DoorDash makes foray into on-demand grocery delivery

Last-mile food delivery provider DoorDash has entered the on-demand grocery delivery arena, led by the launch of its new DashPass service.

The expanded offering, announced Thursday, enables customers to place orders with participating grocery retailers at DoorDash.com or via the DoorDash mobile app and have their groceries delivered directly to their homes by DoorDash in as soon as an hour, without the need for scheduling.

DashPass is available through a $9.99 monthly subscription, DoorDash said. Members receive unlimited free deliveries and reduced service fees for orders of at least $12. Customers also can order groceries via DoorDash on a per-order basis for a $3.99 standard delivery fee (depending on the service area), with no minimum order amount.

The service stands to boost DoorDash’s presence in the grocery sector, as the San Francisco-based company has primarily been known for restaurant food delivery. DoorDash thus far has provided grocery retailers only with last-mile delivery of groceries and meals through its white-label DoorDash Drive service. Retail partners fielded, picked and packed the orders. Now DoorDash is bringing to the table an end-to-end online grocery marketplace solution, encompassing ordering, fulfillment and delivery.

Related:Watch out Instacart: DoorDash is now delivering groceries and restaurant goods through one-stop shopping platform DashMart

According to Fuad Hannon, head of new verticals at DoorDash, the new service marks “the extension of DoorDash in the overall grocery business.”

“We’ve been partnering with folks like Walmart, Albertsons and Hy-Vee on the last-mile logistics product called DoorDash Drive, where consumers go to those stores’ apps or websites to place orders and then we power the delivery. What we’re now announcing is the ability for users to go to DoorDash.com or the DoorDash app and purchase their groceries on the DoorDash platform,” Hannon explained.

Initially, DoorDash is launching on-demand grocery delivery in California markets such as the San Francisco Bay Area, Los Angeles, Orange County, Sacramento, San Diego and the Central Coast with Smart & Final and in Midwestern markets including Chicago, Cincinnati, Milwaukee, Detroit and Indianapolis with Meijer and Fresh Thyme Farmers Market.

“DoorDash provides another convenient way for customers to get the value, selection and quality that Smart & Final offers, especially at a time when some are looking to limit trips outside their homes,” Navin Cotton, director of digital commerce at Commerce, Calif.-based Smart & Final, said in a statement. “DoorDash’s on-demand grocery service is a nice addition to our online shopping options, and with delivery in under an hour, we know Smart & Final customers are going to appreciate it.”

Related:Walgreens kicks off last-mile delivery with DoorDash

Midwestern retailer Meijer is part of the initial rollout of DoorDash on-demand grocery delivery.

Plans call for DoorDash to expand the on-demand service to more grocers — including Hy-Vee in the Midwest and Gristedes/D’Agostino in New York City — in the coming weeks. Hannon said the overall footprint for the first phase of the rollout will give more than 75 million Americans access to online ordering and delivery from a grocery store through DoorDash.

“What’s particularly exciting about this is that, one, it will truly be an on-demand experience — no delivery time slots or windows and delivery in an hour,” he said. “The second thing that makes us excited from a consumer perspective is that it will be part of DashPass, which is DoorDash’s subscription product. That is the largest on-demand subscription product in the country. So consumers who are DashPass subscribers will have access these grocery merchants for free delivery.”

A selection of more than 10,000 grocery products — including perishables such as dairy and eggs, fresh meat and fish, and local produce — will be available for delivery via the DoorDash on-demand service, the company said. 

“This latest announcement by DoorDash is another tool that allows our customers timely access to the fresh offerings that we provide at Hy-Vee,” commented Tom Crocker, senior vice president of e-commerce at West Des Moines, Iowa-based Hy-Vee. “In today’s ever-changing environment, customers want quality products delivered in an efficient manner straight to their homes. This new service helps us grow our grocery business while meeting the needs of our shoppers who are on the go.”

Grocery and other retailers will be able to choose from a menu of e-commerce capabilities from DoorDash, ranging from delivery-only to a full turnkey solution

Regional and local grocery retailers that have used the DoorDash Drive white-label fulfillment solution for last-mile delivery include Walmart, Hy-Vee, ShopRite and Coborn’s, as well as Woodman’s Market, Kowalski’s Markets and independent grocers under the Piggly Wiggly banner. DoorDash also has provided meal delivery service for such chains as Wegmans Food Markets, Hy-Vee, Gelson’s Markets, Kowalski’s, Big Y Foods, Food City, Village Super Market, Save Mart, Lucky/Lucky California and Coborn’s, among others.

After a pilot program, Rochester, N.Y.-based Wegmans launched DoorDash-powered meal delivery from select stores in April 2019 through the Wegmans Meals 2GO app.

“We promise to ‘make great meals easy, and it doesn’t get any easier than this,” according to Erica Tickle, e-commerce director at Wegmans. “What’s unique about Wegmans Meals 2GO is the variety of delicious menu options. Since teaming up with DoorDash last year, we listened and learned and fine-tuned a menu that has something for everyone at home or at work. We’re excited to expand our partnership with DoorDash by bringing our restaurant-quality meals to the DoorDash marketplace.”

DoorDash is supporting the grocery marketplace launch with a promotion in which new and existing DashPass members can get $15 off their next order from all participating grocery and convenience stores during the week of August 24.

“Over the coming weeks and months, we will cover new geographies and new markets where we don’t operate in today as well as on-board additional [retail] partners who are excited to be part of the DoorDash marketplace for grocery,” Hannon said. “This really feels like the next big bet for DoorDash as we think about taking grocery and extending beyond the Drive product.”

Grocery and other retailers will be able to choose from a menu of e-commerce capabilities from DoorDash, ranging from delivery-only to a full turnkey solution, Hannon noted.

“DoorDash is a very merchant-first company. What we want to do is build and deploy what each of our partners want,” he said. “There’s a certain set of partners who just want the white-label delivery piece; Walmart is in that bucket. There’s a certain set of merchants that want to be on the marketplace side but don’t have their own app and would benefit from the white-label piece, like Smart & Final. And then there’s a set of merchants that have the capabilities [for online grocery] and want both. Hy-Vee is a great example. Hy-Vee is a partner on the DoorDash Drive white-label fulfillment product and will be launching on the marketplace. There’s also a certain set of merchants that are only interested in the prepared meals business, and we’ll partner with them on that. Our core ethos is that we want to do what’s right for the merchant. We want to help them grow their business, particularly in this COVID environment that we’re all operating and living in. So depending on what the merchant wants, we will offer that.”

Besides grocery, DoorDash recently has expanded its delivery platform into the drug and convenience store retail sectors, including partnerships Walgreens, CVS Pharmacy, 7-Eleven, Casey’s General Stores WaWa and Circle K Stores.

Overall, DoorDash provides on-demand delivery and logistics services to local and national businesses in more than 4,000 cities and all 50 states across the United States, Canada and Australia.