How does grocery delivery startup Cornershop earn money?
Digitization has proved to be magical in a lot of ways. We no longer need to go shopping, book tickets in a queue, or walk out for groceries. Numerous businesses have undergone a digital transformation and this change has been quite eventful. Moreover, the same can be said about groceries.
As of now, Statista suggests that 25% of consumers buy groceries online and for this purpose they use their smartphones or tablets for preparing shopping lists, search discounts, compare prices & place online orders for groceries. Idea Usher experts hereby bring you an interesting insight on grocery delivery startup- Cornershop and more.
Online Grocery app
Presently, the grocery market, especially the retail sector is on the edge of digitalization. It’s exciting to know that the market shares are now being divided among the ones who accomplished the implementation of the latest technologies and hence offer better customer service and the ones who didn’t.
There are many benefits of developing a grocery shopping app. One example is that your customers won’t just remember your app only when they run out of groceries, but it will also remind your customers when they will use their mobile devices. Owing to the efficiency and high productivity of grocery shopping apps among users, prominent grocery stores like Cornershop, Kroger, Aldi & Walmart have already succeeded in taking their sales to a next level.
Now, before we move on to the business model and revenue generation of Cornershop, let’s quickly take a look at what this app offers.
What makes Cornershop exceptional?
Cornershop is a quick and convenient platform to do your grocery shopping online. Enjoy delivery on demand for less than 90 minutes or scheduled on your terms.
It allows you to buy from your local convenience stores or your city’s exclusive retail stores, from pet stores and gourmet items to electronics, bakeries, and more.
Currently, Cornershop is only operating in the United States.
Cornershop allows its customers a wide range of services. But noticeably, it allows users to:
- Choose to buy online from your local grocery stores and listed shops
- Bring food to your door within 90 minutes or allow a delivery time that suits you best.
- Repeat previous orders rapidly to make grocery shopping more convenient for you.
- Multi-store checkout
- Ask/Invite families or friends to swap lists, hence the needs of all are satisfied.
- Completely contact-less deliveries, especially in critical times of COVID
- Provides special periodic deals/offers on shopping
- Offers sustainable bags for buying with groceries.
Business Models of grocery delivery startups like Cornershop
Here are a few ways through which your hyperlocal grocery business can generate revenue:
- Subscription — The primary and most significant revenue stream for an online grocery platform. For instance, you can charge a monthly or yearly subscription (membership) fee from the retailers while adding up the profit margin.
- Delivery Fee — Similar to other grocery marketplaces, you can also charge a delivery fee for each order from the customer. Moreover, the delivery charges can fluctuate as per the subscription plans and the terms and conditions.
- Advertising — Your organization can also earn by advertising various relevant brands and their products on your grocery marketplace. These brands will pay you for showing their advertisements on your website/app.
- Featured Listing: An online grocery platform can offer a large variety of grocery products and vendors. Therefore, sellers who want their products to stand out can simply pay to make their products/brand appear in the featured section of the marketplace platform.
The Big News — Uber acquires Cornershop
Uber is doubling down on its strategy of “deliver anything” and is in the process of vastly expanding its grocery delivery business. In July 2020, the company announced the complete acquisition of Cornershop, an on-demand grocery delivery platform that earlier operated in Latin America and Canada. (Uber previously owned around 47% stakes of Cornershop)
Why did Uber acquire Cornershop?
There are multiple reasons for the acquisition of Cornershop by Uber:
1. Rapid growth in grocery delivery business
Online grocery platforms have grown exponentially since 2017. The ease of use, convenience, and cost benefits are the most attractive aspects for the users.
2. COVID-19 Pandemic
As we are going through the worst pandemic in human history, online shopping, working, learning and food ordering became a new norm. Hence, Uber invested massively in food delivery as well as grocery delivery sectors.
3. Low demand for Uber’s primary services
The pandemic forced lockdowns in the entire world. This made staying at home and not going out a necessity, hence the majority of cab/taxi businesses faced a crisis. Uber, being the biggest among them, had to find a way through.
Wrapping Up
Online grocery delivery has witnessed tremendous response in the last few years. Especially during the pandemic when people were forced to stay indoors and maintain social distance for their safety, online shopping became a norm. Looking at the growing demand and exceptional presence of Cornershop across the serving regions, Uber decided to acquire it.
