Déjà Vu? Uber Introduces Home Delivery Service
Yesterday, Uber introduced the Corner Store, a same-day home delivery service. The personal ride-share company is enabling mobile app users to order household items (e.g., medicine, toiletries) and have a driver bring them directly to their doorstep. The service differs from current home delivery offerings because it includes the delivery fee within the price of the item. The local-delivery service is only currently available in Washington, D.C., however, Uber states on its website, "the more you love it, the more likely it will last."
"But of course! Why haven't retailers and tech startups thought of this before? What a novel idea! Not to mention how cost effective it is!" said no one.
Let me clarify by saying I'm an avid Uber user. The service is smart, easy to use and right up a city dweller's alley. With that said, I firmly believe Uber confused a smart marketing technique with a sustainable business plan.
Uber has successfully created relationships with many companies to help create awareness, expand its business and provide memorable customer experiences. Some examples include partnering with Quirky to deliver air conditioning units, teaming with Home Depot to deliver Christmas trees, and the popular #IceCreamDay — and that's just this year. It's no secret that Uber's strong marketing strategy and execution is a large part of its success. It's also a reason why investors contributed nearly $1.2 billion in funding to the company this past June. But why is a startup following suit in an area notorious for retail failure?
On-demand services have flooded the market this past year. Within six months, services such as eBay now, Google Shopping Express, Wal-Mart same-day delivery and Amazon same-day delivery have started to fizzle out. The cost of same-day delivery is a serious drain of resources for retailers.
Jeff Bercovici, writer for Forbes, makes an excellent point, stating retailers like Amazon "can afford to treat products like groceries as loss leaders for their core offerings, while Wal-Mart has an extensive retail footprint that doubles as a distribution network — a network that's increasingly distributed with the megachain's expansion into neighborhood and convenience stores." However, for a startup with newfound success, it might not be the smartest strategy.
"Investors are stuck wondering whether this is 2000 all over again, or whether this new breed of delivery startups can succeed where the last crop so famously failed," writes Claire Cain Miller of The New York Times.
While Uber may be treading lightly by making this venture a trial period, I can't help but feel a sense of déjà vu. Who knows, maybe it'll be the premier way for home delivery, maybe history won't repeat itself like many years past. Or maybe, just maybe, people will stick to the old-fashion way of picking up Band-Aids — running out to the store.
What are your thoughts on Uber's expansion into home delivery? Let us know in the comments section below.