Carrefour is to debut a new delivery service from three stores in Paris, in a trial programme that has been dubbed ‘Carrefour Now’.
The scheme is clearly aimed at combating Amazon Now – the US etail giant’s rapid delivery service, which rolled out in the same city last week.
Although Amazon’s arrival has doubtless prompted this response from Carrefour, it comes as retailers across the globe look to test more rapid home delivery services.
In the UK, for example, Sainsbury’s recently introduced its Chop Chop smartphone app – providing shoppers in Wandsworth access to one-hour deliveries on baskets of up to 20 goods.
In France, Casino-owned C-Discount already operates a 90-minute home delivery service.
Carrefour’s move into one-hour would, therefore, be even faster still than its great rival.
The need for speed
The problem for many retailers is that the growing demand for speed in home delivery fulfilment – which has, in part, been driven by Amazon – has negative consequences for profitability.
Faster home delivery almost invariably entails higher costs. This means retailers need to pass on at least some of this to shoppers or risk diluting online margins further still.
”The need for expensive temperature-controlled delivery vehicles, the employment of drivers and in-store pickers to actually fill the basket for the customer, and the need for short delivery windows, since food products can’t after all be left with a neighbour – the list goes on”
David Gray, Planet Retail
Take traditional food ecommerce, a channel which is set to take a bigger slice of the European grocery market, and profitability issues are plain to see.
The need for expensive temperature-controlled delivery vehicles, the employment of drivers and in-store pickers to actually fill the basket for the customer, and the need for short delivery windows, since food products can’t after all be left with a neighbour – the list goes on.
All this means profitability is an issue and will become even more so if retailers are required to offer more rapid delivery services.
This demand is set to become a bigger, rather than a smaller, problem for the industry.
Our view is that Carrefour’s move is more reactive than proactive and that the retailer does not envision one-hour delivery as playing a major part in its online strategy going forward, except, perhaps, as a very premium addition to its ecommerce offer.
- David Gray is a senior retail analyst in grocery at Planet Retail