Dive Brief:
- Same-day delivery company Deliv announced a new grocery service called Deliv Fresh that’s partnering with specialty retailers such as Eataly Chicago and Plum Market, as well as meal kit companies and other perishable food providers, according to a company release.
- The company, which offers last-mile delivery to a wide range of retailers, differentiates itself from competitors Instacart and Amazon Prime Now by operating as an add-on delivery option to retailer’s existing ecommerce services rather than as a separate marketplace.
- “We’re able to go to retailers and say, ‘Hey, we’re just the delivery guys. We’re not out to compete with you, and you can keep all the customer data you gain through transactions,’” Daphne Carmeli, Deliv’s CEO told Food Dive in an interview.
Dive Insight:
Grocery ecommerce is still in its early stages, but providers such as Instacart, Amazon Prime Now and Shipt have collectively established a solid foothold in the market. Instacart, the biggest player, currently accounts for about 50% market share amongst third-party companies and plans to be available to 80% of grocery shoppers next year. Amazon and Shipt, meanwhile, have made advances in major U.S. markets and have ambitious plans to continue growing.
Can the market really support another grocery ecommerce provider? Daphne Carmeli, Deliv’s CEO, certainly thinks so.
In an interview with Food Dive, she explained her company is different from most other providers because it operates as an add-on to a retailers’ existing online ordering and checkout systems. Competitors such as Instacart and Amazon Fresh, on the other hand, require shoppers to order through their own platforms, or “marketplaces” as Carmeli calls them.
Customers shop for groceries on the retailer’s site, then at checkout have the option of selecting same-day delivery from Deliv along with a delivery window. Prices vary by retailer, but are competitive with other delivery services. In New York City, FreshDirect’s new Foodkick service offers same-day delivery through Deliv starting at $3.99, and $5.99 for delivery within the hour.
The appeal of Deliv for grocers is that it keeps retailers’ branding front-and-center and lets them maintain control of consumer experience, said Carmeli. Grocers want to grow their ecommerce presence, she said, but they don’t necessarily want to give up control.
“Retailers want to control their brand, they want to control the experience, and they want to capture the transaction data with their customers,” Carmeli told Food Dive. “They want all of that.”
Deliv’s crowdsourcing delivery model has proven effective with companies in other industries, including fashion, home and electronics. Its expertise and established network mean it probably won’t suffer much of a learning curve. But will it resonate in grocery? Retailers have to do the picking and packing of products, which could be a sticking point for low-margin supermarkets that don’t want to pay for the extra labor. Then again, retailers also are paying in one way or another for those Instacart and Amazon workers walking their aisles.
Deliv could be an appealing add-on for grocers that operate click-and-collect models but are reluctant to scale up to delivery. Moreover, Deliv is addressing the key issue of how much control retailers want to have over their e-commerce models. Many grocers that don’t have the know-how or the capital to acquire it are happy to turn over the keys to a full-service provider like Instacart. Others, like Kroger and Wal-Mart, prefer to maintain total control of their services. E-commerce models have typically fallen into one of these two camps, but as Deliv proves, there may be room for an in-between option.
