On-demand delivery services, such as Uber and its competitors Lyft and Postmates, are increasingly taking steps that have the potential to offer a counterpunch to online retailers such as Amazon and may shake up the brick and mortar retail industry in a big way.
UberRush: On-Demand Delivery Service Could Compete with Amazon
Uber is rolling out a platform, UberRush, to connect retailers with their customers, aiming to provide the sort of seamless, on-demand service to deliver goods that it currently uses to deliver passengers. Once a retailer signs up for the new UberRush service its customers can make purchases remotely via an app or website and rely on Uber’s network of on-demand drivers to make same-day or scheduled deliveries of those purchases. For brick-and-mortar retailers UberRush is a possible response to Amazon’s rapid delivery services. With Amazon’s next-day – and in some markets same-day – delivery option drastically reducing customers’ waiting time for online purchases and increasing convenience, there is growing evidence that the online retail behemoth is beginning to have a meaningful effect on brick and mortar retailers.
Amazon sweetened its rapid delivery service by waiving shipping fees for a one-time $99 subscription. Brick-and-mortar retailers could do something similar by offering reduced delivery costs for customers with subscriptions. For its part, Uber has shown some willingness to discount prices for certain types of trips where it can expect volume usage and seems to be in the market for partners.
On-Demand Food Delivery Is Already a Mature Market
On-demand delivery for certain types of brick-and-mortar outlets is not a new concept: customers have been ordering food for delivery as long as pizzerias have existed. In many urban areas there is an already-crowded market of food ordering or delivery services that serve multiple food vendors, such as Grubhub, Doordash, Seamless, Foodler, Postmates, and, yes, even Uber. Likewise, on-demand grocery delivery services such as Instacart (which, like Uber, relies on individuals using personal vehicles) and Peapod (which uses dedicated delivery drivers) allow customers to shop from home for same-day and scheduled grocery delivery. Even grocery leader Wal-Mart is dipping its toe in on-demand grocery services.
The experiences of restaurants and grocers and the growing market-share of Amazon suggests a shift in customers’ expectations about their retail experience. Customers want the option to be able to skip the shopping trip and have goods and food delivered to them at home or at work. UberRush and similar services offer brick and mortar retailers a low-capital solution to provide same-day delivery services customers are seeking.