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Mobile technology spurs on-demand deliveries to consumers at home

Drizly delivery driver Jeryl Cole Sr., left, of Patterson Park, delivers alcoholic beverages to Bonnie McCurry, 24, of Federal Hill, on Thursday, Aug. 27, 2015. Drizly is a beer, wine and liquor delivery service that operates in Baltimore and other U.S. cities.
Drizly delivery driver Jeryl Cole Sr., left, of Patterson Park, delivers alcoholic beverages to Bonnie McCurry, 24, of Federal Hill, on Thursday, Aug. 27, 2015. Drizly is a beer, wine and liquor delivery service that operates in Baltimore and other U.S. cities. (Steve Ruark / BALTIMORE SUN)

Bonnie McCurry just wants to relax after work. The 24-year-old tech designer at Under Armour might pick up groceries on her way to her Federal Hill home but then can avoid another stop for beer or wine by ordering on her iPhone using the Drizly app, which promises delivery within an hour.

The last thing Curtis Rhoades wants to do after working all day is to fight traffic to stock up on trash bags and other household goods, so the 29-year-old Union Square resident orders such things from Amazon for delivery within two hours.

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"I'm the kind of person, if I buy something, I want it then. I don't like waiting around for things," said Rhoades, a commercial electrician and part-time musician. "By the time I get off work and have time to do that stuff, it's rush hour and I don't feel like dealing with it. I'd rather pay someone than go to Wal-Mart."

Once the realm of pizzas and mail-order sweaters from L.L. Bean, home delivery is not what it used to be. Today an ever growing array of products can be delivered to doorsteps in an hour or even less as time-starved consumers skip stores and order online or from their smartphones. The services are growing quickly and even more explosive growth is likely, experts say, thanks to improvements in mobile technology and changing preferences of consumers, who want merchants to meet them on their own terms.

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"Ten years ago, we were fascinated that we could order from Amazon and get it in two days or three days," said Phil Lempert, a food industry analyst and editor of SupermarketGuru.com. "We've now become accustomed to an hour. We see something, and we want it delivered now. We're an immediate-gratification society."

Demand is being driven by mobile technology that's made it simpler to order online and by the buying power of millennial shoppers, Lempert said.

Members of Generation Y "don't have the same feeling about brick-and-mortar [stores] as Gen X or baby boomers," he said. "They're used to ordering things 24 hours a day and getting things 24 hours a day. … They're the ones fueling this growth."

Businesses are scrambling to meet the demand, offering to deliver more goods to customers' homes faster than ever before.

The industry giant Amazon, which has offered its Prime customers two-day delivery for several years, launched its one- and two-hour Prime Now service last year in New York City and earlier this year in many Baltimore neighborhoods. Its Amazon Fresh service delivers groceries in a growing number of markets, and last week the company said it will begin delivering wine, beer and spirits, starting in Seattle.

Companies such as OrderUp and GrubHub offer to deliver meals from a wide variety of restaurants that don't offer their own delivery services. Founded in Baltimore six years ago, the app-based OrderUp is being acquired by Groupon Inc. in a deal worth a minimum of $69 million.

Investors have poured money into the car service Uber, betting that the mobile app-based service will expand from transporting people to delivering goods to them. The company already is experimenting. It offers UberEATS, an on-demand, cashless service that partners with restaurants to deliver meals curbside in 10 minutes or less, in Washington and seven other cities.

The company also tested a service called UberEssentials in Washington and found "people loved the convenience of using the Uber platform to get their everyday household products on demand," said spokesman Taylor Bennett. "We're already taking our learnings and using them to determine what's next."

Sales of groceries online, both for delivery and pickup, are booming. U.S. online grocery sales have grown at an average annual rate of 14.1 percent since the recession to nearly $11 billion last year, according to an IBISWorld industry report. The research firm projects growth of nearly 10 percent a year through 2019, especially as lower unemployment translates to less free time for shopping.

Amid heightened demand for Internet-based delivery services, major companies such as Amazon and Wal-Mart are scaling up operations, while a new groups of online grocers, such as Relay Foods and Door to Door Organics, are targeting niche markets, the report said.

Target plans to test grocery delivery and expects to announce details soon, a spokeswoman said.

Meanwhile, new services that deliver fresh ingredients for quickly whipping up meals are cropping up, including Blue Apron and HelloFresh, both available in Maryland.

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That idea is also being tested by Peapod, the Chicago-based grocery delivery pioneer that is owned by the Dutch parent of Giant Food.

Peapod has evolved along with technology over the past 25 years. Established in 1990, it gave customers special software and dial-up modems at first. This summer, Peapod redesigned its mobile and tablet apps with features such as search engine recommendations and ways to filter for allergies, sodium content, calories and ingredients and sort by price.

"It's a very exciting time to be an online grocer," said Carrie Bienkowski, Peapod's chief marketing officer, who said the company's double-digit growth is driven by three things: convenience, technology and personalization. "People love the flexibility of 24-hour shopping. … Smartphones are no longer a luxury item, and that's what's powering this."

A third of all Peapod orders come exclusively from a mobile device, she said. The service charges between $7.95 and $9.95 for delivery, depending on the size of the order.

Though grocery deliver has been around a while, only about 10 percent of grocers offer it, and the field remains a huge growth opportunity, Lempert said.

"Within five years, it will be 99.9 percent," Lempert predicted, "because the customer wants it."

He said he is closely watching growth of new business models such as Instacart, a fast-growing app through which shoppers can order from a range of grocery stores and expect deliveries in an hour. The company operates no warehouses of its own.

In Maryland, shoppers in suburban Washington areas such as Bethesda, Chevy Chase, Silver Spring, Gaithersburg and Rockville can put together Instacart orders from stores including Whole Foods Market, Costco, Harris Teeter, Safeway and Petco.

"It basically says, 'No matter who you are, what kind of food you want and where you prefer to shop, we're here for you,'" Lempert said. "It seems to really fill a void. If we look at the future of the supermarket, we're going to see smaller stores. … The consumer, led by the millennial generation, is saying, 'We want things curated for us.'"

Founded three years ago, the booze delivery service Drizly has expanded from a single city to 17 cities today. Baltimore, where Drizly has offered service since February, is one of its fastest-growing markets, said Cory Rellas, one of its three founders and chief operating officer.

The company created a mobile app that lets customers see in-stock inventory and order from one of about 200 partner retail stores, including three in Baltimore. Its software, licensed to the stores, also manages orders and ID verification.

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"It's about bringing technology and tools to smaller retailers to allow delivery efficiently, profitably and safely," Rellas said.

He described the typical customer as tech-savvy and ranging in age from 26 to 35. Demand will only grow, Rellas believes.

"We are in the middle of a shift" driven by mobile technology, and Drizly "is playing into how much time people spend on their phones," he said. "E-commerce is part of our lifestyle. Our experience is the trend is only accelerating."

McCurry said she calls on the Drizly service about once a month. She also orders groceries from Relay Foods and sometimes meals from GrubHub and OrderUp.

When she first heard about Drizly last fall, "I thought it was an amazing idea — the idea of getting alcohol delivered to your house in less than an hour," she said. "There's nothing better than that when you come home after a long day and want a drink or a beer but don't have anything on hand. When I order, I like to stock up."

For a flat $5 delivery fee, and no markup on the alcohol, she said, "it's definitely worth me not having to get in the car and make that trip."

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