For the food industry, the advent of super-fast food delivery is one of the most exciting areas today. New players are entering the category around the world, from entry-level startups to leading on-demand delivery providers.
PYMNTS research on What Consumers Expect from Their Shopping Experience, established in partnership with ACI Worldwide, found that 23% of consumers buy groceries online for home delivery and 8% of shoppers buy groceries online for home delivery.
Maxim Avtukhov, head of international markets at Yango Deli, said they are basically building a new way of trading. To have a positive unitary economy and make money, people need to optimize a lot of things by relying on technology. For example, they have numerous internal departments dedicated to solving complex logistics problems such as shipping, increasing lot prices, and so on. All of this is possible because they are building a system primarily from a digital point of view.
The online grocery delivery channel is more popular than digital in-store shopping or street pickup, although it falls far behind in-store shopping, which 82% of consumers consider to be their preferred channel. Many large companies in the sector operate from a reactive perspective, responding almost two years later to the changed consumer behavior caused by the initial outbreak of the pandemic. This month alone, DoorDash launched its super-fast delivery service.
Yango Deli, on the other hand, was able to take advantage of the fact that it was already active in space before the boom. They did this long before the pandemic broke out. The service is currently in use in about ten cities in Russia, as well as in several Israeli cities. Avtukhov said that essentially the real obstacle to this business model for overcoming offline traders is that it requires a lot of work. People rely heavily on couriers, order pickers and store managers.
Yango Deli’s long-term future-oriented solution is to automate every step of the process. Over the summer, Yandex partnered with US delivery service Grubhub to begin robotic delivery trials at Ohio State University, and last month the partnership expanded to include the University of Arizona. Also, unlike many other live food delivery robot tests, these machines are now completely autonomous and operated remotely without personnel.
Today, the tech firm is evolving its automation technology for the last mile looking to integrate robotics with other parts of the order fulfillment process. Avtukhov said he would also develop in-house robot stores that would help them simplify how the stores operate and ultimately make them more convenient for end customers. In London or other capitals, the combined market share for all players is well below 1% of what the market could be in four years. He highlighted the already palpable rigidity in which consumers seek ultra-fast deliveries with a high probability of becoming loyal customers. He mirrors the predictions of many in the industry that there will be massive consolidation for just a handful of key players. You’d expect each service to specialize and find its place in the super fast delivery category.
Avtukhov predicted that in five years each market will be divided between three and a maximum of four players. Each player must occupy a specific space. It is not like the offline world where there are so many offline retail chains that can operate the market at the same time.
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