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Challenger apps Glovo & Deliveroo are putting bricks-and-clicks retailers under pressure

Shoppers are once more buying in different ways – and retailers and brands are adapting. Image: Shutterstock

Spanish delivery challenger Glovo started working with Carrefour in 2019 offering urban customers grocery delivery within 30 minutes of ordering. The service operates seven days a week in four countries Spain, Italy and Argentina and France, where the Glovo/Carrefour partnership operates under an exclusivity agreement.

The partnership enables customers using the Glovo mobile app to buy groceries from a carefully-selected range of 2,500 products across several categories, including fresh produce, groceries and everyday items, such as health & beauty and household goods. Glovo couriers collect customer orders picked and packed at a network of Carrefour Market, Carrefour City and Express stores and deliver them to the customer by bicycle or scooter.

The service operated initially in Paris, Seville, Valencia, Milan, Rome and Buenos Aires, and has since been expanded to other cities. Glovo, which was founded in 2015, is ambitious. Upon signing the deal, Glovo CEO Oscar Pierre said: “Our goal is to make grocery shopping faster, smoother and more convenient than ever before for the customer. Our partnership with Carrefour will allow us to do this, building on this new vertical and helping us drive growth further around the world.”

Since 2019, the challenger has delivered more than 250 million orders to customers in 23 countries and over 900 cities around the world. Orders collected and delivered include groceries, food from restaurants, presents “and giving everyone easy access to anything

in their city.”

Glovo has also opened its own dark stores for fulfilling orders. By the end of 2021, its Q-Commerce division will have opened 100 dark stores across Europe. The stores will speed up delivery, pick and pack orders itself and send couriers out from its own locations. Glovo’s Q-Commerce division is on track to reach an annual Gross Transaction Value (GTV) of more than £255m (€300m) this year, and expects that to more than triple by the end of 2022, surpassing a run rate of €1bn.

More recently, Deliveroo has partnered with Morrisons in the UK to fulfil orders from its own dark stores. Shoppers can buy from a range of up to 2,000 items from Deliveroo Hop stores, with delivery made in ten minutes maximum.

Deliveroo says Hop sits alongside its existing on-demand grocery service, which already delivers from more than 4,600 grocery stores operated by existing partners – from Waitrose to the Co-op. It promises a fast and accurate service and a wider range, with fewer substitutions needed, thanks to the use of its grocery management technology and network of more than 50,000 delivery riders to deliver from its own dark stores. Morrisons will supply its own brand products as well as third-party brands, from wines and ready meals to fresh meat and fish.

A European study of mobile app reviews shows that industry challengers in the retail food and grocery sector are receiving better reviews than traditional supermarket retailers – with such apps outperforming traditional retailers on price, order and delivery, as well as in consumer satisfaction.

The research, ‘A Grocery Shopping Apps Friction Report’, was conducted by Mobiquity, a full-service digital transformation enabler, analysing one million app ratings and 22,000 comments including a study of 24 traditional and challenger retailers in the UK, Belgium and the Netherlands. Among UK retailers featured in the study were Tesco, Amazon Go, getir, Gorillas, Morrisons, Ocado, Sainsbury’s, snappy shopper and Waitrose.

The data shows that food and grocery challenger apps are receiving better reviews than traditional supermarkets. While over 2 in 5 (44%) reviews showed high satisfaction levels with traditional supermarket apps, challenger apps performed better with over half (56%) of

customer reviews citing satisfaction. Customers using traditional supermarkets also cited a larger number of ‘bugs’ – issues with the app experience – compared to challenger apps.

Retail food and grocery challengers are drastically outperforming traditional supermarket retailers on price and order, as well as delivery features. In the UK, on delivery traditional retailers secured an average rating of 3.6, while challenger apps scored 4 out of 5 in this core functionality. For pricing, UK traditional food and grocery retailers recorded an average score of 3.4, compared to 3.9 for UK food and grocery challenger brands.

The research found the following features were frictions for consumers using traditional retail apps in the UK, including ordering products and payments (ranked 2.6 out of 5), onboarding (ranked 1.9 out of 5) and reliability (ranked 1.7 out of 5). In contrast, challenger apps secured an average rating of 3.2 out of 5 for the ordering feature.

Commenting on the report, Danny Groenenboom, strategy director retail Europe, Mobiquity says: “During the Covid-19 pandemic consumers have increased their reliance on online shopping, and retailers have embraced mobile apps in response to challengers such as Gorillas, Picnic and others entering the market. Not having a seamless mobile app shopping experience could cost retailers, as they will lose the digital opportunity to retain and grow customers as the ecommerce market continues to expand.”

He adds: “Challengers across all three regions are receiving better reviews than traditional supermarkets, as customers are experiencing less friction along the app customer journey. To prevent the gap getting even bigger, traditional retailers need to prioritise their digital customer experience and reduce business frictions along every step of the customer journey to increase customer motivation to buy products and services.” Competition is only going to intensify in the future.

This article was originally published in the Grocery Sector Report 2021. For a leading strategic and commercial analysis of the wider grocery landscape, download the full report here.

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