There is a food fight being fought on our streets.
Mysterious dark stores are popping up all over our cities and shooting out delivery bikes in some strange late-capitalist version of ‘Supermarket Sweep’.
This is the meteoric rise of the new rapid grocery delivery market.
Just like the electric scooter wars that started a few years ago, new players are popping up overnight with seemingly bottomless budgets to try and secure market share in this new landscape.
And if you’re anything like me, you probably have several apps installed already and haven’t paid the full price for groceries in a long time thanks to all the vouchers getting thrown at you.
But when the offers inevitably stop flowing, only those offering the best customer experience will survive.
But before we get to that, let’s understand a bit more about the landscape they operate in.
The Ultrafast delivery ecosystem
What are ultrafast delivery services?
Ultrafast delivery apps are on the path to shift the demand curve, similar to how Amazon and Uber did with free shipping and for-hire cars respectively.
Normally, the process you follow to buy groceries looks something like this:
- Listing all the ingredients you need to prepare your meals for the week
- Scheduling a time to visit and bulk buy from the supermarket/grocery store
- Making the to and fro journey to pick up your groceries
- Managing your inventory so things don’t rot or go bad
But with ultrafast grocery delivery services, you simply download an app, decide what you want at any given moment, press a few buttons on your phone, and have these groceries at your doorstep within 10 minutes.
There’s no minimum spend and except for a flat delivery fee of about $2 you pay exactly what you would at a grocery store or supermarket.
The ultrafast delivery business model
Ultrafast delivery services cut the intermediary out of the distributor-warehouse-supermarket supply chain by receiving inventory and fulfilling orders out of the same place.
They operate out of mysterious dark stores which are located in densely populated urban areas. The interiors of these dark stores are lined with aisles of shelves containing groceries and other retail items. Quite similar to a conventional supermarket.
But they aren’t open to the public and are instead used as fulfillment centers. Fleets of delivery workers pick up and deliver orders in a small radius of about a few miles.
Dark stores are also significantly smaller and hold much less inventory compared to a traditional supermarket.
For example, an average supermarket has around 30,000 SKUs (stock-keeping units). But most dark stores generally have something between 1,000 to 2,000 SKUs.
The Ultrafast Delivery Service Ecosystem Rundown
Cut the intermediary out of the distributor-warehouse-supermarket supply chain by receiving inventory and fulfilling orders out of the same place
Operate out of dark stores which are located in densely populated urban areas with fleets of delivery workers picking up and delivering orders in a small radius of about a few miles
The interiors of dark stores resemble a traditional supermarket but aren’t open to the public and are instead used as mico-fulfillment centers
They are significantly smaller (~3000 sq.ft) and hold much less inventory (~1,000-3,000 SKUs) as compared to a conventional supermarket (~40,000 sq.ft & 30,000 SKUs)
The industry is still relatively young and there’s fierce competition between multiple players across geographies
The challenges of the ultrafast delivery space
Today, there are a whole host of ultrafast delivery services offering ‘Groceries in 10 minutes.’
Some of the notable players in the space include:
And this is far from an exhaustive list. So whichever part of the world you’re in, chances are it’s covered by one of the companies mentioned above or others with a similar value proposition.
But besides the fierce competition, these businesses are also operating in a capital-intensive industry with very low customer loyalty and switching costs.
And we wanted to understand how exactly they plan to overcome these challenges.
The short answer? Prioritizing the customer experience.
Gorillas: Creating relationships that go beyond deliveries
Gorillas is based out of Berlin and is one of the fastest European startups to have achieved unicorn status. Reaching a valuation of $1 billion in about nine months from their launch.
They have raised over $330 million across three funding rounds and operate more than 100 warehouses globally. This includes countries like the UK, Germany, Netherlands, France, and Spain amongst others. They’ve also recently begun operations in parts of New York City.
Their goal is to create relationships with customers that go beyond just ordering groceries.
Let’s take a closer look at how they’re going about trying to do that.
We sat down with their Head of Customer Experience US, Felisha Lynskey to find out how it’s going.
Accompanying deliveries with hand-written cards and freebies
As Gorillas continues to grow at rocket speed, they want to maintain the high-touch, personalized experiences they deliver.
For example, every order they send out is accompanied by a hand-written card. And many deliveries with freebies to complement the products the customers have purchased.
Every member of Gorillas is expected to write cards, thanking the customer for choosing them.
“Is this difficult to scale? Yes. Is it worth it for the customer experience? One thousand percent.”
