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12/22/2020

Delivery’s Missing Ingredients: Why Top Apps & Location Data Will Transform Online Ordering

Since the pandemic began, many consumers have turned to online ordering and delivery for the first time, accelerating the timeline for mainstream adoption. For grocers and CPG retailers, the results have been eye-opening. This year, more than half of consumers have bought groceries online and 62.5% plan to continue over the year, pushing these capabilities from a nice perk to an essential service — and forcing retailers to act fast.

From local grocery stores to chains like Costco, many retailers have partnered with delivery aggregators to empower online ordering and delivery. This summer, DoorDash announced partnerships with grocery and convenience stores across the country to offer on-demand delivery within the hour.

Meanwhile, Instacart saw a 218% increase in average daily downloads over a one-month period in late winter, indicating the necessity of these services.

But while delivery aggregators can offer quick solutions, they limit the control retailers have over app aesthetics, functions, accessibility, and location-based customization. During the pandemic, we’ve seen services struggle to keep up with demand for delivery slots while protecting their workers. Turning to external apps also means giving a middleman a cut of profits, which raises questions about the sustainability of these services.

With experts predicting online grocery ordering and delivery is here to stay, retailers should invest in apps that give them full ownership and control of these experiences. Chains like BJ’s Wholesale Club have seen success with owned apps. Using the BJ’s app, members can order fresh and frozen items, as well as, general merchandise products, grocery items and sundries on the BJ’s app for pickup in-club. Since the pandemic, BJ’s has seen a 350% year-over-year increase in digital sales, demonstrating the necessity of these experiences.

While building exemplary apps takes considerable time and resources, doing so comes with a wave of transformative benefits. From a financial standpoint, retailers who own apps will receive all revenue from purchases and preserve margins.

But benefits stretch far beyond the bottom line. Owned apps can empower retailers to build something differentiated, strengthening customer loyalty. They also enhance every touchpoint of the consumer journey, from more accurate delivery tracking for customers and deeper personalization to streamlined fleet management and logistical support. 

Owned apps can empower retailers to build something differentiated, strengthening customer loyalty.

Enhanced delivery and curbside pickup

With more control over app infrastructure, retailers can leverage location data technology to perfect delivery logistics, removing unnecessary friction and surfacing more accurate wait times. Customers awaiting delivery can monitor their order in-app using map-tracking technology with real-time ETAs.

For retailers utilizing contactless curbside pickup, location data can also let employees know when a customer is pulling up to the store. That way, the order can be delivered on time and straight to the shopper’s car, improving operational efficiency and customer satisfaction.

Fleet management

Waiting for a delivery to arrive swiftly and efficiently can be a source of anxiety for consumers. To alleviate these concerns, location-data functionalities can be used by retailers to manage their own delivery services, allowing them to better manage employees and streamline backend logistics. Instead of relying on delivery aggregators, retailers can make decisions driven by customer preference. 

By analyzing demand trends, operators can decide how many fleets to deploy at a certain time, determine the regions that can benefit from more drivers, and optimize route planning to create more seamless delivery schedules. 

Deeper customization and stronger brand identity

When a customer isn’t stepping foot in-store, it’s essential they’re met with app experiences that are strong representations of brands. Retailers with their own app have total freedom and customization power over the digital experience.

On a macro scale, this will allow retail chains to boost loyalty by maintaining consistent brand messaging, aesthetics, and services — in a time of crisis, customers will always know what to expect. On a micro level, retailers can also use location data to hyper-personalize the in-app experience by store or region, changing messaging, product availability, or delivery procedure on a case-by-case basis. In this way, customers can be assured they’ll receive up to the minute information, reducing anxiety as they adapt to online ordering and delivery.

In-Store Support

While delivery is an option that works for many, some consumers may eventually return in-store. When they do, owned app experiences can help streamline their experience, letting them know when a store is at a safe capacity to center, enabling them to find items faster, and conduct contactless payments. App features that enhance in-store activities and share up-to-the-minute safety information can help gain customer trust as shoppers ease back into in-store routines.

Retailers who are able to provide the best app experiences will be the ones that have a lasting impact. While the COVID-19 pandemic reshapes customer norms, it’s critical that mobile product teams rethink how their mobile app experiences are serving as a guide to match new consumer behavior. Order-ahead, curbside, delivery, in-store modes are no longer industry buzzwords, they are baseline expectations of shops today. 

Coby Berman is COO of Radar.

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