Ben Penrose’s Post

'CUSTOMERS WANT CONVENIENCE' DOES NOT NECESSARILY MEAN THE SAME AS 'CUSTOMERS WANT SPEED' Over $9 billion has been invested into quick commerce operators over the last 5 years. At the time this may have seemed like a lucrative move, yet today's reality paints a different picture. Apart from Gopuff, which secured a significant portion of that investment, the fate of other operators like Getir, Gorillas, Flink, Dija (now Gopuff), and @Jiffy is either extinction or full retreat. But why did venture capitalists pour such substantial funds into these channels? A closer look at profit and loss statements, burn rates, average order values, customer acquisition costs, and customer lifetime values must surely have revealed an unsustainable model. Yes, the Covid pandemic fueled demand and a market need for these operators, but even at the time the operating economics don't hold up and post-pandemic those economics got worse, especially outside densely populated areas like city centers. I believe the misconception that 'customers want convenience' equates to 'customers want speed' led to this massive mistake in future growth predictions and therefore investment. To customers the term 'convenience' encompasses a broad spectrum of personal factors like pack sizes, gift wrapping, delivery options, and time slots, all of which can change and be reprioritised from one purchase to the next. Venture capitalists and investors took a big gamble on quick commerce without truly grasping customer motivations. While pandemic lockdowns may have driven a distress element to purchasing and therefore a willingness to pay a premium for delivery, post-pandemic realities reveal a shift in consumer behavior. Distress occasions and products customers were prepared to pay a premium for dried up. Manufacturer investment for limited awareness and fewer sales was sparce. Customers become more expesive to acquire and spent less, less often as well. Like #Betamax and #VHS, Quick Commerce was always a battle two different formats, Operators and Aggregators. Even before the pandemic was over it was clear that the aggregator model of Deliveroo, UberEats and Just Eat Takeaway.com was signficantly more expansive, sustainable and profitable than the operator model ever could be. Despite this, further investment poured into quick commerce, baffling those of us familiar with the food and drink industry. I feel for those who are about to lose their jobs as Getir retreats. Those employees have been missold on the possiblity of turning this flawed business model around. It was never going to happen. #digitalcommerce #ecommerce #fmcg #fmcgindustry #cpg #cpgindustry #quickcommerce https://lnkd.in/e_ESv4R8

As the European Parliament debates problems related to e-commerce and the mass ordering of goods from third country online stores with the Commission this evening, I wanted to reshare the story of Hunni Concept Dog Store 🐶 and a couple of highlights (links in comments) how Wolt & local commerce can help balance the scales: “Despite Hunni’s popularity, it faces stiff competition from massive chain stores. “We can’t match their size or quantity, but we can compete on our personalized service,” Stina says.” 💁 “Before partnering with Wolt, Stina dealt with unreliable delivery services. “Products often disappeared or arrived in poor condition. Delivery accounts for 40% of our business, so finding a reliable partner was crucial,” she says. Wolt has improved delivery speed and reliability, allowing Hunni to offer items like frozen goods and better manage stock rotation. With Wolt, Hunni “can offer the same level of convenience as a billion-dollar company, without requiring the same resources”. 💯

Getir Leaving Europe and the US: 12 Essential Lessons We Must Learn From The Quick Commerce Experiment (Lessons 5-8) 5. 💸 Couponing is almost never the answer (unless the question is 'How can we burn cash quicker?'). 6. 🛵 Speed is not the biggest driver of Convenience Getir says: “Our mission is all about providing convenience without compromise: delivering high-quality, fresh, and affordable groceries sustainably within 15-20 minutes.” The error here is to assume that convenience equals ultra-fast delivery. There are very few uses cases where most of us are willing to pay $3.95 for a grocery store item in 15 minutes. Calpol, perhaps? Nappies? A key ingredient if I’m cooking a dinner party? What we should take from the q-com experiments is that convenience is a lot more than speed. Where food delivery services should now focus is on: – making it easy to shop on a mobile and – making it easy to buy larger baskets. Both of these would equate to ‘convenience’ much more than delivery speed, and neither are done well by existing supermarkets. There is a huge competitive advantage to fix this. 7. 🤘There are pivots to profitable business models if you take them The proposition of q-com always combined 2 parts: – ‘delivery in 30 minutes’ was the one every startup hung their hat on. – ‘Logistics and delivery for brands and retailers’ is the one more often overlooked or under-utilised. Now many q-com players are looking at what proposition allows them to survive and thrive. Glovo partners with retailers who need help with e-com logistics and delivery. Wolt was early in providing a logistics-as-aservice offering. Jiffy Grocery become Cloud Retail offering logistics, store management and front end software for retailers. These are all models that can work, and were recognised by aggregators such as Instacart, DoorDash, Deliveroo etc, long before q-com players fully realised the challenge of the ’30-minute’ ‘let’s disrupt grocery’ proposition. 8. 📰 🚚 Headlines and branded vehicles do not equal success. Getir's business in the US, Germany, the Netherlands and the UK added up to just 7% of its revenues. SEVEN PERCENT OF REVENUE! For a while, Getir was the poster child for quick commerce – there were plenty of headlines, plenty of branded bikes, but a tiny proportion of revenue outside of home country Turkey. ----- Tomorrow I'll post lessons 9-12: VC investors, supermarket q-com, network effects and GoPuff Here's lessons 1-4: https://lnkd.in/eVRceYM9

