07/28/22

Retail Trend: Opportunity During Rapid Delivery’s Inflection Point

It’s becoming apparent that highly-subsidized quick commerce platforms like GoPuff, Gorillas, Joker, and more, which came crashing into major U.S. marketplaces over the past three years, are now having to face the realities of their outsized, investor-fueled expectations.

As many of them cease operations and shut down entirely, there are signs of a silver lining as new ideas are emerging for established retailers to win greater market share by creating their own delivery services, first-party fulfillment hubs, and high-performing warehouses.

Target boosts local, owned-delivery bet with new hubs and dedicated fleet
Target is opening three more delivery hubs in Chicago and Denver to get local orders to customers faster and roll up its operational costs as part of its store-as-hub strategy. The sortation centers take orders packed in local stores and sort them quickly and efficiently for local deliveries. Target

Walmart expands grocery capability with first-of-its-kind freezer trailer
Walmart Canada is adding a custom built, 60-foot multitemperature-zone refrigerated trailer to its fleet to boost perishable grocery delivery options. The trailer is the first of its kind in North America. Walmart

Free delivery for online orders better be fast, too
Speed of delivery, not cost, is becoming the most decisive factor for consumers. A majority of shoppers expect “free shipping” orders to arrive ASAP, yet most retailers still use 5-8 day shipping options, which is eating into revenues by driving cart abandon. Press Release

The prize is high: online grocery forecast to be a quarter-trillion-dollar market by 2025
The U.S. digital grocery delivery and BOPIS market has been projected to grow to $243 billion over the next three years, powered in part by Amazon Fresh’s expansion, Walmart’s dominant push into grocery, and innovative new initiatives from grocers like Kroger, Ahold Delhaize, Albertsons and more. eMarketer

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