Coles has partnered with ride sharing company Uber to help tackle home deliveries, as experts suggest Australia’s grocery sector should turn away from price wars and start focusing on “delivery wars” instead.
Fairfax reports the supermarket has begun a small-scale trial of grocery home delivery with Uber out of its “dark” store in Richmond, which will run from August into September.
Uber drivers will reportedly work alongside Coles’ already existing network of delivery drivers to provide customers the service, with shoppres reportedly receiving emails showing their delivery is on the way via UberRUSH.
UberRUSH is the company’s courier service that operates in a number of countries and launched into Australia as a trial in late 2015. It is advertised on Uber’s website as an “on-demand delivery network that makes getting things in your city more convenient, affordable, and reliable than picking it up yourself”.
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It’s unknown how many UberRUSH drivers operate in Australia, and Australian businesses are unable to sign-up on the company’s website for the service. On the company website’s FAQs, it states the service is only available in the New York City Area, San Francisco and Chicago.
In a statement provided to SmartCompany, an Uber spokesperson said there are “no current plans for a broader roll-out or extension of the trial”.
“We’re currently working with Coles on a trial at one of its stores, to offer customers who are missing items from their online order the opportunity to request same day redelivery via an Uber delivery-partner,” the spokesperson said.
A Coles spokesperson told SmartCompany the retailer is conducting a “short and limited trial using Uber for delivery of items that may have been left out or need replacing from Coles Online orders”.
“The trial began earlier this month and is scheduled to conclude in September,” the spokesperson said.
The online delivery game for groceries in Australia is expected to heat up over the next 12 months, with Amazon rumoured to be including its delivery service Amazon Fresh with its local launch. Aldi has recently trialled home delivery in the US, which has also prompted speculation as to if it could roll out a similar offering here.
Meanwhile, smaller startup players have continued to thrive, with YourGrocer recently expanding its delivery to more Melbourne suburbs after raising $1.3 million in funding.
Partnership “a step in the right direction”
Coles’ move has been met with resounding support from retail experts, with senior strategist at Retail Oasis Trent Rigby telling SmartCompany this model could help the retailer in “numerous” ways.
“The main thing this achieves is solving the ‘last mile’ problem many larger retailers face. Delivery logistics are pretty structured, so UberRUSH allows them to be more agile and enhance customer’s experience,” Rigby says.
“It’s definitely a good start, and looking at what Amazon is doing overseas — they’re pushing quite aggressively into grocery and if they bring that here it will be a game changer.”
Retail expert and Queensland’s University of Technology lecturer Gary Mortimer agrees, saying this kind of trial is “absolutely” the right move for Coles, as “speed is the new currency for retailers”.
“The challenge all retailers have globally is getting products to customers in the fastest and most efficient time, so they’re all focused on compressing time,” Mortimer told SmartCompany.
“It’s a move away from price wars to delivery wars.”
While a partnership with Uber is unlikely to replace Coles’ vast nationwide delivery service, Rigby believes it’s a move that plays to millennial shoppers and white collar workers and can see “a lot of growth” to be had in the online grocery space.
“White collar workers don’t have time to do the weekly shop so they want something convenient and quick, and if you’re looking at younger generations they’re less likely to own cars,” he says.
“It definitely doesn’t replace traditional delivery but it’s a step in the right direction.”