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The New Norm Delivery Value Proposition: Trust, Availability and Product Selection


Before Covid, the delivery space was all about cost, convenience, and speed. These were the make of a successful product-market fit, especially for delivery marketplaces. However, times have changed, and with the consumer value proposition shifting due to today’s e-comm trends, the delivery market is now valued on trust, availability, and product selection.

What do I mean?
Trust = branded, safe contactless deliveries
Availability = a network to deliver the goods when promised
Product selection = access to a wide array of products and services

The recent GrubHub and Postmates deals are reflective of a rapidly changing market that needs to deliver on this new value proposition quickly to gain market share and stay competitive. For instance, the Postmate Uber consolidation is a good move for Uber. The deal helps them dominate the markets and improve service levels while increasing product coverage to meet the growing demand.

But how do these moves fare for brands and other crowdsource delivery players already challenged to survive and fight the big players efficiently? Delivery marketplaces already eat at the brands’ costs, cutting margins (already tight in the food industry). With fewer competition costs will be driven even higher.

And what about an open logistics network of fair players? Brands win when they have a diversity of supply players and are not locked into a couple of leaders (I mean wasn’t that the beauty of these marketplaces when they first emerged). I see this fall out in a greater reliance on a limited pool of options.

Traditionally, once brands cross a threshold of delivery vs instore volumes, working with third-party delivery operators becomes more of a risk than reward. While the initial new business-driven from marketplaces and third party delivery is incrementally profitable, at some point the tables turn. Restaurants, for instance, who have experienced a swing in off-premise dining vs in house, are now questioning the business model. And with only three major players, the threat will become more apparent.

However, there is an opportunity here that emerges from the consolidation. For example, autonomous vehicles, drones, internal fleets, and delivery platforms that aggregate smaller fleets can come together to serve the market demand in an efficient, cost-effective, trustworthy way.

Delivery fleets can focus on specialization, becoming the best solution in one segment vs trying to win it all. That builds trust. Aren’t you more confident purchasing your furniture from, and having it assembled by an Ikea expert, rather than having it dropped at your door by an unfamiliar third party rep (who may or may not know how to put it together)? It’s the same idea. Brands and delivery fleets can build exceptional customer experiences and specialized fulfillment models when they own the process, from purchase through the last mile.

With a connected, open delivery network offering personalized, fast, specialized delivery, all brands gain the speed and product selection that was the initial purpose of marketplaces but with the added advantage of owning the customer experience. It’s not Uber or Amazon that the brand has to fit into, it’s a delivery network tailored to the brand. That’s how brands will reposition to the new value prop of trust, availability, and product selection. That’s how brands will gain market share.

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