Does Ultra-Fast Delivery Have a Future in the German Online Grocery Market?
The growing demand for grocery delivery
Grocery delivery services such as Amazon Fresh have been around in the EU for a while. They offer consumers multiple advantages, eliminating the need for weekly supermarket shops and providing a safer and more convenient way to purchase groceries during the COVID-19 pandemic. Demand for grocery delivery is high, as evidenced in a press release from the German E-Commerce and Distance-Selling Trade Association (bevh), which quotes a 67% YoY growth in online grocery orders in 2020.
Spurred on by the pandemic, another trend has developed in major German cities: ultra-fast grocery delivery. While it has made some inroads in other European countries, the market segment is most advanced in Germany, where traditional online grocery is not as established. According to a poll conducted by the German newspaper Tagesspiegel, 46.9% of German city dwellers are familiar with the delivery service Gorillas, 19% have heard of Flink and another 4% of Getir. Ultra-fast grocery delivery wants to do for the German delivery sector what Uber has done for taxis: enabling consumers to order groceries on-demand in just one click.
The ultra-fast model
Unlike traditional grocery delivery services or online supermarkets, ultra-fast delivery services are not out to replace bulk shopping. Their business model is to deliver small quantities of a limited number of food items and everyday products in the shortest possible time. Grocery delivery services target impulse purchases, catering to consumers who find themselves out of pasta or feel like ordering in some snacks when their friends come over. The central idea is that city dwellers shouldn't have to plan their groceries in advance or check their calendars to work out when they will be home on a certain day to receive an order.
The downside of ultra-fast delivery is that it only really works in densely populated areas. In order to reach customers quickly, couriers on bikes pick up orders from a network of small warehouses spread across various strategic inner-city locations. This limits the potential customer base and leaves more rural consumers with no choice but to turn to the larger online competitors.
For city dwellers, the service is very tempting. With a limited selection of products, an efficient warehouse structure and a strategic selection of locations, consumers can receive ultra-fast deliveries within 10-15 minutes. These are delivery times with which traditional supermarkets simply can’t compete. According to a test conducted by Inside Digital, the average online supermarket delivery takes four business days.
What sets the best ultra-fast delivery apps apart?
Ultra-fast delivery has the potential to transform grocery shopping. If it is to become the future of e-commerce, however, the sector needs to focus efforts on strengthening its USP: speed.
According to a McKinsey report, quick product selection and payment are the most important features consumers want from a grocery delivery service. Only with a seamless customer experience can ultra-fast delivery differentiate itself from competitors and win customer loyalty. The following features are standard requirements for ultra-fast delivery apps:
Customers can sign up via various registration options like Facebook, Google, Apple ID or phone number.
The postcode is requested at the beginning of the registration process to avoid customers adding products to their basket only to be told later that some are not available in their location.
A granular search function with relevant, on-trend filter categories ensures customers can find the products they need quickly.
Customers can successfully add items to their basket and delete again if they change their mind or make a mistake.
The app offers multiple languages and translates both the UI and the product descriptions.
Chatbots enable customers to get immediate help with an order if a problem or query arises.
Customers can easily access and reorder past purchases as well as receive recommendations based on their purchasing history or items in their basket.
Live tracking enables customers to monitor their order's progress.
Another important aspect that will determine the success of ultra-fast delivery apps is whether they are able to guarantee data security. According to a report of May this year from the German news outlet rbb, researchers from the IT Collective Zerforschung were able to access data from one million orders in 19 cities via the Gorillas app. Names, email addresses, postal addresses and telephone numbers, along with the products ordered, were all traceable. According to a separate article from rbb, the ultra-fast delivery competitor Flink temporarily also exposed the names, addresses and credit card details of thousands of users. Data security is crucial for German consumers, with a survey by Statista suggesting that 65% are either concerned or slightly concerned about the security of their personal online data. Safeguarding this data is crucial if ultra-fast delivery is to capture a greater share of the online grocery market.
A splintering market
After all, competition is fierce. Other online delivery concepts are beginning to emerge that want to carve out a share of the market. In spring 2021, the Czech online grocery company Rholik started trading in Germany with their brand Knuspr. While their delivery time stands at three hours, they offer a much wider selection than Gorillas and Flink, including imported goods — such as from the popular UK supermarket Marks & Spencer — in their assortment. The Dutch startup Crisp takes a different approach again, delivering fresh food from local farmers and bakers with a delivery time of 24 hours.
Is the future bright for ultra-fast delivery?
The ultra-fast delivery sector is expanding at pace in urban areas. Gorillas already operates more than 170 locations and has its sights set on growing to more than 500 locations by the end of the year, according to an article in the Capital newspaper. Will ultra-fast delivery succeed in convincing customers to permanently alter their shopping behaviour, if only for a portion of their shopping needs? If so, this could provide traditional supermarkets with the impetus to make online delivery a priority.
Applause knows that customers are won and lost on the quality of digital experiences. Users turn to ultra-fast delivery because they want exactly that: ultra-fast delivery. If the sector is to have the greatest possible impact, ultra-fast delivery apps need to provide a seamless customer experience that lets them order quickly and efficiently. Visit applause.com to find out how Applause can help make sure that your apps work exceptionally first time.