As part of their ongoing mission to help clients stay ahead of the competition in a fast-paced, constantly evolving marketplace, Mars United Commerce’s Customer Development team closely monitors the strategic activity taking place across all key retailers and channels.
Each month, the teams compile Marketplace Assessment reports on the retailers (Walmart, Target, Amazon, Kroger, Best Buy, Ulta Beauty) and channels (Regional Grocery, C-Store, Drug, Value, Pet, Club, Home Improvement) that are most important to the business success of our clients. The following report outlines noteworthy events across four key retailers from the team’s most recent round of assessments. (To receive copies of the full reports, contact EVP-Customer Development Kandi Arrington at [email protected].)
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This latest round of assessments finds retailers forging or expanding existing partnerships with on-demand delivery platforms. As shoppers continue to lean into same-day delivery and other alternative fulfillment options, these partnerships have become crucial to both retailer and brand success. According to Capital One Shopping Research, “50% of consumers value free same-day delivery more than the option to pick up curbside or in-store.” And with retail giants like Amazon and Walmart already offering same-day and two-day delivery, competitive retailers will need to keep up with the demand for faster convenience.
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Costco Spreads Out with Uber Eats
Costco has significantly expanded its partnership with Uber to make itself available to Uber Eats shoppers across the U.S., Canada, Mexico, and Japan. Extending a deal that began in 2021 with delivery from 25 Costco locations in Texas, the agreement lets non-members of Costco order from the warehouse club through the delivery service’s app. Costco members, meanwhile, earn additional discounts on Uber Eats orders and get 20% off an annual Uber One program membership. The deal helps Uber stay competitive with home-delivery rival Instacart, which has similarly partnered with Costco for the last four years.
Relevance: Accessibility is crucial in today’s competitive market, and by teaming with these third-party delivery services Costco is making itself available to more potential customers. By working through Uber Eats and Instacart, Costco eliminates the need for customers to physically visit a club — or even shell out the $60-per-year membership fee. The partnerships also deliver (pun somewhat intended) a key capability Costco needs as it seeks to build out an ecommerce business that is far behind the industry curve without having to invest heavily on internal infrastructure — a key initiative as the retailer also rolls out a retail media network.
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Food Lion Adds Instacart to Expand Services
Food Lion Home Delivery has expanded services across its entire store footprint through a deal with partner Instacart to cover Georgia, North Carolina and Virginia. The Ahold Delhaize USA-owned retailer now offers pickup or delivery services across more than 90% of the 10 states in which it operates. Area. Food Lion shoppers can link their MVP savings loyalty card to their Instacart account to use digital coupons and redeem their “Shop & Earn” savings.
Relevance: Food Lion has over 1,100 stores throughout the Southeast and Mid-Atlantic. This latest expansion is helping the chain catch up with other grocery retailers in the region that already had home delivery capabilities.
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Meijer Sweeps into Summer with Shipt
Meijer and Shipt celebrated the start of summer with unique savings opportunities supported by a themed sweepstakes and tips for making the most of the season. From May 20 to June 20, customers who ordered from Meijer through Shipt’s app or website were automatically entered to win the “Ultimate Summer Grilling Sweepstakes,” the winner of which received a year’s supply of groceries (in the form of Shipt credits), along with a griddle, utensils, hammock, and burger smasher.
Shipt leveraged the sweeps to help promote its own “Summer of Savings” event, which began on Memorial Day weekend with an offer dangling $10 off orders of $35 or more in grilling essentials such as meat, buns, condiments and chips. Running over six weeks, the seasonal event will offer deals on items like outdoor grilling products, patio and gardening items, and outdoor games in addition to the grilling essentials.
Relevance: Shipt’s purchase data finds that the top products ordered before Memorial Day weekend include such common summer needs as swimwear, towels, sunscreen, grilling tools and cookout-related food — not exactly news as far as seasonal buying trends go, but illustrative of the fact that on-demand shoppers aren’t just ordering for immediate consumption needs (unless they’re heading right out to the beach, perhaps). And the joint sweepstakes with Meijer illustrates a new age of grocery retail in which retailers are teaming with delivery services on mutually beneficial promotions they previously may have conducted with the help of brand partners.
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Ulta, DoorDash Bring Beauty to the Front Door
Ulta Beauty has expanded its partnership with DoorDash to offer on-demand delivery from over 1,350 stores across all 50 states — which represents most of the retailer’s physical locations. The partnership first began in 2021 by offering same-day delivery from select Ulta Beauty stores in major cities such as Atlanta, Boston, Chicago, Los Angeles, Houston, and Boise, Idaho. DoorDash shoppers throughout the U.S. now have access to 600 brands and 25,000 products carried by the beauty retailer.
Relevance: According to a PYMNTS Intelligence/AWS study, 39% of consumers said they were “highly likely” to increase their online purchases of health & beauty products in the coming year. By offering easy delivery through DoorDash across all 50 states, Ulta is fully prepared to tap into that growth.
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Opportunities for Brands
This recent spate of partnerships between retailers and last-mile delivery platforms highlights the growing importance of accessibility and convenience among shoppers, as well as the need for retailers to find lower-cost ways to expand their last-mile services. Working with home delivery operators also expands store footprints beyond their typical boundaries, which can help retailers attract new shoppers while retaining loyalists who might occasionally find themselves in a time crunch that makes a trip to the store inconvenient.
Brands should consider opportunities to highlight delivery services as part of their call to action. For the deal section in delivery apps, they should lock in early with compelling offers that will stand out against the competition and help grow baskets for both the on-demand operator and its retailer partners.
A well-maintained digital shelf strategy is key here, too. It’s important for brands to stay up to date as platforms regularly enhance their functionality, creative capabilities, and user experiences/interfaces. See Mars United’s latest Digital Shelf Report to stay abreast of these changes.
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Mars United Commerce’s Customer Development practice is an unrivaled team of in-market commerce experts who simplify the complexity of retail for our clients. Located in Bentonville, Minneapolis, Cincinnati, Chicago, Tampa and the “backyards” of other key retailers, they provide deep knowledge of the retailer, expertise in key business areas (like strategy, media and creative), and door-opening personal relationships with key executives to deliver an unmatched level of business success for clients across accounts, channels and shopper engagement platforms. For more information, contact EVP-Customer Development Kandi Arrington at [email protected].
