy’s largest consumer cooperative told us. EasyCoop has been using Milkman Home Delivery Platform since 2017.
- Re-balance the market: with big Brands working on their own and offering a solid choice of options, based on freedom and interactivity, the insta-crowd will have to rely on small local stores or disappear by investing more than it can afford.
Not all hope is lost for grocers, that’s my message. As long as a logistically efficient strategy is in place and your branded experience accompanies the customers from checkout to doorstep, harvesting data but also showing that you can take care of them without relying on dry, uninterested third-party apps.
Written by: Adamo Dagradi, Content Manager