The COVID-19 pandemic has led to a surge in demand for online grocery shopping and the emergence of faster delivery options, including startup Send, which has secured $ 3 million for its service that promises to have products on its shelf. door in 15 minutes.
But while the product market adjustment is clear during lockdowns, what happens after the pandemic? Is this a trend that is here to stay?
Today, Sydney-based Send has launched its supermarket exclusively online, allowing inner-city consumers to order a variety of groceries and essentials with super-fast delivery.
It has also announced its $ 3.1 million raise, including backing from German VC Cherry Ventures and New York investor FJ Lab.
Having launched just in February, founder Rob Adams has already signed leases for four local fulfillment centers, in Sydney and Melbourne, and has plans to open 30 by the end of the year.
Adams is also working on the details of the next round of funding. He is anticipating raising about $ 15 million at a pre-money valuation of $ 50 million.
“Send is redefining the way an entire generation buys groceries and daily essentials,” Adams said in a statement.
He points to the huge successes of express delivery grocery services in Europe and the US, a success that he hopes to replicate on a national scale in Australia.
“Australian supermarket giants promote the idea of a large weekly store, yet consumers don’t have time to curate long grocery lists and spend hours shopping.”
The launch follows news earlier this week that Australian supermarket giant Woolworths has partnered with food delivery giant Uber Eats to offer on-time grocery deliveries.
The partnership will be initially rolled out in select areas of Sydney and Melbourne starting August 30, and is expected to expand across the entire East Coast in the coming weeks.
In a statement, Woolworths Metro CEO Justin Nolan said the Uber Eats service is intended to provide customers with “a fast, reliable and effortless way to get groceries.”
It’s designed for ‘refill’ or ‘last minute’ stores, he added, and will help support customers “looking to limit their community outings during the pandemic.”
Lucas Groeneveld, regional general manager of retail for Uber Eats in Australia, added that demand for home delivery has been growing during the COVID-19 pandemic.
“This demand will only continue as customers increasingly seek faster delivery as the new normal,” he said.
What happens next?
While the case for online delivery is clear amid the pandemic, there are still questions about whether these services will be as popular when it is easier and likely cheaper for shoppers to get out on their own.
Do people still want bits and bobs delivered within the hour or even 15 minutes when they could just go to Woolies on their way home from the office?
Speaking to SmartCompany, Lousie Grimmer, Senior Lecturer in Marketing at the University of Tasmania’s College of Business and Economics, says it’s going to be interesting to see how large supermarkets incorporate the likes of Uber Eats into their offering.
She also notes that fast delivery, particularly Send’s 15-minute offering, will be challenging outside of densely populated areas.
However, the emergence of these types of services plays into a broader and long-term change in e-commerce in Australia.
It’s a trend that may not have been entirely caused by COVID-19, but has certainly been rushed forward.
In the grocery sector, Grimmer believes we are seeing long-term change, rather than behaviors that will rebound when blockages ease.
For many shoppers, it was concerns around the risks of online shopping that kept them shopping in store, or a lack of tech savvy. The pandemic forced them to overcome those barriers, because there was no other option.
“Now that many of those concerns are not in the equation, consumers are much more comfortable with shopping online or using a hybrid approach to their grocery shopping,” she explains.
Grimmer notes that acceptance of online grocery shopping in Australia was “very modest” before the pandemic hit.
“We certainly didn’t see the same appetite from consumers for buying grocery items online that existed in the UK and the US, for example.”
In part, she attributes it to the fact that the stores themselves tarthey gave in investing in the technology and logistics needed to make it work, as well as a lack of consumer demand.
Of course, 2020 changed all that.
“Buying essentials online became the only way for many Australians to access essentials,” she says.
That led to a huge spike in demand for grocery delivery, leaving supermarkets with no choice but to improve their game.
As for what happens next, Grimmer predicts that we will see a mix of behaviors after the pandemic.
Some consumers will be “desperate to go back to physical stores,” she says.
These are the people who enjoy the physical shopping experience: touching products, discovering new brands, and experiencing the social benefits.
Others will have discovered the convenience of online grocery shopping, and will find that home delivery is a perfect solution for them.
“I suspect that for many Australian consumers a mix of online and physical grocery shopping will be the norm after the pandemic,” she says.
“We are likely to see an online grocery shopping thirst for everyday staples that are easy to ‘set and forget’ using online systems, but for quick travel, refills or special needs, going to brick-and-mortar stores will do the trick.”
