Technical Leader

Brands Owning Their Delivery Channel

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For your brand or business, the times for short term plays and long term plays can get mixed. Being able to do a new offering now, shows speed, quickness, agility, and time to market. All of which are valid characteristics for any business to aspire to, but I hope you do not go into ventures because you can, there is more at risk than just short term increased sales. Please play the long game even if there is pain in the short term.

Many of us are accustomed to using a shipping/delivery provider for things we buy online. Most businesses are not in the transport business, so it makes sense to focus on their differentiating factor and leave the shipping to others. This is obvious where the product is shipped further away from any brick and mortal or where the customer is already going to your digital property (website, app ..etc) to purchase your goods. They are on your platform. They are engaging with your brand. As a Brand Owner, I agree with this, as a customer I am happy to engage with the brands I love.

As Retail Delivery Providers have grown this last decade, I hope brands keep in mind what they are losing when asking their guests/customers to engage on a third party platform. This either removes or makes more difficult the ability to use rewards or loyalty points, the brand loses the ability to market themselves, customers loose due to paying more money, and worst of all the brand trains customers to go somewhere else to get their product. While the customer gets used to this, they will grow to engage with brands on their delivery provider of choice. This will open the gates for these delivery providers to own the experience and remove your business from the transaction.

Often there is not a single event that ruins a company, but do keep in mind how Toys R Us celebrated selling their toys on Amazon. They trained their customers to go elsewhere for their product. Amazon didn’t need them for long. People began to get used to going to Amazon for toys, not Toys R Us anymore. I see the same thing happening to restaurants and delivery providers. As restaurants continue to push customers to Postmates, Grubhub, and UeberEats, the experience will be moved. It will slowly not matter where you get fried rice, hamburgers, or butter chicken from. Postmates will create their own kitchen and offer to sell their food. Thus becoming the largest restaurant chain. I believe it is already happening.

Brands need to take these things seriously and think forward.

I see two options in these scenarios. One is to perform your own delivery. If you own the delivery of your product to customers that are a quick drive away, then invest in your own drivers. Owning the full experience will differentiate your brand amongst the crowd. You will be unique. Customers will notice and they will like it. The other option is to flip how online orders flow. Instead of from the delivery providers site into your business, businesses can continue to own the experience and integrate with each delivery provider. This will require a fair amount of software integration, but this is a strategic move. It will hurt in the short term, but will be significantly better in the long term. It will also allow you to slowly strangle out the delivery provider and your brand to continue to own the experience.

My hope is brands look harder at the last mile to the customer and make a strategic decision on who they want to own that. It’s a new time.