COVID-19 may be on the precipice of unleashing an 800-pound gorilla on the grocery and convenience store industries, the likes of which have never been seen before.
Since the pandemic began, third-party grocery and convenience delivery has exploded.
According to CNBC, DoorDash is now valued at $16.0 billion. Uber UBER +0.3% just confirmed that it is on pace to deliver $1.0 billion in annual grocery volume. And, Instacart, a company valued at just $7.9 billion to start the year, has since formed partnerships with the likes of Walmart WMT +2%, 7-Eleven, Sephora, and others and seen its share of the online grocery delivery market rise to as high as 55% in some months and its valuation subsequently soar to roughly $18.0 billion.
And, it all makes sense.
Grocery, convenience stores, mass merchants — heck, darn near everybody — were unprepared for the immediate, same-day delivery demands of their customers amid the COVID-19 pandemic. As a result, many retailers looked to delivery services as short-term cures to their own illnesses, i.e. their ability to deliver goods quickly. Third-party deliveries were a way to stop the bleeding and to get products into the hands of consumers in a relatively asset-lite way.
However, what currently is the gauze pad for short-term financial gain, may soon be the knife that cuts an even deeper wound.
The flood of money getting funneled to companies like DoorDash, goPuff, Instacart, etc. is both prescient on the side of investors and dangerous on the side of retailers because it foreshadows a different future, one in which new operating models converge to make something better for both shoppers and for retail operators.
Enter the aforementioned 800-pound gorilla — aka the GoMart.Forbes