Retail Channels
22 July 2022
Uber is doubling down on grocery delivery
Updates coming to Uber Eats this summer include after-hours ordering, tracking merchant features.

Uber Eats items. (Courtesy image)
Updates coming to Uber Eats this summer include after-hours ordering, tracking merchant features.
Uber Eats items. (Courtesy image)
Uber is upgrading its grocery delivery service.
While the company rose with ridesharing, its delivery business picked up in the pandemic as people were more likely to be home and advised against getting into cars with others. The company’s Uber Eats service initially launched grocery delivery two years ago as an addition to its then-restaurant-focused delivery offering. In 2021, it acquired Chile-based grocery delivery service Cornershop, and added 24,000 grocery stores around the world. Growth has only continued, including the notable US addition of 2,000 Albertsons stores over the last two years.
With a raft of new features announced on Thursday, Uber said it is rolling out a fuller version of the integration with Cornershop’s technology and team to users and merchants this summer. Taken together, the updates are the largest improvement to Uber's service yet, all designed to make grocery delivery “more convenient, intuitive, and reliable.”
For users, Uber is making a number of updates based on consumer feedback. They include:
For merchants, updates coming to the app this summer include:
Uber’s continued expansion of grocery delivery shows it sees continued growth for the service, even as more in-store shopping and ridesharing is returning.
Speaking in April at the ShopTalk conference, Uber CEO Dara Khosrowshahi said that expansion in grocery delivery was part of the company’s push to be a leader in “local commerce,” which involves the delivery of items from nearby merchants to customers. Khosrowshahi added that Uber believes that “rapid delivery should be a part of every local grocery player's offerings," and that Uber could introduce for them in a "capital-light" way. While Uber Eats started with meals from restaurants, it is expanding with delivery of items from grocery and convenience stores, including non-food items – the so-called Don’t Eats model promoted by its celebrity-strewn Super Bowl commercial.
Each of these areas has its own set of players vying to quickly shuttle orders to doorsteps alongside Uber. Grocery delivery has Walmart, which makes it a part of its subscription service, and Instacart, which announced intentions to go public, has been slashing its valuation and making its own product updates. DoorDash and Grubhub are also expanding from meals into non-food items. Quick commerce companies like Gopuff are delivering convenience items in tight timeframes. Plus, Amazon looms over each segment, not only in grocery delivery via Whole Foods but also the ability to deliver items quickly via its fulfillment network.
Still, there's plenty of potential upside in grocery. It is an area that is expected to grow, with executives in the grocery sector recently telling McKinsey that they expected ecommerce penetration to more than double in the next 3-5 years. Uber is positioning itself as part of this rise, and it has quickly built up a notable presence in the area, given the range of stores it is partnering with in the US and international markets. Offering delivery from multiple locations creates a kind of marketplace, and additional opportunities can also grow out of this model to further strengthen the business. Retail media could offer brands and retailers the opportunity to advertise inside Uber’s delivery experience. And Khosrowshahi hinted that the company will seek to provide logistics technology to local businesses.
The product provides a foundation for all of that, and this summer’s upgrades to Uber Eats signal that the company wants to continue to make the service better.
Retail media networks must drive sales incrementality, a new report from the Association of National Advertisers states.
Retail media networks are creating a new layer to the relationship between brands and retailers, and a new report indicates that brands in particular are still navigating the growing pains.
The last two years brought fast growth of retail media networks, as retailers recognized the value of providing advertising opportunities through ecommerce marketplaces that grew rapidly during the pandemic, and the value of the first-party data they possessed in a world where third-party cookies and IDFA are becoming less valuable tools. For a historically low-margin business like retail, digital advertising also presents an opportunity for a high-margin business line of 50-70%.
Brands have proven to be eager adopters as they sought new ways to reach customers in this environment, as well. According to eMarketer, ad revenue from retail media networks will reach $52 billion in 2023 and $61 billion in 2024. Over the next two years, retail media will account for one in five digital ad dollars spent by marketers. The spend is only expected to grow. According to a survey from the Association of National Advertisers (ANA), 73% of brands said they expect to be spending somewhat or significantly more on retail media in the future than they do today.
However, this proliferation has also created “more marketing decisionmaking complexity for advertisers,” ANA CEO Bob Liodice said in a new report.
The need to navigate multiple networks and still-developing tools to maximize the opportunity presented by retail media is leading to a multitude of approaches. Layer on top of that the fact that brands are both selling goods and advertising through retailers, and it’s clear the landscape is being reshaped.
A recent report from the Association of National Advertisers uncovered the areas where fault lines may emerge under the surface:
The results underscore key areas where relationships between brands and retailers can be strengthened.
Sales vs. growth. Retail media must be able to drive both conversions of a single sale in the lower funnel, and brand equity growth in the mid- to upper-funnel.
As one respondent put it, "The jury is still out on if the RMNs are truly driving sales incrementality."
This also has implications for how a brand is budgeting retail media. Some brands are shifting dollars from shopper marketing, brand marketing, and trade spending, which could put the emphasis on short-term sales. But as another respondent put it, "There is concern that while attribution shows RMNs are driving brand sales, they are not necessarily driving brand growth. This is especially concerning where incremental RMN spending is being sourced from brand building budgets."
Standard measurement. Brands want to see an improvement in transparency in measurement. They also want results to be measured in the same ways across platforms. Further, brands believe retail media networks are not fully optimized for their KPIs.
This all leaves room for retailers to show they truly understand what brands are seeking from retail media, and show how they are delivering, all while reducing complexity.
As the report put it, “The next phase of growth for RMNs and value creation for brands will be through RMNs assuming shared responsibility with advertisers for driving brand growth, and demonstrating the ability of their platforms to drive incrementality and positive ROAS for brands. In other words, the next stage of growth will be driven by results versus relationships.”