On-Demand Delivery: Becoming The New Norm

Same day "last-mile" delivery market (especially fresh food & groceries) has seen some major growth in the last few years. This in result has created a niche market for same day and express day delivery as a service by retailers.

Today, almost all the key players in major markets are providing same day or express (2-3 hours) delivery as a check-out option, and leveraging this is going to be crucial for brands.

Although the current trends are mainly grocery/fresh-food driven, same-day delivery across all categories will see major growth in the coming years.

How are retailers capitalizing?

· Click & Collect, Click & Pick

This, in my sense, is a truly achieved omnichannel success, where the big box retailers have now realised that their national off-line stores can finally be turned into fulfillment centers. Almost all the major retailers in US now have a click & pick service, where the customers don’t even have to get out of their cars once they make a delivery appointment online or via their apps.

If click and collect, curbside was the first step, last mile local deliveries is the next.

· Click & Local Delivery:

Another major achievement for retailers that has been powered by the likes of Instacart/Deliv/Shipt is the realization that they can now deliver straight from their stores by outsourcing the fulfillment to a 3rd party. This reduces a lot of pressure on the retailers to build logistics as most of the heavy lifting is being done by a partner service like Instacart.

“We’re saving customers time by leveraging new technology and connecting all the parts of our business into a single, seamless shopping experience: great stores, easy pickup, fast delivery, and apps and websites that are simple to use,” Walmart U.S. President and CEO Greg Foran

It's a hot space:

• With Amazon now offering primenow same day deliveries by also adding whole foods in the mix and already existing amazon fresh, it’s going to be an interesting year ahead.

• Shipt's membership tripled since it got acquired by Target. And Shipt now has became a center of Target's strategy to make the stores it's fullfilment centers.

"Our stores are at the center of our digital growth," CEO Brian Cornell told CNBC. "They are fulfilling the majority of our online orders. … They are center to everything we are doing at Target.

• After launching Google Express, Google has also recently made a stride in the space by doing a $40 million investment in same-day delivery platform Deliv.

At the crux of this is the basic idea that consumers want convenience and speed when expecting their online orders delivered, and options like "store to door" either powered by retailers own supply chain or by the likes of Instacart is going to be a major factor in the next few years.

How can brands leverage?

1. Focusing on being available:

It’s important to start investing in being available at stores for locations where key retailers have started offering online click & pick(collect) and same day deliveries. And communicating the same via your websites, sponsored ad strategies is the key.

A great initiative would be to start offering dynamic Local Where To Buy vs the traditional "Find us" maps or stockists on the websites.

2. Focusing on partnerships with On-Demand Services

It’s time to figure out how can the likes of Instacart/Shipt/Deliv can be used for promoting products in a more calculated way. These services purely cater to the customers who are looking to grocery/food shop at that very moment, and hence it certainly makes sense to be in the right place at the right time.

At the same time, a partnership will also help understand trends for the local demand for SKUs via instacart/shipt/deliv insights.

3. Local Online Presence

There is a further need to focus and optimize on the local element when dealing with online presence. Rather than driving product specific interest to the website, they can now be driven to the PDPs of same-day delivery services like Instacart or by integrating Instacart/Shipt etc on the existing where to buy tools.

While it will be interesting to see how brands leverage last-mile delivery as a selling/purchase point, with all major retailers playing hardball as they try to compete with each other in the quick delivery game, the customers are the true winners.