Target recently announced that it acquired a startup in the grocery delivery space called Shipt for $550MM. If you’re familiar with Instacart, you get the gist of Shipt. If not, think Uber for groceries — consumers place an order through Shipt and a marketplace of drivers shop for your items and deliver it to you on your schedule.
However, many of the challenges with same-day delivery are the same ones we’ve talked about for years. The truth remains, most consumers don’t use it: the vast majority of shoppers say they never use same-day or even expedited delivery. Why? Most shoppers don’t want to pay for it. Delivering same-day online grocery orders can cost up to $20 per transaction and over two-thirds of consumers say they would rather wait longer for a package in order to get free shipping.
Because of this, online grocery delivery is almost always in the red unless shoppers (or marketers, which is another unexplored discussion topic we’ll talk about in 2018) pay for it. These financial challenges are exactly why even Amazon pulled the plug on a number of its Fresh markets. The prevailing mantra for now is that people like “free over fast” with respect to all their eCommerce orders.
To read the rest of the story, please go to: Forbes
