Americans are willing to buy a lot of things online, from clothes to mattresses to electronics to vitamins.
But groceries have been a challenging space. Just 3% of Americans ordered groceries online for weekly pickup or delivery in 2019, according to a Gallup poll. Consumers, it seemed, still preferred to choose their own perishables, and overly precocious startup attempts during the dot-com bubble may have stunted development in the space. (Per Reid Hoffman’s book, Blitzscaling: “Webvan’s notorious failure kept most players out of the grocery delivery space for over a decade.”)
Now, though, in a turn of events no one could have predicted, Americans are stuck at home and wary of human contact and turning to online grocery delivery in droves.
On Monday, Instacart, which delivers groceries from the likes of Costco or Kroger, said it would hire 300,000 full-time shoppers over the next three months to meet rising demand. Amazon, which owns Whole Foods, said it would onboard some 100,000 more employees in warehouse and delivery positions over the entire business. Target-backed Shipt is seeking thousands too.
The best ideas are born out of recession, venture capitalists say. Now the question is, which grocery delivery companies will, well, deliver the services needed to convert customers and keep their employees when all this is over? Unable to handle demand, Amazon Prime Pantry temporarily closed last week. Grocery delivery business Peapod also crashed for some parts of the country on Friday. Walmart meanwhile limited its delivery window to two days rather than the typical seven.
So is this a turning point for the grocery delivery market, or is it a symptom of coronavirus?
It’ll depend on whether companies can handle the strain.
On a not-coronavirus-related note: SoftBank. The Japanese telecom giant will sell as much as $41 billion in assets in a bid to buyback shares and reduce debts, after its venture capital strategy met heavy scrutiny last year. As part of the deal, SoftBank is planning to offload roughly $14 billion of its crown jewel stake in Chinese e-commerce giant Alibaba, Bloomberg reports.
But don’t worry—its 300-year vision isn’t dead yet. SoftBank is said to be finalizing a $300 million investment in the autonomous driving unit of Chinese ride-sharing company and existing investment, Didi Chuxing, per The Information.