Kroger achieved more than $10B in ecommerce revenue in 2021. The CEO Rodney McMullen stated that the company aims to double its digital sales and increase profitability by 2023. Kroger Delivery Now was launched to help achieve this goal. It will use the retailer’s extensive network of more than 2700 stores in order to reduce delivery times.
McMullen stated that “Kroger Delivery Now” is a unique solution in the ecommerce sector, and not just in the grocery sector. McMullen stated that the new service offers customers an additional way to shop with us, and addresses the importance and urgency of convenience and speed. This service is operationally available to 50,000,000 homes. It’s an extension of our thriving Ecommerce model that demonstrates strategic interplay between our assets, extensive supply chain, dedicated fulfillment centers, fleet, and supply chain. Instacart’s unrivaled fulfillment system and last-mile technology combine to offer our customers anything they need, any time, anywhere, without compromise.
Instacart also launched the Convenience Hub within the Instacart Marketplace, which allows for the delivery of convenience items 24 hours a day. Instacart Express members receive priority delivery in 30 minutes for orders above $10. Instacart convenience orders have increased by more than 150% in May 2021. Nearly 20% shoppers opt for Priority Delivery at checkout.
Instacart and Kroger have been partners since 2017. Instacart launched two-hour grocery delivery in 2017, and has steadily increased its reach over the years. Instacart and Kroger have expanded their collaboration to include alcohol in 2019. Instacart launched an internal delivery service with 55,000 products in 2018. Instacart now delivers alcohol from nearly 1,500 Kroger locations across 15 States.
Instacart and Kroger will be in fierce competition for convenience store delivery. As it seeks to be the leader in “instant needs” delivery, virtual c-store Gopuff has raised more $2B in financing in 2021. Kroger is the better retailer. Gopuff delivers mainly from 250microfillment centers. This is a small amount compared to Kroger’s large store footprint.
Gopuff may have an advantage on the data side. RideOS is a platform that gives the retailer access to proprietary technology for advanced routing and on-demand dispatch. The Gopuff Business Insights team regularly polls customers to find out their favorite items and mental states. This helps the company not only understand what they are buying, but why.