"Getir to leave Western Europe The company wants to leave Germany, the Netherlands and the United Kingdom – after pulling out of Italy, Portugal and Spain last year." (retaildetail.de) The ongoing consolidation in the online grocery shopping market doesn't surprise me. Very fast delivery of groceries at prices similar to those in brick-and-mortar stores seemed too good to be true, as were the very high-value coupons used to attract customers. Gorillas had to let many employees go and was acquired by Getir. Apparently, the business plan didn't work out. In my opinion, this is good news for the competition (because of reduced competition) and not so great news for customers (as prices might increase). How can a company make online grocery shopping successful in the long run❓ What should be prioritized❓ What stakeholders need to pay attention to❓ #retail #ogs #food #grocery #shopping #retailing #newmarkets #newchannel #onlinegroceryshopping #ecommerce

Getir Leaving Europe and the US: 12 Essential Lessons We Must Learn From The Quick Commerce Experiment (Lessons 1-4) 1. 💰 VC investment in quick commerce was a bubble - we can call it now.  Investment into every territory with a cookie-cutter model sent the wrong signal to quick com founders – that rapid user growth and high rates of couponing would drive success. It didn't. 2. 🥇 The aggregators have won The 'dark store' model of quick com is extremely hard to make profitable (unless you operate in countries with low wages and medium order size). Even Getir’s UK Ops Director Samuel Ader Getir announced it would aggregate other brands and retailer products a few weeks before their departure from Europe and the US. 3. 📈 Growth through acquisition is a mistake and a distraction if the core model is not profitable. Getir acquired Weezy in 2021 and Gorillas and FreshDirect in 2023. There were even talks of an acquisition of Flink only a few weeks ago, indicating that until the Getir board stepped in (was it investors Mubadala Capital and G Squared, or the original Russian Oligach investors?), the management were seriously considering that growth was still a way out of their financial challenges. There are lessons to be learned here from Uber too, which acquired Postmates by Uber, Cornershop and Drizly, an Uber Company, and has now sunset the Cornershop and Drizly brands – growth through acquisition is an expensive risk. More views from me on why Getir's acquisition of Gorillas here: https://lnkd.in/eGc2GPpi 4. 🏃♂️‘Disruption' and 'Move Fast And Break Things' is often not good. Retailers – especially grocery retailers – know what they are doing. They know the tight margins. And they know that most grocery shoppers will reluctantly pay a modest fee for delivery of large baskets. There's a reason why quick commerce has not been pushed by the large retailers as a cornerstone of their e-com strategy. The proportion of people who want smaller baskets and are willing to pay inflated prices and delivery costs is still relatively small in many EU countries. Shopper behaviour will change, but the timeframe for change will be 10 years. If you try to disrupt grocery, you'll learn that grocery - for the most part - is already well-optimised to shoppers' needs. Part 2 coming tomorrow... Couponing. 15-min delivery, pivoting and news headlines.

It’s sad news that Getir is exiting its European markets. The doomsayers who always doubted the quick commerce business model are probably feeling vindicated. But they’re wrong. I was at Gorillas-Getir for the highs and lows of 2022 and 2023 and we were undoubtedly on a journey to order profitability. It’s not rocket science and we got very close to it at Gorillas through: 🍌great product range with the right mix of basics, unique brands and impulse items, helping us hit a strong basket size 📢 smart monetisation of retail space with selected brand partners, making us money that went straight to the bottom line 🚲 brilliant algorithms enabling network and rider optimisation, meaning our riders could deliver far more orders per hour than any analyst ever thought possible 😀 friendly riders who went above and beyond to help the customer, putting a smile on our customers’ faces and differentiating our service Quick commerce is alive and kicking - there’s a reason Uber Eats and Deliveroo are putting all their money behind it, and Tesco has brought Whoosh to over 1,000 shops. Sure quick commerce didn’t merit the heady tech valuations of 2021 and as a very young business, our proposition wasn’t perfect and we still had a lot to learn. But we pioneered a new model at Gorillas-Getir and quick commerce isn’t going away. We’ll always buy some food in physical stores but sometimes we just want our groceries asap without having to leave the house, and there will always be a market for companies serving that need. Thinking of all my former colleagues today, but confident that the skills we learnt in one of the most faced paced industries of the last few years will stand everyone in good stead throughout their careers #gorillas #getir #fasterthanyou

