3 ms·
That sounds good on paper but doesn’t work in reality. To deliver products quickly, you need inventory close at hand, aka “dark stores”. To justify the massive
by spaceman_2020 4y ago
That sounds good on paper but doesn’t work in reality.
To deliver products quickly, you need inventory close at hand, aka “dark stores”. To justify the massive upfront investment in dark stores, you need either need massive volume, or you need high average order value.
Massive volume doesn’t work because rapid delivery is niche and delivery fees means that people can’t use them as frequently. Plus, dark stores simply can’t carry enough inventory to do large volumes.
The only option is to increase the average order size. But because dark stores carry limited inventory, you can’t upsell much.
- Ekaros 4y agoNot to forget that you need also quite substantial inventory. The stuff might not be perishable, but still you need to tie up capital in it. And you can't have too little either when there is demand spikes you can't fulfil orders or customers won't come back when you can't supply stuff.
- spaceman_2020 4y agoAlso a tough marketing pitch - if you emphasize "rapid" delivery, and you can't deliver in those 15-20 minutes, you'll leave customers dissatisfied. If you offer them the more realistic 30-45 minutes, you'll leave customers wondering why they're paying you the premium. Especially in situations where you absolutely need something delivered immediately, the difference between 15-20 and 40-45 minutes is enormous.