DoorDash thinks speedy grocery delivery is the future

CNN

By Danielle Wiener-Bronner, CNN Business

DoorDash is jumping on the speedy delivery trend.

Starting Monday, the company is offering 10- to 15-minute delivery in New York City from a new Dashmart, which stocks groceries, household goods and packaged restaurant products. Customers within the delivery zone will see the new option under a “convenience” tab in the app or on the DoorDash website.

With the launch, DoorDash is following a model that has been embraced by a number of startups trying to upend delivery in urban areas. Companies like GoPuff, Gorillas and Fridge No More have been setting up and stocking warehouses in major cities around the world, with promises of super-fast delivery.

DoorDash is offering rapid delivery in just one location to start, but it’s hoping to scale up in other areas. As it considers settings that are more spread out than New York City, the company will rethink what it can offer, said DoorDash president Christopher Payne.

“In New York, the density is such [that] you can have a really tight radius around … the store and deliver in 10 to 15 minutes,” he said. “You’re not going to have that type of density if you go into the suburbs, but you could deliver rapidly,” he said. “Instead of 10 to 15 [minutes], it might be 20 to 30,” he said.

The pandemic has accelerated online grocery shopping, with more customers warming up to the idea of having that type of food delivered. And with the new option, DoorDash is banking on what it sees as a long-term trend toward speed and convenience.

“There’s a massive long arc of consumer expectations rising,” said Payne. “Bringing goods and services to consumers in minutes, not hours or days … is going to be a trend that will last for many, many years to come.”

To stand up the new service, DoorDash is hiring about 60 people, said Payne. Employees who work on rapid delivery will have set schedules. In addition to delivering, they’ll conduct other tasks like packing grocery orders, customer service and more.

Competition and pushback

Speedy delivery in New York City is a competitive market. To set itself apart from the herd, DoorDash is hoping to attract customers that already use it for other services. Customers who use Dashpass, a monthly subscription that entitles members to free delivery other perks, will also get free delivery for the new service.

In addition to competitors, DoorDash may also have to contend with unhappy local businesses. New York City bodega owners have decried the new startups, saying that they can’t compete with VC-backed services and prompting Manhattan Borough President Gale Brewer to call for an investigation into the new delivery warehouses.

“As we work out the the capabilities required to do 10 to 15 minute delivery at scale, we will open that up as a platform and offer that to bodegas, corner shops and other stores where it fits their needs,” Payne said, adding that it works with local shops on some of its platforms already, and that it is creating a small business advisory council in New York City.

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