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The growing significance of on-demand grocery delivery to retailers

By November 10, 2022Blog

Go out to the supermarket? Order from home? A mix of both? Consumers are opting for more of a multichannel grocery shopping experience. Whilst in-store shopping remains the popular choice, online grocery delivery serves as a handy option whether consumers are doing their main grocery shop or weekly/monthly top-ups to accompany their in-store visits. There is fierce competition for brands to meet consumers’ rising expectations as grocery shopping behaviours and habits continue to evolve. Brands are reacting to consumers’ changing grocery habits in order to reach their consumers and stay on their minds whether they are shopping in the digital or in-person world.

On-demand grocery delivery platforms (also known as rapid grocery delivery or quick-commerce) have attracted attention in recent months. These apps offer the convenience of delivering grocery essentials to your door in less time than it would take you to go out and get them; usually within 60 minutes and in some areas less than 30 minutes!

We’ve all heard of Uber Eats and Deliveroo- two of the biggest players in food delivery. Many of us will be familiar with these apps when it comes to ordering our well-earned Friday night takeaways. But let’s talk about their expansion into grocery delivery. Whilst these apps branching out into on-demand grocery delivery is nothing new, the pandemic certainly boosted their popularity. Many looked to these services to escape busy supermarkets and order from the safety of their homes. Consumers also turned to these services to avoid competing for a delivery slot or having to book one weeks in advance due to the issues supermarkets faced with fulfilling the surge in orders coming through on their sites. As well as Uber Eats and Deliveroo, similar services like Getir, Gorillas were also popular. Rather than working with retailers, these apps operate out of their own warehouses and are available in a limited number of UK cities. Understandably, popularity of rapid grocery delivery has dropped in today’s post pandemic world, but nevertheless there remains a demand.

Recognising the opportunities on-demand grocery services present, big supermarkets have been popping up on these apps. We have seen Sainsbury’s, Asda, Morrisons and the Co-op join forces with both Deliveroo and Uber Eats to offer quick grocery delivery in areas where they are available. Tesco has also partnered with Uber Eats to support its rapid delivery service (‘Whoosh’). What’s more, this month Uber Eats added Iceland Foods to their growing number of partnerships. Interestingly, it seems on-demand delivery services aren’t limited to groceries. Boots also recently teamed up with Uber Eats earlier this month to allow consumers to buy beauty or healthcare essentials, all delivered in 30 minutes by Uber Eats couriers. In contrast to the increasing number of retailers who are tapping into this space, apps like Gorillas and Getir have encountered challenges. Whilst their models were successful during the pandemic, they have undergone some form of restructuring including cutting staff numbers and the number of cities they operate in, or in the case of Jiffy, stopping rapid grocery delivery altogether.

Will on-demand grocery delivery apps remain popular as we continue to see the prices of essential goods increase around us?

Whilst the convenience and speed of delivery these apps offer is a big plus, they do come at a premium: higher product prices and delivery fees. With consumers feeling the pinch, there may be challenging times ahead for the on-demand grocery delivery space. With fears surfacing around consumers’ changing shopping habits to try and cut down costs, manufacturers and brand managers are curious to find answers to how consumers are currently interacting with their brands within online grocery delivery platforms as well as the ways consumers’ shopping habits are shifting with the rising cost of living.

Launchpad will work with you to design a research investigation that asks the right questions.

Tailored to your goals and objectives, your research study will uncover the answers to your pressing questions. Accompanied shops, store intercepts, eye tracking or shopping functionality with online surveys are just a few of the research solutions our team has extensive experience in. Whether you would like to gain insight into your consumers’ current and changing shopping needs and behaviours or explore user experience in the online (or in-store) grocery shopping journey. Or if you’d like to unearth new opportunities to tailor campaigns to reach your consumers whichever platform they choose to use. We can help you access these insights.

Curious to find out more? Get in touch with us today info@launchpadresearch.com