Tech Bytes: Three Developing Trends in Online Delivery
Online delivery is a retail technology niche undergoing active evolution. Consumers are expecting a wider range of goods available in a shorter period of time than ever before. Here are three ways providers are responding:
Eliminate the Middleman
Reducing the number of supply chain players standing between the product and the consumer is a time-honored business technique for increasing efficiency and reducing cost. In the online delivery arena, third-party delivery providers are starting to realize they can fulfill from manufacturers and wholesalers as well as from retailers.
This trend is still in its very early stages, but is most prevalent in delivery of online perishables purchases. Start-up Wholeshare bases its entire model on fulfilling consumer orders for natural and organic grocery items direct from the same wholesalers who supply specialty chains, at a significant savings to the consumer.
In addition, Amazon Fresh includes local farms and farmers markets among the produce providers it uses in some markets. Going direct to the source poses its own challenges, such as fewer supply outlets and a possible need to buy items in bulk, but inevitably should become more common as online delivery continues growing in popularity and service providers look for a competitive edge in an increasingly crowded market.
Buddy Up to the Middleman
At the other extreme from cutting the retailer out of the online delivery equation altogether is forging close ties with retail partners to take the arrangement beyond simply outsourcing the fulfillment of online orders.
The most publicized recent example of a third-party online delivery provider and retailer entering an advanced collaboration is the partnership between Instacart and Whole Foods Market. The two companies will launch in several new markets in the coming year. More significantly, they intend to create new e-commerce and delivery solutions, with the first pilots launching in 2016.
In addition, the strengthened partnership will increase the number of Whole Foods Market stores with embedded Instacart shoppers by up to 50% nationwide by the end of 2016.It is possible other Instacart retail partners may have competitive concerns about this agreement, although the delivery provider has announced deals with other retailers in the meantime.
This agreement is another piece of evidence showing that online delivery is becoming a more established omnichannel retail niche with growing profit potential. Inevitably, similar partnerships between online delivery providers and retailers will pop up the months ahead.
New Kids on the Block
Whether they want to delve deeper into retail partnerships or become the direct consumer point of access to products, a slew of organizations are offering online delivery services. In addition to dedicated service providers such as Deliv and Delivery.com, shared ride networks like Uber, social platforms such as Foursquare and online deal providers like Groupon are all online delivery participants.
Moving forward, it only makes sense that companies from even more industries will at least investigate the online delivery space. This could include (but is not limited to) moving companies, vehicle rental providers, and repair and home services specialists.
In this age of crowdsourcing, there is also the opportunity for independent contractors to offer smaller-scope online delivery services. However online delivery ultimately evolves, the market does not show any signs of shrinking in the near future.