Earlier this year we saw a major e-commerce transaction in the form of Uber’s near-billion-dollar takeover of the Taiwan unit of grocery/food delivery platform foodpanda.   The blockbuster deal forms part of Uber Eats’ strategy to increase its footprint in Asia, and will see foodpanda’s customers and merchants in Taiwan transition to Uber Eats.   The deal also serves as a reminder that, in the words of our latest Digital Commerce report, “Demand for doorstep services is still a key industry driver, in spite of the e-commerce slump seen after the end of the lockdown era.”   You can download our latest reports on Digital Commerce and other key tech sectors here: https://lnkd.in/ezx2yBdE

IWAN BUDNIKOWSKY GmbH & Co. KG or better known as BUDNI and Wolt: redefining convenience with ultra-fast delivery Budni, a leading German drugstore chain, has partnered with Wolt to offer a game-changing service: customers in Berlin and Hamburg can now receive 10,000 items delivered in just 35 minutes—directly from six local stores. This delivery speed isn’t just fast—it’s a milestone in the drugstore industry, meeting the growing demand for instant solutions in everyday shopping. What makes this service stand out? - Price transparency: The prices match in-store rates, including weekly offers. - Loyalty integration: Customers can still collect bonus points. - Unmatched convenience: Essentials are just a click away, with reliable delivery in record time. This partnership signals how retailers are innovating to cater to consumers who prioritize speed and ease. With a highly competitive German market dominated by dm-drogerie markt Deutschland and Dirk Rossmann GmbH, Budni’s strategy offers a clear differentiator in a rapidly evolving landscape. Industry context: The rise of instant delivery platforms has reshaped customer expectations. With players like Wolt making fast logistics feasible, collaborations like this are key to staying relevant and building loyalty in both online and offline channels. #drugstoremarket #budni #wolt #35mindelivery #lastmiledelivery #retailinnovation #ecommerce #omnichannel #fmcg #customerservice #deliveryspeed #berlin #hamburg #germany #europe #retailstrategy #speedmatters #consumertrends #startups #retaitech #partnerships #customerloyalty #retail #consumergoods #deliverysolutions #marketstrategy #competition

While seeing lots of ongoing discussions surrounding the volatility in the European quick-commerce (QC) and predictions of ultra-fast delivery, it is worth observing the global presence of Rapid Delivery (RD) channels. 1. While startups like Getir and Flink struggle to achieve profitability in Europe, it's noteworthy to highlight the success in the Indian QC market: Blinkit, Zepto, and Swiggy's Instamart are spearheading a thriving $5 billion market. Additionally, lesser-known startups like Ninja 🥷🏽 نينجا in Saudi Arabia are making significant strides. Of course, the last mile is the key. 2. In Europe, where last-mile delivery is one of the main challenges, aggregators launch their own QC: Wolt Market, Glovo with SuperGlovo or Deliveroo Hop actively embrace the dark store model and ultra-fast deliveries. They can easily leverage their existing food delivery networks to enhance their grocery delivery services. Globally, it also works: foodpanda's Pandamart, DoorDash with DashMart, and Rappi Turbo are capitalising on their food delivery expertise to venture into the emerging grocery delivery sector. 3. Moreover, RD is expanding beyond QC, with aggregators increasingly facilitating deliveries from third-party retail stores: UberEats, Deliveroo or Instacart. Although delivery times are slightly longer, ranging from 30 to 45 minutes, they still effectively cater to the immediate needs of consumers seeking convenience. The dark store model, while resource-intensive, contrasts with the aggregator model, which offers a sustainable balance by combining higher margins from restaurant delivery with the low capital expenditures associated with grocery delivery. The key to success in this sector is obvious - establishing a business model with a vision of the positive unit economy from the outset.

🚀Current News, Rapid Insights: Q-Commerce Insights from Glovo 📈 Glovo’s Daniel Alonso Moreno predicts #qcommerce as a major driver of growth for local retailers in 2024 in Retail Technology Innovation Hub's article. SO WHAT? 🤔 Major industry players like Glovo continue to champion rapid #grocery delivery, despite the present q-commerce challenges in Europe. Stay tuned for more rapid insights from our team – we will highlight areas where q-commerce excels. 🚀 #rapiddelivery #delivery #sustainability