Consumer Expectations Reshape Retail Delivery

Mar 6, 2022 by Rocquan Lucas

I’m embarrassed to admit it, but retail delivery is my guilty pleasure.

I purchase most of my groceries online. I pay for Amazon and ASOS subscriptions so that my goods arrive in 2 days or less. My heavy use of apps like Uber Eats and DoorDash has taken a toll on my discretionary income. And my car sits in its parking spot for days at a time. 

To explain this through an outdated phrase from social media, it’s the convenience and speed for me.

Many share my love for delivery and its benefits. According to a study from Lending Tree, from July 2020 to July 2021, 77% of Americans used on-demand delivery services. The same study reports that 70% of US consumers are willing to pay additional fees for groceries to avoid traveling to the store. The popularity of Amazon Prime strongly suggests that customers are OK with paying a significant premium for faster, “free” delivery as well. 

To quickly meet the demands of convenience cravers, retailers and brands are diligently boosting their delivery capabilities. As with many quick ramp-ups, the key strategy for scaling delivery offerings is technology partnerships. 

For delivery of goods in under an hour, the obvious team-ups are with on-demand platforms like DoorDash, Instacart and Uber, but companies are also choosing white-label delivery solutions as well, to maintain more control of customer data and relationships.

Drones and More Drones

Retailers and brands are also trialing autonomous delivery – ground and air – to execute ultrafast orders. Mobility startups Nuro, Zipline, Flytrex, Starship, and 42dot have collectively raised over $3B in total funding, supporting their plans to scale their partnerships in retail. 

While restaurant orders and convenience goods represent the bulk of on-demand items, it won’t be long until we see more large grocery orders, apparel, and other products delivered to consumers lightning fast as well. 

While I’ve made my preference for speed clear, it isn’t the end all be all. Today, speed balances against cost, reliability, and service to influence how much patience convenience-seekers show. Tech companies such as Point Pickup and Deliverr help by offering flexible solutions that enable same-day, next-day, and two-day delivery across the US.

Partnering for Sustainability

Moreover, as Rebecca shared in her Sundays with Shoptalk entry last week, consumers also consider companies embracing sustainability. Olive with Saks Fifth Avenue, Tesla with PepsiCo, Starship with Save Mart and Gatik with Walmart are all examples of companies working together to enable efficient and sustainable movement of goods in the middle and last-mile. 

As much as retailers must cater to consumer needs, they must also take costs into consideration. Online ecommerce continues to have slim margins, making click-and-collect and curbside options smart ways to alleviate costs while still keeping customers happy. Some shoppers even prefer pickup over delivery: Each has distinct convenience advantages, and smart retailers will offer both. 

With so much innovation happening in this space, last-mile, delivery and the supply chain are key content areas at Shoptalk. To dive into these topics in Las Vegas, here are a few Shoptalk sessions worth attending: 

  • Keynote Interviews with the CEOs of Uber and Instacart
  • Track Keynote: "Leaning Into the Local Delivery Movement" featuring DoorDash
  • “Meeting Consumer Demand for Faster Fulfillment and Delivery” featuring Tractor Supply, Ulta Beauty and Shipt
  • "Using Reverse Logistics to Satisfy Customers and Grow the Business" featuring Target and Fernish
  • “Robotics and Other Fulfillment Technologies” featuring tech companies Deliverr and Arrive
  • “Click-and-Collect, Curbside and Delivery Technologies” featuring startups Starship, Olive, Bluedot and Point Pickup
  • “‘Shark Reef’ Startup Pitch” featuring early-stage startups Via.Delivery, Returnmates and EcoCart

These conversations will help retail and brand executives better understand the opportunities and challenges in the last-mile and provide the audience with key insights to take back to their organizations.

I look forward to connecting with those attending Shoptalk in a few weeks and exchanging anecdotes on the greatness of delivery. 

Happy Sunday,

Rocquan Lucas
Content Director