Food rapid fulfilment specialist Deliveroo promises ‘a new way to shop’ with the opening this week of the first bricks-and-mortar Deliveroo Hop convenience store.
Alongside established Deliveroo services such as ordering by app for delivery or collection, the eyebrow-raising innovation is that customers can walk in and buy stuff – yes, a shop you can walk into; the old-fashioned retail model that has existed as long as the industry.
Well, not quite. In the Deliveroo Hop branch, shoppers are spared the trek up and down the aisles. Instead, like in a McDonald’s restaurant, they order – from a range including many items from partner Morrisons – using big, tablet-style screens.
It is not a million miles from an ‘Argos-but-food’ approach. Scroll through categories such as bakery, frozen or food to go, push the buttons for products you want, add them to your basket and collect from a counter. As in Argos, a screen displays progress on orders.
It all worked well – although perhaps the point is not so much that it is done well, but that it is done at all.
The debut Deliveroo Hop, on London’s New Oxford Street, is not far from Tottenham Court Road, Covent Garden and Holborn. It is next door to a Pret a Manger, there are a few independent convenience stores nearby, and five minutes or so away there is a branch of Sainsbury’s, for instance. Is buying on a screen so much more convenient than nipping into a more conventional shop you may well be passing?
In that respect, Deliveroo Hop may appeal to staff at the many offices in the immediate vicinity. How much though?
The extensive range of 1,750 items mirrors that of a convenience store, but how many people will want to shop that way for items such as ready meals or flowers? They would then need to lug their bag(s) home with them, in many cases through the evening rush hour crowds. How many would simply wait until they were getting off the Tube to nip into one of Tesco or Sainsbury’s thousands of branches for something to eat that night – one of the main shopping missions that Deliveroo Hop seeks to serve?
Rapid grocery delivery has grown over the past few years, but it remains a comparatively small market. That was clear when Sainsbury’s chief executive Simon Roberts revealed earlier this year that its fast-fulfilment proposition was the equivalent in sales terms of just two superstores.
So what is in it for Deliveroo? Grocery delivery is a growing part of its operations, alongside restaurant fulfilment. It works with everyone from Asda and Sainsbury’s to the Co-op and Spar.
The interims in August revealed that Deliveroo had “close to 7,000 grocery sites live in the UK and Ireland” – an increase of 17%.
It highlighted then the development of Deliveroo Hop, which then operated from delivery-only grocery stores run by Deliveroo, in partnership with grocers, and the launch of ‘Hop as a Service’: “allowing partners to use the Hop technology in their own locations with their own staff to pick and pack orders that are fulfilled by the Deliveroo rider network”.
“Rapid grocery delivery has grown over the past few years, but it remains a small market”
As operators of dark stores also face increasing opposition and regulation in some parts of Europe, a location that caters for conventional shoppers may also be looked at more kindly. Perhaps, as with Amazon and its cashless ‘Just Walk Out’ technology that is now being deployed by retailers including Sainsbury’s, the value of showcasing a convenience store to Deliveroo is to build the Hop as a service business, rather than as the basis for a nationwide chain of its own.
The Deliveroo Hop store worked fine and the staff were friendly, as would be expected in the opening week of a first of its type format.
But the extent to which there is demand for such a proposition, despite Deliveroo’s growth, must be limited outside a customer base skewed towards the urban young. According to Deliveroo, “a quarter of Londoners now use rapid grocery services once a week to get their groceries” and the convenience of its new service and various purchase and delivery options is expected to enhance its appeal to them.
We will see. Deliveroo may emerge as one of the q-commerce winners as some competitors scale back their operations or go to the wall.
But delivery is one thing. Whether consumers want an ‘Argos of food’ collection service is another. Opening a shop is not revolutionary. Surely it primarily shows the resilience and enduring appeal of established convenience operators?
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