#SFSW15: How Partnerships are Driving the Next Generation of Delivery

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The days of having to go to the grocery store to get your items for tonight’s dinner are becoming a thing of the past as companies continue to jump on the home delivery bandwagon. With heavy hitters like Amazon and Google launching their own home delivery services, will the dream of ubiquitous local delivery come true? Or are the new batch local delivery startups doomed to repeat the mistakes of their dot-com predecessors?

During a session at Street Fight Summit West in San Francisco Tuesday, executives from grocery ordering firm Instacart, food delivery startup DoorDash, and local logistics play Postmates came together to discuss the future of delivery. Each company takes a different approach, but share a similar strategy: joining forces with local and national chains to develop strategies for getting products to customers on time, at low cost, while the customers never have to leave their homes.

Sarah Mastrorocco, Business Development executive at Instacart, said the company, which has been valued at $2 billion, is dependent on local groceries success — not destruction. The company has partnered with a handful of regional and national grocery chains, placing personal shoppers in stores to fulfill orders from the existing aisles.

While Instacart concentrates on groceries, DoorDash, which recently raised $40 million, has found success in a more competitive vertical: restaurants. Shah boasts that “one in three homes” in the San Francisco Bay Area uses their “dashers” to order food. Shah agrees that partnering with merchants will bolster the stability of their company and increase the effectiveness of their services.

Even Postmates, which has grown as a more horizontal delivery network, is dependent on partnerships. Holger Luedorf, SVP Business at Postmates, pointed to a lucrative and impressive partnership with Starbucks as an important milestone as the company has scaled its operations to over 80 cities.

The modes of actual delivery varies between these companies. Postmates and DoorDash use bicycles and motor vehicles to deliver their orders, and Instacart hires drivers to pick up goods from personal shoppers who are stationed throughout the cities they service. All of these firms seem to be on solid ground as transportation becomes increasingly difficult and expensive. It does not appear that their revenues will fall anytime soon.