Hiring a customer-centric team of riders
All riders at Gorillas are direct employees. They receive full benefits, can choose to work part or full time, and keep 100% of their tips.
They’ve invested in a system and culture where riders are empowered to carry on the customer experience as soon as they get to your door.
Which means they don’t just leave a bag at your door. But make time to chat with you and answer any questions that you may have.
“We don’t want to leave you with just delicious groceries – we want to leave you with a story to tell your friends at a party afterward.”
Additionally, to ensure that their riders are safe and happy they have a dedicated ‘Rider Support’ team to take care of all HR-related issues.
Creating Slack workflows to perfect every order
There are a lot of stakeholders involved in making a 10-minute grocery delivery. From riders, pickers, store managers, inventory specialists, and customer experience agents.
What’s more? They all need a way to communicate fast. Really, really fast.
And they’ve been doing this by building custom Slack Workflows being utilized by every internal team member.
“A lot of communication between multiple stakeholders is needed to perfect each order.”
And they also offer live chat support during their delivery hours to quickly resolve customer issues.
Following up regularly for feedback
After a customer receives their first delivery, they get a personal email from the team offering a phone call to get any potential feedback that can help make the product and experience better.
They find out what products the customers would like to see added to the inventory, make every single product request, and follow up with each customer once they have it in stock.
“One of our first customers really wanted half-and-half, so as soon as we got it in stock, we offered to make a special delivery in time for her morning coffee.”
Customer feedback and ideas are taken very seriously. And anything that the customers take the time to share is passed on to the leadership team.
“Most delivery apps focus on only speed. Gorillas focus on the experience.”
Gopuff: Using Customer Support as a Differentiator Factor
To carve their niche in this competitive landscape, Gopuff aims to ‘provide customer support so good that you have to tell your friends.’
Their Customer Support & Live Operations lead, Samuel Barrett, shared insight into how they’re going to do just that.
Conducting regular team meetings to incorporate customer feedback
In a fiercely competitive market, Gopuff is relying on customer support to provide added value to their communities’ experience.
And they’re doing everything possible to capture and digest the voice of their customer.
“We try our best to understand their issues, and action their feedback quickly by implementing processes that allow us to improve customer experience.”
They set up monthly product and customer support meetings to identify the products, services, and features they can add to the roadmap based on customer feedback.
Investing in a team that has extensive knowledge of the space
Gopuff has an in-house group of agents who work across Live Operations, Customer Operations, and Rider operations. The agents are managed by associates who in turn work with their Customer Support Lead to implement their processes and scale the team as their business grows.
What’s different about Gopuff is that they have invested in a frontline team that has extensive knowledge of the space. Almost all their employees come from within the industry. Which means they are extremely familiar with the different aspects and nuances of the delivery space.
And this allows their team to resolve issues quickly and to a high standard.
“Good customer service experiences are likely to improve customer retention, even if the initial experience is poor. Positive interactions are shared with friends & family and that’s why we’re pushing for amazing customer support here at Gopuff.”
They believe it’s extremely important to be friendly, personable, and transparent. And to do so while responding to each query within just minutes of receiving them.
Using Klaus to assess the quality of their interactions
The top reasons that led them to choose Klaus included:
- A clean and simple UX
- The ability to create highly customizable scorecards tailored to their needs
- An incredibly helpful and responsive support team
“Klaus allows us to be super granular with how we mark our conversations, from our tone of voice to empathy, and GDPR. We were able to create our own customized scorecards which meet our needs and allow us to deliver world-class customer support at scale.”
Providing regular feedback to their support agents
Customer support is one of Gopuff’s USPs that they believe will help them retain customers and differentiate themselves from competitors.
And they understand that their agents have a huge role to play in the effectiveness of this process.
“Our agents are crucial to the success of the business. They’re key to understanding what our customers want, and what our pain points are.”
To ensure that the agents perform to the best of their abilities, they perform regular conversation reviews.
“Klaus allows us to have robust performance conversations with our agents. It gives us the platform to praise our agents when they are doing exceptionally good work and to focus on those who might need a helping hand along the way.”
The future of the delivery ecosystem
As we speak, Gorillas, Gopuff, and the other players in the space are all engaged in a fierce battle. But in addition to each other, they’re also competing with supermarkets, grocery stores, and even restaurants.
How exactly the ‘delivery wars’ will play out and who the eventual winners will be are anybody’s guess.
But one thing is extremely clear. The customer experiences delivered will have a huge say in who comes out on top at the end.
Interesting times ahead for sure!
What do you think the future of the delivery space will look like? Come let us know in our CX-obsessed community Quality Tribe!