The need for speed is killing the rapid grocery delivery sector
Gorillas is abandoning its 10 minute grocery delivery guarantee, and is now promising to “deliver in minutes" with no guarantee of when the order will arrive.
In addition, the company is removing its logos and other advertising from across the windows of its dark stores.
These are wise moves, according to Brittain Ladd, a former Amazon exec and supply chain consultant.
“As a consultant and advisor to the rapid grocery delivery industry, I've made it clear that current business models are guaranteed to fail,” he says in a LinkedIn post.
“In fact, I've stated on LinkedIn, to the press, and at conferences, that one of the worst business models ever created was rapid grocery delivery in its current format.”
He adds: “For example, the insistence on the part of RGD companies to cover the windows in their dark stores in the cities they operate in the US, has created a modern day version of a crack house.”
“People come and go all hours of the night and day, and when someone tries to enter, they're denied entry. The air of secrecy has resulted in dark stores being viewed as "seedy" establishments in the neighbourhoods they've been opened.”
According to Ladd, RGD companies cover the windows of their dark stores as they believe that what they do inside is somehow proprietary information.
“It's not. All dark stores are manually operated. Dark stores have either racks, tables, shelving attached to walls, coolers, freezers, or a combination of these items.”
“What about software? Isn't that proprietary? In most cases, yes. However, the software developed by RGD companies is so limited, that I've yet to see software in use that I believe has any value.”
The reason why dark stores are manual instead of using a micro-fulfilment system is because the RGD industry created a model that carries few products, and that has such short delivery windows. It’s therefore not possible to automate dark stores, Ladd argues.
He concludes: “Gorillas has created a unique opportunity by slowing down the speed of its deliveries. It can pivot and introduce automation into larger and fewer dark stores.”
“It can increase the number of products it sells from 1,500 to easily 10,000 or more. Automation can pick and fulfil orders in minutes allowing Gorillas to still offer rapid deliveries; just not in 10 minutes.”
“The RGD industry needs to understand that its need for speed is killing it. It’s time to pivot.”
