DoorDash must be more aggressive and bold in hugely competitive restaurant and grocery delivery space

Every restaurant and grocery delivery company has themselves convinced that they're actually a technology and logistics company. They're not. Shipt, Instacart, DoorDash, Uber, and Amazon are falling over themselves to deliver products for retailers; it's a race to the bottom.

So says Brittain Ladd, a supply chain consultant and former Amazon executive.

Ladd gave his thoughts as The Information reported that DoorDash had hired former Amazon and Flexport executive Parisa Sadrzadeh as VP of Strategy and Operations, reporting directly to COO Prabir Adarkar.

Adarkar has been moved over into the COO role from CFO in an effort to focus on diversifying delivery outside of restaurants, a strategy the company views as key to future growth.

Over the last several years, DoorDash has moved from exclusively restaurant delivery to also deliver merchandise from Target, DICK'S Sporting Goods, Best Buy, Lowe's Companies, Inc., Michaels Stores, Save A Lot, and others.

Called ‘white label delivery’, consumers can order items from a retailer’s website and have it delivered directly to them from third-party platforms like Uber and DoorDash, rather than go through traditional parcel delivery companies like the United States Postal Service, UPS, or FedEx.

In addition, DoorDash is exploring initiatives to develop software that would allow merchants to build online storefronts and accept online payments, as well as accepting e-commerce returns directly from consumers and delivering to UPS, FedEx, or the US Postal Service.

In a LinkedIn post, Ladd said: “So what? Is DoorDash finally ready to think BIG? If so, then I strongly recommend they do the following.”

1. Acquire Instacart to become the dominant fulfilment and last mile delivery leader for groceries and other retail products. There is no other move that DoorDash can make that will grow their market share and revenue faster than acquiring Instacart.

2. Create "DoorDash DSP" and franchise the business. DoorDash will become a strategic partner to retailers capable of managing the end-to-end process for in-store fulfilment and delivery. This is a massive opportunity for DoorDash.

3. Become a grocery retailer. This is best accomplished by acquiring Instacart. The leader in online grocery market share is Walmart with 25.7% followed by Amazon with 22% and Instacart at 21.6%.

Instead of fulfilling online orders for other grocery retailers, DoorDash can partner with Lineage, SpartanNash, UNFI, etc., to sell groceries direct to consumers. Online grocery sales will exceed $220 billion in 2024. This is an opportunity worth exploring.

4. Divest the company. Growth is slowing at DoorDash. If it isn't willing to truly THINK BIG and take risks, divesting the company should be explored.

It must become much more aggressive and bold, Ladd concluded.

The company did not respond to our request for comment.