Supply Chain Shakeup   //   June 12, 2024

GNC is launching same-day delivery via Uber Eats in a bid to capture more online orders

Nutrition and supplements retailer GNC has joined the Uber Eats marketplace, allowing it to provide same-day delivery in all 50 states as it seeks to gain an edge in the competitive nutrition and supplement space.

GNC, a Pittsburgh-based company founded in 1935, will offer same-day delivery both from the Uber Eats app as well as for orders placed on CEO Michael Costello told Modern Retail that the company sees delivery as a potential driver of future growth. Some people may not want to lug a five-pound can of protein powder around when they’re out running errands, he said. And despite a footprint of 2,400 stores, Costello said many of GNC’s customers prefer delivery.

“We’re trying to remove that friction for the consumer so it’s convenient for them to interact with us,” he said.

The move underscores how brands of all ages and sizes are looking to navigate last-mile delivery challenges. Customer expectations around delivery speed and reliability have become a top priority. A 2022 retail survey commissioned by UPS Capital found nearly six in 10 businesses say offering last-mile or same-day delivery flexibility is critical to remain competitive. And about half said they were working with more last-mile or same-day carriers as they were two to three years ago. 

The announcement comes as GNC continues to try to re-position itself after filing for bankruptcy in mid-2020 and closing 1,200 stores. At that point, online sales boomed and became a greater focus for the brand. In response, over the past few years, GNC has sought to invest in more delivery and fulfillment technology, including updating point-of-sale systems that enable in-store customers to place online orders. Customers who order online and opt to pick up in-store can receive a 10% discount. It also recently launched on TikTok Shop.

While nutrition and wellness are booming categories, GNC hasn’t necessarily benefited. Yet Costello pointed out how the company has more product offerings and flavors than a big-box store, so it can offer more to nutrition-obsessed shoppers. “The categories we’re in continue to grow,” Costello said. “We’re not growing at the category rate. But that is why you’re seeing us put a lot of initiatives in place, to really make sure we solve for the convenience [factor].”

Costello, a former Clorox executive who joined GNC in November, wouldn’t share GNC’s financial performance for 2023 or how much of an audience it expects to get from joining Uber Eats. But he said many customers will prefer the convenience of ordering their nutrition products versus going into a shop. “We have targets, but it’s less about targets than the customers’ journey,” he said. “If we think about the modern consumer they’re all about convenience.”

Part of the reason that GNC opted to partner with Uber Eats over other delivery operations is because they are both national companies that operate in a variety of market sizes. “If you go to Wichita, Kansas, you’ll find us both there,” he said.

For Uber, diversifying the products in its Uber Eats marketplace beyond the typical restaurant fare is a key growth strategy. As of this year, it partners with more than 100,000 non-restaurant merchants. But during last month’s first quarter earnings call, Uber CEO Dara Khosrowshahi indicated that the company has a goal of growing its delivery service in suburban markets, which includes a diversity of products. “It’s in the basics, right?” he said in response to a question from a JP Morgan analyst. “Building an audience and a brand, increasing selection, making sure we’ve got pricing right and making sure the quality of the service continues to be high.”

An Uber spokesperson told Modern Retail that its grocery and retail offerings generated $7 billion in revenue during the fourth quarter of 2023, with the segment growing 40% year-over-year on a constant currency basis. About 14% of delivery users are making grocery or retail orders, a figure Uber expects to increase as it grows its offerings. GNC says it’s the first exclusive wellness-focused brand to sell on the marketplace.

But there is a level of scrutiny that comes into play before brands are featured on the app. Beryl Sanders, director of U.S. grocery and retail partnerships at Uber, told Modern Retail that early conversations focus on whether it will be a mutually beneficial partnership, as far as growing the brand’s sales while diversifying the Uber Eats offerings. Then, it comes down to whether or not the brand’s products merit on-demand delivery.

“What we think about is: ‘What does the customer need now?’ That is really what we think about in terms of other verticals,” she said.

Once a brand is onboarded, Sanders said Uber looks at not only how sales are performing but reliability. That’s especially true for brands like GNC that are also using Uber Direct to power same-day orders from their website. Some customers will prefer to order from a brand’s website rather than the Uber app, and Sanders said metrics like delivery speed and order accuracy can help the company learn how it’s going.

“We’re really hyper-focused at Uber Eats on ‘go anywhere and get anything,” she said, “and making sure our customers can order quite literally anything.”

Dan Spitale, vp of commercial sale and enable at UPS Capital, said that store closures during the start of the Covid-19 pandemic changed how retailers use delivery services. Combined with the expectations of fast delivery set by Amazon, ensuring fast and error-free logistics is becoming a top priority. 

“It went from a convenient nice-to-have to a need-to-have,  where it’s table stakes or ‘I won’t buy from you,'” he said.

In the case of GNC, Spitale — who was a regional leader for the company in the late 90s — said that same-day delivery could give the brand an edge.  While there’s no shortage of DTC supplement brands and nutrition companies out there, few will have the 2,400-store footprint of GNC to fill orders from. 

“From a performance perspective, at least as it exists today, that does provide GNC with a competitive advantage in the space,” he said.