Merchant Innovation

Why Uber Is Retail’s New Secret Weapon

In today’s on-demand economy, consumers want to track deliveries in real time. Now, Uber wants to help make that possible for just about any type of good that can be delivered.

The ride-sharing app is in talks with on-demand businesses to offer delivery services. The company already runs UberEats, its food delivery service that’s currently operational in 9 cities worldwide. Uber also works with retailers, like the Gilt Groupe and jeweler Alexis Bittar, to offer delivery services.

Uber’s logistical efficiency, combined with its wide presence, is perfectly situated to serve this need, especially given the rise in the number and size of “on-demand businesses.”

Delivery services have always been an important part of the eCommerce model. However, as more and more brick-and-mortar retailers and niche online commerce players emerge, the effort and expense involved in setting up delivery services independently appears to far outweigh the benefits of fulfilling such transactions.

Google-backed Uber, whose play now appears to be on-demand services based on data analytics, is well-poised to serve this need. This would also work to better utilize spare capacity and save costs at a time when the service continues to add drivers aggressively. “If the shit hits the fan and burning money on growth is not accepted by investors, you need to save anywhere you can. You’d want to contract with someone that has the economies of scale. Companies like FedEx can buy gas for their planes and get discounts on everything else involved in the process,” an on-demand startup founder was quoted as saying.

But it isn’t an easy market to break into — even for Uber. In the past few years, a number of startups supporting other startups have emerged: Postmates, SpoonRocket, Washio, Sprig, Doughbies, BloomThat, Shyp, DoorDash, Munchery and Instacart, among others.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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