The new generation of commerce focusing on one promise:
the instant delivery
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Quick commerce (or q-commerce) is the new generation of commerce making online grocery orders even more convenient.
Quick commerce actors deliver a small number of items, mostly food items, to customers within approximately 20 minutes, so almost instantly. For now, this new delivery service doesn’t replace a weekly grocery shopping, it remains a kind of a complementary grocery service.
Today, dozens of start-ups are offering this service in big cities with one promise: deliver groceries in minutes.
One of the best-known instant delivery start-ups is Gorillas, which first launched its offer in Berlin (Germany) and began to operate in the US at the end of May 2021.
Some newcomers have recently entered the market with a similar offer: Philadelphia-based Gopuff, Turkey’s Getir, and Dija in London are some of them.
This new service fully adapts to current consumers’ lifestyle, who are now mostly living in urban areas and are almost all digital shoppers.
With successive lockdowns and curfews, customers are waiting for convenient delivery services.
How does-it work?
Usually, instant delivery companies are relying on a strong logistics system consisting of a micro-warehouses network. These micro-warehouses are also called “darkstores”, locations closed to the public. These places are managed by “pickers”, employees preparing the orders made by customers through the brand’s app or website. Most of the time, orders are made for a small amount of groceries or even emergency groceries.
Once pickers have received clients’ orders, they usually have to pick items from the shelves within 3 minutes. Then, they hand the orders off to delivery men for the next step which is the delivery. Delivery staff are driving scooters or bikes to deliver as fast as they can the order to the client’s address. Thanks to the dense warehouses network, the trip between a warehouse and the location is no more than a 1 or 2 kilometers journey.
For this kind of delivery service, the most important matter is the delivery’s speed. Every element within the system is thought to make the delivery as quick as possible.
Gorillas, is an instant-delivery startup based in Berlin. The startup has already expanded in 12 countries and operates now in big cities including London, Munich and Amsterdam. Since May 30 Gorillas began operating in the U.S.
Gorillas offers its clients a range of groceries delivered at home within ten minutes. More than 2000 items are available at retail prices. In order to fulfill the express delivery promise, the company relies on a dark stores network covering its catchment area. The delivery is charged over 2$.
According to Kagan Sumer, chief executive officer and co-founder of Gorillas: “Every crisis accelerates some sort of model, this one accelerated e-commerce grocery penetration”. During lockdowns, people embraced delivery services to enjoy at home restaurant-meals or extra groceries convenience. Regarding the very fast development of instant delivery services consumers should keep these habits for a while.
In the United States another actor of the instant delivery industry seems to have a promising future ahead. Gopuff was created in 2013 in Philadelphia. Originally, the company was an on-demand hookah delivery service. Today, Gopuff is available in about 650 US cities operating through approximately 250 fulfillment centers. The company offers to deliver under 30 minutes a wide range of products answering to instant needs.
Like most of its competitors, Gopuff buys grocery products to sell them to its customers.
In Bloomberg Business Week, the investment bank UBS predicts that online groceries sales will rise to 22% by 2024. Americans spend a lot of money in groceries, and they are more and more comfortable with online grocery shopping.
In France, The Kol startup began with drinks deliveries (wine bottles, beers, spirits and so on) in the evening and even during the night.
Today, Kol is providing a range of groceries just as its competitors. When everything is closed at night and that something is missing in the refrigerator or the pantry, Kol is seen as the only option available.
Why is it interesting?
The delivery market is growing faster than ever since the beginning of the pandemic. The crisis has a true catalyst role in the intensification of the instant delivery model.
The development of these instant delivery startups is mainly coming from a strong consumer insight which is to be able to make some extra grocery shopping when needed. Reasons to use this service are multiple: it could be an unexpected party, a forgotten item in store for tonight’s dinner, a sudden craving for ice-cream etc. Indeed, these young companies are mainly capitalizing on urban consumers impatience and laziness.
These newcomers could reshape the market and threaten established actors. To remain competitive on the delivery market, delivery leaders like UberEats, Deliveroo, Just Eat etc. are partnering with grocers to answer to this need in extra groceries.
We can also wonder how the delivery market will evolve in the future. Maybe we would witness the invasion of drones in the sky all over the world, or perhaps we could imagine our roads full of autonomous vehicles.
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