Operations

Delivery platforms look beyond restaurants to local logistics

Platforms are building marketplaces, adding goods and standing up subscriptions.

Delivery platforms look beyond restaurants to local logistics

(Illustration by the Current)

Ecommerce stretches across three distinct surfaces: There are those that attract customers, those that facilitate browsing and buying and those that get items to customers.

In the latter, delivery is the crucial, final piece that gets the package to a person’s door. It’s also a part of the process that is less likely to be handled by a brand or retailer themselves. After all, carrier services such as USPS, FedEx or UPS is built to handle and deliver packages. There’s also Fulfillment by Amazon, which offers links to storage, and delivery through its own vast logistics network. Or, one can contract with a third-party logistics firms to move items.

The headlines this year show how another option is emerging, and this week is no exception. Firms that started by standing up services to deliver meals from local restaurants are also recognizing something fundamental about their businesses: They have large groups of delivery drivers, software that helps to route them and defined processes for moving goods. Plus, their drivers are often third-party contractors, just like Amazon’s.

In other words, DoorDash, Uber Eats and GrubHub are sitting on logistics businesses that could deliver many kinds of items, even if people are only used to seeking them out for a quick bite from the Thai restaurant down the street.

Especially after a pandemic ecommerce boom that grew demand for delivery, these businesses have recognized their opportunity here. They’ve added to their assortment of items beyond food to the assortment of offerings on their apps, started behaving more like retail platforms that become a place to buy goods, and made moves to improve the shopper experience through new features and loyalty.

Partnerships are a big path through which they are unlocking this. A series of tie-ups this week shows how these delivery companies are looking to grow what they offer:

Facebook Marketplace x DoorDash

Facebook Marketplace started as a Craigslist-like peer-to-peer marketplace, where buyers and sellers had to make their own arrangements to exchange items. Through a developing new partnership with DoorDash, Meta is seeking to add a delivery service for smaller items to the equation.

According to the Wall Street Journal, DoorDash is testing a service in several US cities that will deliver Facebook Marketplace items that fit into the trunk of a car up to 15 miles away within 48 hours. Techcrunch adds that the service is under DoorDash's B2B service, called DoorDash Drive, which delivers for other merchants. With the move, Facebook is seeking to ramp up offerings for Marketplace as it seeks to attract younger users to the platform. Facebook Marketplace does have a partnership with on-demand service Dolly, but that is only for larger items and is available in just 45 cities.

While it is pursuing work with Meta, DoorDash is reportedly exiting another partnership. According to Business Insider, DoorDash is planning to end a partnership with Walmart that delivered groceries and other items to customers after four years. A source told the outlet that the partnership was “no longer mutually beneficial.”

This may be more about Walmart entering the delivery space in a bigger way than DoorDash’s particular interests. Walmart has been building out its own network for delivery, called Spark, which also includes a white-label delivery service that businesses can tap. Also on Friday, Walmart acquired Delivery Drivers Inc., which is the company that built the platform that runs Spark’s gig worker network.

Uber Eats x Office Depot

Add school supplies to the Uber Don’t Eats list. This week, Uber Eats inked a partnership with Office Depot that will see the service deliver supplies from 900 Office Depot and OfficeMax locations across the country.

This comes during the back-to-school season, which offers the opportunity to build in savings. Members of Uber's subscription service benefit from a $0 delivery fee and 5% discount on all Office Depot orders with a $15 minimum purchase.

This partnership shows how meal delivery platforms are looking to deliver for retailers, as well as restaurants. Even as Uber Eats is planting a flag around local commerce, GrubHub and DoorDash are both adding more and more goods beyond food, as well. It also signifies how the meal delivery platforms are all starting to look more and more like each other even as they expand. DoorDash, for instance, already has a partnership with Office Depot to deliver office supplies. As offerings offer similar items, the difference will come down to the experience shoppers have with the service.

Grubhub x Bank of America

Along with offering delivery, these services are also adopting similar strategies to ecommerce platforms as they seek to build loyalty. This includes the introduction of subscription programs that offer perks, taking a page from the Amazon Prime playbook.

Partnerships bring opportunities to find new avenues for growth of these programs, thereby increasing orders on the platform from repeat customers. That’s on view in a new link between Bank of America and Grubhub. It is providing Bank of America cardholders with free membership to Grubhub+ for a year. Grubhub+ offers unlimited $0 delivery fees.

“This is truly a win-win, with Bank of America now rewarding cardholders with deals and perks from restaurants they will love, and Grubhub tapping into Bank of America’s loyal and vast customer base to drive even more orders to restaurant owners and drivers,” said Launika Raykar, vice president of loyalty at Grubhub, in a statement.

The perk helps Bank of America offer a digital benefit for its members, while Grubhub has an opportunity to introduce more users to the service. It follows a similar deal that Grubhub inked with Amazon to offer the Grubhub+ service to Prime members for a year.

Separately this week, Uber said it will later this year end its free Uber Rewards program, which allows users to accrue points. Instead, it is emphasizing Uber One, a subscription program that brings together benefits for rides and delivery. It offers $0 delivery fees, 5% off rides and 10% off delivery orders.

The partnerships show the beginnings of flywheels beginning to form at these companies. Growing the items offered makes membership more attractive, while perks increase the value of membership and in turn lead to more sales from an ever-growing selection of options.

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