What about the price aspect of using grocery delivery service like Instacart? InstaCart charges a 23% markup on grocery bills which is a significant amount for average households. During the pandemic it is more of an “essential service” but when things are back to normal it is more of a “luxury service”. The other difference between grocery delivery and other types of e-commerce purchase is that you can typically find price matching items (if not cheaper) when purchasing online even when factoring in the shipping cost (thanks to Amazon). Grocery is a different story due to the low margin so online grocery shopping is more expensive than offline by a significant amount.
Another aspect of grocery delivery retention is encoded in its customer model -- Walmart+, Instacart, Shipt make the most sense for consumer when they are bought on a 12-month subscription. This means that even if there is a vaxx tomorrow, you have a huge number of people who have already crossed the 28-day habit threshold and have paid for another 6 months of service. They'll likely keep using it through that period, which we believe will ultimately mean good retention for these services.
Found this by searching "grocery delivery" on Twitter. Love when I come across great reads on grocery. We are getting ready to launch a delivery concept that is cost-effective, sustainable, and more convenient that the current options. Happy to get your thoughts if you wanna see the deck.
Our family is a big fan of https://anycart.com/ - we've cooked different pasta, Thai, salad, and chicken wing meals (and used it to order a la carte from nearby grocers Whole Foods and Safeway). It's sort of fun to search by meals.
With higher ticket size and associated delivery costs online grocery could be profitable in the US, but in countries like India where the products sold are low margin with small ticket size & almost negligible delivery fee, startups like Bigbasket are burning through cash even when they have introduced grocery items from their own brand& offered yearly subscriptions for as low as $3. Do you think there can be a way to profitability for these startups?
What about the price aspect of using grocery delivery service like Instacart? InstaCart charges a 23% markup on grocery bills which is a significant amount for average households. During the pandemic it is more of an “essential service” but when things are back to normal it is more of a “luxury service”. The other difference between grocery delivery and other types of e-commerce purchase is that you can typically find price matching items (if not cheaper) when purchasing online even when factoring in the shipping cost (thanks to Amazon). Grocery is a different story due to the low margin so online grocery shopping is more expensive than offline by a significant amount.
Another aspect of grocery delivery retention is encoded in its customer model -- Walmart+, Instacart, Shipt make the most sense for consumer when they are bought on a 12-month subscription. This means that even if there is a vaxx tomorrow, you have a huge number of people who have already crossed the 28-day habit threshold and have paid for another 6 months of service. They'll likely keep using it through that period, which we believe will ultimately mean good retention for these services.
Reilly
Found this by searching "grocery delivery" on Twitter. Love when I come across great reads on grocery. We are getting ready to launch a delivery concept that is cost-effective, sustainable, and more convenient that the current options. Happy to get your thoughts if you wanna see the deck.
Our family is a big fan of https://anycart.com/ - we've cooked different pasta, Thai, salad, and chicken wing meals (and used it to order a la carte from nearby grocers Whole Foods and Safeway). It's sort of fun to search by meals.
With higher ticket size and associated delivery costs online grocery could be profitable in the US, but in countries like India where the products sold are low margin with small ticket size & almost negligible delivery fee, startups like Bigbasket are burning through cash even when they have introduced grocery items from their own brand& offered yearly subscriptions for as low as $3. Do you think there can be a way to profitability for these startups?