Typical same-day delivery offered by major retailers usually required a minimum of one to two hours, but startups are fashioning a new form of consumption that allows customers to buy only what they need, when they need it.
One company pioneering the business in America comes from Russia. Buyk debuted its service in New York City at the end of August. A user orders through an app, and the groceries are delivered within 15 minutes. There is no delivery fee, no minimum purchase. You want a single plastic bottle of water delivered? Not a problem.
Mini warehouse hubs called “dark stores” form the backbone of the company’s service, with 20 such sites in New York City at present. Buyk plans expansion to Chicago by the end of this year, bringing its total number of dark stores nationwide to about 100.
When an order is placed, a so-called picker goes around the store to collect the items and pack them in a large backpack, a task that takes about two and a half minutes.
A courier then bounds on an electric bicycle and delivers purchases to homes and offices. The delivery radius is about 1.5 to 2km for each dark store.
When a reporter used the service on Tuesday, the app display switched from “packing” to “delivery” in about two minutes, and the product arrived 13 minutes after the order was placed.
“Customers can buy eggs, milk and other groceries when they need them, eliminating the need to plan ahead and buy in bulk,” said Slava Bocharov, CEO and co-founder of Buyk.
Unlike with supermarkets, no registers, cashiers or frequent restocking of shelves is needed to maintain the look of the store.
“Instead, by just hiring a delivery person, we can offer our products at the same price level as nearby supermarkets,” said Yana Pesotskaya, head of US retail operations.
“RoboCop” may belong in the world of science fiction, but Robomart — a company in Santa Monica, California — does not. And it aims for delivery within 10 minutes in its service area of West Hollywood.
Ronaldo Salas, a local man, taps an app on a smartphone, and a minivan converted into a store on wheels appears at his home in just two minutes.
Tap the app again and the door opens automatically, letting the customer simply pick the products he wants. The items are tagged for identification by sensors in the van. The man is charged on his credit card, registered in advance. A flat commission of US$2 is charged, but there is no minimum order.
“It’s convenient to shop during short breaks instead of going to the store,” Salas said.
This service eliminates the need to pack by delivering the entire store to the consumer. Arrival times average nine minutes and can reach less than two minutes. CEO Ali Ahmed, who co-founded Robomart in 2017, likened the service to Uber and Lyft, describing it as “store hailing”.
“Store hailing is a new channel for consumers to shop that drastically improves the experience and the speed. Instead of going to the store or relying on delivery, they’re able to hail a store and shop right at home.”
A “snack car” carrying treats, beverages and other food began operating in June. This follows a pharmacy on wheels that started a trial run in December 2020, offering products such as over-the-counter drugs and detergent.
Robomart plans to have six types of mobile stores including a fresh food mart, a cafe, an ice cream shop and a fast food joint.
Robomart currently requires a driver. “It’s a fully automated experience for the customer. They don’t need to talk or touch. In the future, we will introduce driverless vehicles,” Ahmed said.
Robomart plans to sell the system to other retailers next year. “It can help retailers increase deliveries by up to 500%,” Ahmed said.
During the pandemic, home delivery of fresh food became popular. Retail giants such as Walmart and Amazon as well as Instacart, the largest food delivery company, launched same-day service. Competition is fierce to meet the demand for speed and to retain consumers.
But delivery took at least one or two hours from the time of order. Though the big players still have the advantage in scale — from their number of employees and hubs to the size of the regions they cover — the entry of startups with services that take less than 15 minutes has the potential to transform the industry.
In the future, a refrigerator in the home won’t even be necessary, or so claims the aptly named ultrafast service Fridge No More. Germany-based Gorillas swings by homes in New York City to deliver bananas and other items within 10 minutes, while GoPuff huffs over with groceries within 30 minutes.
“I want to be able to use different services at my convenience,” said Mia Parker, a woman who lives in New York City.
The US groceries market, also called the “food at home” market, is expected to be worth about US$1 trillion in 2021, research companies say. Venture capital is also flowing into the market, as e-commerce has plenty of room to make inroads into a field dominated by supermarkets.
The realm is even giving birth to unicorns, unlisted companies valued at more than US$1 billion. As the economy normalises, companies that benefited from nesting consumers during the pandemic will be winnowed out as competition for the pie heats up.