Member Exclusive   //   January 4, 2024

Research Briefing: DoorDash’s expansion plans bring a renewed focus on fulfillment strategies

By Li Lu

In this edition of the weekly research briefing, we examine brands’ fulfillment strategies in light of DoorDash’s plans to expand outside of the U.S., as seen in data from Modern Retail+ Research.

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As fulfillment options grow more complex, brands hone their strategies

Breaking News: In a recent interview with the Financial Times, DoorDash’s CEO Tony Xu said that the company would be making efforts to expand its restaurant delivery service beyond the U.S. This announcement comes after DoorDash’s acquisition of Wolt, a Finnish delivery service with a presence in 27 countries. As DoorDash continues to expand outward, Modern Retail+ Research examined how brands are adjusting their fulfillment strategies to keep up with customers’ expectations. 

Questions: What fulfillment options matter most to customers? Where are brands investing? 

Answers From Research:

In a July 2022 Modern Retail survey, nearly two-thirds (63%) of brand executive respondents said they were investing in new technologies and capabilities to combat supply chain delays. Those supply chain concerns reached a peak for some companies in late 2022 during the holiday shopping season, a time of year many retailers rely on to make the bulk of their revenue. Evan Moskal, co-founder of Courant, a wireless charging brand specializing in home and office tech accessories, said it takes the company’s team all year to plan for the onslaught of holiday sales, especially amid supply chain strains during the past couple of years.

And a slammed supply chain is only one of the challenges retailers face. With customers growing more accustomed to ordering online during Covid-related lockdowns, shoppers have also come to expect more streamlined and fast delivery. According to a 2022 shipping report from X Delivery and the Retail Management Institute of Santa Clara University, 62% of consumers expect orders to be delivered in under three business days. In the same report, 56% of abandoned carts were attributed to fulfillment concerns. Clearly, fast fulfillment matters to consumers.

As a result, fulfillment is top of mind for retailers. Due to the cost and time needed to revamp entire fulfillment strategies, many retailers have started working with any and all available third-party vendors to build out additional fulfillment options and keep up with customer expectations. Dollar Tree, Dick’s Sporting Goods and Sephora, for instance, partnered with DoorDash to deliver products — unusual pairings for a food delivery service. Shanna Prevé, DoorDash’s vp of partnerships said, “New verticals are growing faster than even our core business. So we’re investing a lot there, and we’re seeing great results with our consumers.”

Want to learn more: Modern Retail+ Research’s Index on fulfillment strategies examines how different retailers are investing in fulfillment options.


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