Speedy Grocery Delivery Remains A “Highly Specific Niche”, Report Says

Speedy Grocery Delivery Remains A “Highly Specific Niche”, Report Says

Speed may not be front of mind for people when they log onto a grocery delivery app.

According to a new report, less than 2% of US adults are willing to pay a premium fee for rapid grocery delivery.

Over the last two years, a glut of rapid grocery delivery start-ups, promising deliveries in 15 minutes, has emerged and commanded a wave of VC cash.

However economic conditions in recent weeks have seen many companies scale back their ambitions with job cuts and market exits in a bid for profitability.

This new report was conducted by Stor.ai, an artificial intelligence start-up that serves the logistics and delivery sectors.

It said that the rapid delivery times offered by many of these companies are a “highly specific niche” and there is still no mass demand for such quick turnaround times for groceries.

The survey quizzed 1,000 shoppers in the US and found less than 2% said they were “very likely” to the pay the premium delivery fee to have their groceries delivered in 15 minutes.

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A majority, 57.5%, said explicitly that they would not pay a premium fee.

Respondents added across various questions that need rather than speed and user experience were of more interest to them.

Almost 27% said they would use these platforms more often if the user experience was improved while 22% said the “greatest inconvenience” was items being out of stock. The report goes on to say that these companies should invest more in resources for identifying replacement goods in real-time to bridge this gap for the customer.

Mendel Gniwisch, chief executive of Stor.ai, said that grocery shopping is undergoing an “era-defining transition”.

“During the pandemic, the widespread lockdowns and health concerns prompted many consumers to switch to online shopping,” he said.

“In an age of instant gratification, there is a common misconception that shoppers crave speedy deliveries; instead, this report has demonstrated that customers prioritize fulfillment.”

Respondents to the survey also flagged that they use online shopping in general quite regularly so there is a demand for grocery retailers to meet the same standards set by other e-commerce players.

“Grocery retailers today need to focus on the convenience and simplicity that characterize online shopping at its best and fuse these characteristics with the experiential peaks of in-store shopping, especially at local establishments,” Gniwisch added. “Simultaneously, retailers need to find ways to implement this hybrid offering to boost their bottom lines and secure a profitable future for their business.”

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