Over the past two days, we are getting a clear indication that DoorDash is focusing on convenience stores as its next leg of growth. First, it was Bloomberg reporting about the potential Gorillas investment, which has recently launched in NYC, and in today's blog post, the company outlined a new initiative DoubleDash.
The market opportunity in c-store makes sense given the size and fragmentation of the industry. There are 100k independent convenience stores across the U.S. looking to transition to the on-demand economy. In addition, roughly 93% of Americans live within a 10-minute drive of a convenience store, which makes the convenience store model perfect for last-mile hubs and pickup points. In 2020, in-store sales across the entire industry were $260 Billion. However, according to a NACS 2020 survey, only 46% of stores offered any form of delivery, and this is likely DoorDash with its dominant market share, which competes directly with its merchants via DashMart. DashMart is a "DoorDash-exclusive store" that offers thousands of convenience and grocery items and products from local restaurants.
As DASH said in the blog post, "DoorDash’s vision has always been to deliver all the best of your neighborhood right to your doorstep, from restaurants to convenience, grocery, retail, pet supplies, and more. We are now excited to take it one step further by allowing you to shop across multiple stores and categories, all in a single order.” DoubleDash is an innovation that lets you add items from nearby stores to your original order for no additional delivery fee or order minimum. Both orders will arrive together, with the same Dasher.
How DoubleDash Works:
- Place your restaurant order on DoorDash and after checkout, look for the DoubleDash option on the map to add items from nearby stores.
- From the store page, select your favorite drinks, snacks, and any other items you want. Then, add them to your cart and check out with no additional delivery fees or minimum order size.
- From there, your Dasher receives both orders and will deliver them together.
DoubleDash is currently available with 7-Eleven, Walgreens, Wawa, QuickChek, The Ice Cream Shop, and DashMart. In some markets, DASH is piloting DoubleDash with local restaurants, “where you will have the option of adding complimentary items from nearby local restaurants to your initial meal order.” The company is also introducing DoubleDash in Canada. DoubleDash is the next step toward getting everything you want from your neighborhood delivered together in a one-stop-shop experience.
More on Gorillas
Germany-based Gorillas launched its speedy grocery delivery service here in the U.S. on May 30. The service will provide on-demand delivery of groceries in 10 minutes or less in New York City, starting in Bushwick, parts of Williamsburg, Downtown Brooklyn, Cobble Hill, and Boerum Hill. Gorillas are part of a new wave of dark, delivery-only grocery stores in dense residential areas. These stores carry fewer items than a supermarket, but because they are embedded in neighborhoods (to help control inventory) and have a limited delivery radius, they can quickly process, fulfill, and deliver orders. A number of these speedy delivery stores have gotten funding throughout 2021, including Weezy in the U.K., Getir in Turkey, and Glovo in Spain. We are just starting to see this small, speedy, delivery-only store model emerge in the U.S. As we suggested in our DASH deck, all of these super-fast grocery stores have the potential to change our relationship with grocery shopping. Instead of weekly or twice-weekly trips to the store, getting groceries becomes more like a utility that you turn on whenever you need something at that moment. This new model seems to work best in urban locations, as it’s no coincidence that both Gorillas and Fridge No more operate in New York City. It’s a dense, urban environment with a lot of potential customers in a small geographic area. Ten-minute delivery wouldn’t work as well in more rural areas where houses are spread out. We’ll also have to watch and see how the model develops, but c-stores seems to be the next big target market for DASH.
Thinking out loud, what does this mean for CASY?
More to come.
