Unravelling the grocery delivery brand boom
There’s been a rapid rise in on-demand grocery delivery apps, complete with similarly snappy names and attention-grabbing branding. But can they compete with traditional supermarkets amid the cost of living crisis?
Convenience culture has transformed almost every aspect of consumers’ daily lives over the course of the last decade. For many of us, it’s hard to remember a time before we relied on Uber to get us from A to B; binged a new TV series on any number of available streaming platforms; or had dinner delivered to our door, courtesy of Deliveroo. If the spate of ‘on-demand’ grocery delivery apps that have been popping up over the last couple of years are anything to go by, could our weekly food shop be about to go through a similar revolution?
“In short, yes,” Leo Burnett’s head of strategy, Tom Sussman, tells CR. “As our time has become increasingly valuable, so too has convenience. Advances in logistics and the embracing of zero-hours contracts then just provided the final pieces of the puzzle.” Capitalising on the huge increase in demand for online grocery deliveries during the pandemic, and the struggle for traditional supermarkets to meet the demand, an increasing number of delivery companies operating ‘dark stores’ in cities across the UK sprang up to fill the void.
The premise of most of these apps is simple enough: all your essential groceries, and perhaps a couple of extra treats, are delivered right to your door in less than the time it would take for you to go to your local convenience store or supermarket. Venture capitalists in particular seem to be lapping up the idea, with investors pouring billions of pounds into on-demand grocery delivery firms. The latest figures from the Institute of Grocery Distribution value ‘quick commerce’ at £1.4 billion in the UK alone, and it is predicted that the market will more than double in size to £3.3 billion in the coming years.
While online grocery shopping was once the preserve of middle-class families, Sussman suggests the thinking behind this new breed of delivery apps is much broader in scope. “It feels sensible to assume these brands are simply targeting anyone that has geographic and financial access to their services: so the less price sensitive, time poor, urbanite middle-classes,” he says. “That said, the communications we have seen from some of the leading brands – Getir, for example – have also been impressively populist in scope. This will, no doubt, serve them well as they now look to expand.”
Convenience is always a driver for some consumers but I think that convenience is now coming with a lot of guilt
Beyond the names of the companies, which “make them sound like Snow White’s other dwarves: Weezy, Jiffy, Dija, Zapp, Fancy, Getir and Gorillas,” according to the Guardian, most of the apps’ visual aesthetics also tend to blur into variations of the same bold, bright, user-friendly branding. “I would say the majority of them probably are trying to get across the speed element of it,” says Natalie Redford, senior creative strategist at Robot Food.
“It’s like with D2C brands, a lot of the time they follow a recipe. You get a CBD brand that looks like a dog food brand, that looks like a skincare brand, that looks like an underwear brand. Maybe they’re trying to build a familiarity because this kind of thing is a bit unknown, being able to get groceries at the drop of a hat.”
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As is inevitably the case when a new market becomes increasingly crowded, a wave of consolidation is already taking place in the on-demand grocery space. In the UK, Getir, which was originally founded in Turkey in 2015, acquired millennial-friendly London startup Weezy last year; US firm Gopuff has snapped up both Dija and Fancy; and Berlin-born Gorillas has expanded to nine countries and more than 60 cities in just over a year.
Established supermarkets are also trying to stake their claim on the market, with no one seemingly wanting to be left behind. Sainsbury’s Chop Chop and Tesco’s Whoosh services are currently both rolling out across the UK, with the promise to deliver groceries in under 60 minutes. And most supermarkets, including Co-op and Morrisons, have signed up with Deliveroo, paying an undisclosed cut of every order to the delivery company. “In the long-term, if feels possible that traditional supermarkets and food delivery businesses may either replicate or acquire more of these offerings,” Sussman predicts.
When it comes to setting themselves apart from the rest of the pack, Sussman thinks scale is going to be the vital element for both new and established players in the grocery delivery space. “Like in many of the emerging D2C categories, where various ostensibly similar startups have vied for dominance, the brands that are quickest to establish scale of distribution and scale of marketing spend will win out. And this is true regardless of category: whether that’s convenience grocery, fast food delivery, meal replacement shakes, posh water bottles or a bed-in-a-box,” he says.
But the higher prices and delivery fees that come with the territory of these apps, compared to more value-focused supermarkets, will also be harder to sell to consumers in the wake of the emerging cost of living crisis. Getir’s recurring line that it’s ‘democratising the right to laziness’, for instance, doesn’t resonate so well when some people are already having to choose between heating or eating. “Convenience is always a driver [for some consumers] but I think that convenience is now coming with a lot of guilt,” says Redford. “And I do think that when you get into a situation like that, people question what they need versus what they want.”
Continuing to attract customers will depend on how on-demand grocery brands tap into convenience culture. Gorillas, for instance, recently released four private label brands on its app, which it says is based on consumer insights from the 16 million plus orders it has delivered worldwide. Sweden-born Motatos, by contrast, is focused more on sustainability and affordability, offering discounted items that would otherwise be thrown away.
“With most of them, their lead message is ‘with you in 10 to 15 minutes’,” says Redford. “You know how they say competing on price is just a race to the bottom? [Time] is not really a platform to compete on, because if you’ve figured out how to do it quickly, somebody else is going to figure out how to do it quickly as well. So it’s what else you can do and how else you can be speaking to people, finding that hook where somebody can connect with you.”
