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Gorillas Aims To Bring eGrocery Into The Future With Lightning-Fast Delivery

There is a lot happening in online grocery right now. Instacart is making major moves in preparation for its public listing, restaurant delivery services are getting into grocery, and venture capitalists (VCs) are pouring billions into online grocery solutions around the world. With the huge growth in consumers adopting online grocery solutions matched by growth in the number of options available, eGrocers are challenged to find a way to stand out in the crowded space.

“In the years leading up to and during the pandemic, there was a ton of growth and investment in the space. Now, demand is greater than ever for giving customers access to their immediate needs,” Ashwin Wadekar, chief of staff at online grocery delivery eTailer Gorillas, told PYMNTS in an interview. “What began as an early adopter trend pre-pandemic and suddenly became a necessity as lockdowns hit has now turned into something that consumers see as customary when it comes to their grocery shopping experience.”

The grocery delivery service, which specializes in delivering groceries within 10 minutes, launched in the United States in late spring in select neighborhoods in Brooklyn, New York. This market joins the dozens of cities in which Gorillas operates across Germany, the Netherlands, France and the United Kingdom. The company uses “micro warehouses” in the neighborhoods it serves, and unlike many popular grocery delivery services that use self-employed gig workers, Gorillas employs full-time staff or part-time W2 workers paid hourly. VCs are taking interest — as of May, the company was looking to raise about $500 million at a $6 billion valuation.

Beyond The Gig Economy

The company manages its 10-minute deliveries by placing a micro warehouse in each neighborhood it serves, sometimes placing two if the neighborhood is larger. These warehouses are staffed by full-time employees.

“Of course we leverage smart algorithms,” said Wadekar, “but at the end of the day, it’s a much better experience to have an employee pick avocados for you and hand-deliver it.”

This may help build trust in high-deliberation categories such as produce and meat. Data from PYMNTS’ 2020 Omnichannel Grocery Report, created in collaboration with ACI Worldwide, found that 83 percent of consumers continue to opt for in-store shopping when it comes to fruits and vegetables, and 81 percent when it comes to fresh meats. Establishing faith in the people putting together shoppers’ orders could go a long way toward shifting this towards eCommerce.

Gorillas’ riders transport orders via eBike. According to Wadekar, the company’s CEO and co-founder, Kağan Sümer, was an “avid cyclist,” and Sümer attributes his “highly driven mentality” to this activity.

“He felt that employing riders full-time and providing benefits was the best way to motivate employees to also adopt this mentality,” said Wadekar, “and it’s really exciting that he’s been successful in doing so.”

Additionally, Gorillas believes that this creates a “team-oriented culture,” which in turn “unlocks value for both our customers and employees.” Given the preponderance of gig economy delivery services, one might question the economics of using salaried employees to fulfill orders. However, Wadekar said that the model has “no impact” on the company’s capacity.

Stocking The eShelves

One of the central issues for eGrocers is that of inventory. Even for brick-and-mortar grocers, profit margins are notoriously low. Given the added labor cost of delivery, it can be a tough model to make work. The U.S. Department of Agriculture (USDA) estimates that about 31 percent food loss is wasted at the retail and consumer levels — eGrocers cannot afford this loss, meaning that they need to get smart about how they stock the eShelves.

Gorillas considers two main factors here: freshness and demand. For produce, Wadekar said, the company takes a “fresh, farm-to-table approach.” The company also “prioritizes partnerships with diverse, local businesses.”

Additionally, the company keeps a close eye on what is in demand.

“We … have created a feedback loop with our customers,” said Wadekar, “listening to what they’re asking for and making adjustments to serve their needs, and paying close attention to what our customers are searching for and what food trends are.”

This data-monitoring mirrors the approach of eGrocer Farmstead, which uses its proprietary artificial intelligence (AI)-enabled software to optimize inventory based on a variety of first- and third-party data. As the company’s co-founder and CEO Pradeep Elankumaran told PYMNTS in an interview, “We’re essentially a prediction company that determines in very short periods of time what is going to happen so that we can control the costs of that outcome.”

Variety Is The Spice Of Life

Looking ahead, Wadekar believes that, as the space grows, the major players will grow more varied. As he put it, “It’ll be interesting to see what value propositions companies will offer beyond convenience.”

He expects that issues-oriented players will rise to the fore, focused on sustainability or human rights “in order to better resonate with their customer base.”

Additionally, he pointed to projections that by 2025, more than half of all grocery purchases will be made online, and existing online grocery customers will begin to purchase more frequently, given that consumers see brick-and-mortar grocery shopping as “time-consuming and inconvenient.”

Sure enough, PYMNTS’ study, The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce, created in collaboration with Carat by Fiserv, finds that 57 percent of United States shoppers now buy groceries online and that 27 percent of consumers are ordering groceries online for delivery more than they did before the pandemic.

“Consumers won’t want to relinquish the convenience and efficiency of online grocery delivery,” said Wadekar, “because the level of flexibility and empowerment opens a lot of doors for how they can more productively spend their time, which will lead to even more grocery-delivery demand.”

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