Home delivery and subscription boxes open the world to retailers
We’ve come a long way from our hunter-gatherer roots. Gone are the days when we foraged far and wide for food. Now with the expansion of home delivery and subscription services, the farthest we need to travel for our next meal may be the front door.
There are a lot of big players looking to jump into the business of online grocery shopping and home delivery. This includes Walmart and Amazon. Even the United States Postal Service is vying for a stake in the delivery portion of the business. Currently, there is no retailer with a complete grocery offering that provides direct to home delivery nationwide. Peapod, one of the early leaders in this category, services specific markets often around population dense urban areas. Netgrocer.com uses FedEx to make the actual deliveries.
Having gained experience through its UK subsidiary, Asda, Walmart is preparing to launch full-scale home delivery in America. Amazon, however, seems to be making the greatest strides. Amazon has refined its AmazonFresh grocery delivery around its home base of Seattle and has recently moved into the Los Angeles and San Francisco markets. By tapping into its considerable expertise and building on the warehouse network the company now uses to deliver other less perishable goods, the expansion of AmazonFresh could be rapid.
Another interesting development in food delivery is the expansive growth of subscription boxes – especially in the snack category. (We last reported on subscription boxes in a June 2013 post.) Curated subscription boxes are a great way to promote trial and awareness.
Snack subscription companies like UK-based Graze.com have made a huge impact. Graze, which reported $70 million in sales before coming to the US has already gotten the attention of major food manufacturers. General Mills has launched a knockoff service called Nibblr in direct competition to Graze.
Subscription boxes have moved from delivering shoes (Shoedazzle) and cosmetics (Birchbox) into the world of shelf stable food items. This is perfect for snacking. Companies are now innovating and segmenting to reach niche snacking markets – especially lifestyle oriented snacking. Services such as Sprig cater to health conscious consumers while companies like JackPacks are delivering to fitness buffs and bodybuilders.
Both of these delivery systems open up opportunities for food manufacturers to take their products to market. This is especially true for specialty food companies. Home delivery alleviates the hurdle of having to win shelf space. And the ability of subscription boxes to micro target specific markets opens up a world of possibilities for niche lifestyle-oriented food producers.
Whether your food company makes gourmet jerky or specializes in food that’s verifiably vegan, now, with new delivery options where there’s a front door there’s your store.