Perhaps faster delivery times were a bad choice from an economic perspective – Marketingwithanoy

In every startup cycle, there are efforts to get consumer goods faster than ever before, in hopes that technology has improved to make such deliveries financially possible. Notorious dot-com-era flameouts are now ancient history, but they do indicate how long founders and their backing investors have been working on the concept.

The dream of super fast deliveries to consumers has never gone away. During the rise of Uber, a number of startups tried to build businesses focused on fast food delivery, using precooked food and a supply of drivers in urban areas to deliver the food. Unfortunately, SpoonRocket and Sprig did not survive.

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Instacart was a big deal, targeting one-hour grocery delivery, a model it expanded to include next-day delivery and the like. Some major platforms are tinkering with hourly deliveries and absorbing costs to work on the idea of ​​even faster customer service.

Startups have also hammered the idea in recent years, relying on so-called dark stores — more or less mini-warehouses — to deliver a local supply of goods that can be delivered to consumers’ doors in record time. For example, GoPuff has raised a tectonic amount of capital, as have numerous other startups around the world. The model, called quick commerce, or q-commerce for short, has attracted billions of dollars in funding in recent years.

And just like in previous cycles, it falls apart. This is not to say that every business in today’s q-commerce market will fail; GoPuff has big supporters and despite some problems it can make it to its model. But again, we see startups that have raised huge sums of money to build super-fast delivery models for consumers, laying off staff, trying to merge and otherwise staying alive after consuming mountains of cash.

Who could have seen this coming?

Fast is expensive, slow is cheap

It’s not hard to see why q-commerce caught the attention of founders and investors alike. Uber Eats helped maintain the parent company’s gross trading volume during COVID, when demand for taxi services declined. And DoorDash has grown like a proverbial weed in recent years, leading to a mega IPO and a stock price that hit $257 at the end of 2021.

Consumers wanted deliveries, and they wanted them fast, and companies that were in that game did well. So why not try the same model, but even faster† Wouldn’t consumers love that? even more† As long as you had in mind a model that could at least shake the math on paper – thanks, dark shops! – it was on the way to the races.

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