Dive Brief:
- Gopuff announced last week it has teamed up with U.K. supermarket chain Morrisons to offer rapid delivery of the chain's grocery products through a multi-year partnership.
- Through the deal, Gopuff’s platform offers “thousands” of the grocer’s fresh food, grocery and private label products for delivery in 30 minutes.
- Gopuff controls the delivery supply chain while Morrisons handles the manufacturing, wholesaling and retailing, according to the release, allowing for a "tailored" and localized shopping experience.
Dive Insight:
Gopuff and Morrisons' partnership is the latest move by a major U.K. grocery player to turn to a third-party provider for quick service. It underscores the growing demand for instant-needs delivery and the new fulfillment models retailers are using to capture it.
Daryl Porter, senior partner of omni operations at Tomorrow Retail Consulting, told Grocery Dive earlier this year that U.K. grocers established branded delivery services faster than their U.S. counterparts, and are now signing up third-party providers handle more of the back-end operations.
"Sainsbury's, Tesco, Asda — they all have branded services ... and over time, they started this battle for the best experience in doorstep [service] and they really hurt their overall profitability, and now you see they're reverse-engineering that and trying to pull away from that and push more of that contact-less, drop-and-go delivery," Porter said, pointing to Asda's partnership with Uber Eats as an example.
It's a trend Porter could see U.S. grocers follow as they try to meet customer demands while keeping e-commerce fulfillment costs down.
“Nine times out of 10, customers want speed and lower delivery fees, and that will win over branded delivery almost every time,” Porter said.
Marketplace companies DoorDash and Instacart have rolled out rapid service for their retail partners in recent months. Market leader Gopuff now operates in hundreds of markets while startups like Getir have zoomed into major cities like New York and Chicago.
These rapid delivery companies are forging partnerships with established players. Supermarket chain Tesco last year teamed with ultrafast grocer Gorillas to offer 10-minute delivery, while Gopuff linked up with Uber to offer fulfillment services for its "everyday essentials" online storefront.
Gopuff, which is in more than 20 cities in the U.K., officially launched there last November, a few months after announcing the acquisitions of U.K. grocery delivery startups Fancy and Dija. Already, Gopuff has gained 40% category share since its launch, according to data from YipitData cited by Gopuff in the Morrisons announcement.
In February, Gopuff announced it hired former Booking.com executive Bryan Batista to lead its international business strategy. Earlier this month, Gopuff launched in France.
