DoorDash Bets Big on Convenience
The third-party delivery company looks beyond restaurants and leans into the c-store market for growth.
Feb 01, 2021
NEW YORK—Partnering with convenience retailers like 7-Eleven, Casey’s and Wawa on deliveries helped propel DoorDash’s business in 2020, boosting its market share in the competitive third-party delivery sector, and analysts see plenty more room for the upstart delivery company to grow its share of the U.S. convenience market, the Wall Street Journal reports.
DoorDash now accounts for 58% of U.S. convenience-store spending via third-party delivery apps, more than twice that of rival goPuff, according to an Edison Trends report released last week. Just a year ago, Edison Trends pegged DoorDash’s share at about 5% and goPuff at 70%. Meanwhile, Uber Eats’ market share in third-party convenience goods stands at 8%, according to Edison Trends.
In April 2020, San Francisco-based DoorDash launched a convenience category, powered by partnerships with 7-Eleven, Circle K, Wawa, CVS and more. Now its convenience category includes more than 2,500 convenience stores across more than 1,100 cities nationwide.
DoorDash in August 2020 launched its own digital convenience store—DashMart—with more than 2,500 household essentials, grocery and convenience items and ready-made meals for customers in Chicago; Cincinnati and Columbus, Ohio; Dallas; Minneapolis; Phoenix; Redwood City, Calif.; and Salt Lake City. The dark stores focus on online orders only.
The pandemic accelerated consumers’ move to adopt online ordering, delivery services and curbside pickup, and convenience retailers are rushing to meet the growing demand. Online orders are expected to make up a larger share of c-store transactions well past the pandemic.
Overall online consumer spending at convenience stores expanded almost 350% in 2020, nearly three times faster than online restaurant consumer sales, the Journal reports, citing an Edison Trends analysis. “DoorDash customers increased their convenience-store spending by 162% sequentially from the third to the fourth quarter, according to EdisonTrends’ data,” the Journal reports.
PitchBook senior analyst Asad Hussein, told the Financial Times that DoorDash’s business will continue to accelerate as more convenience-store transactions shift online.
“DoorDash has established a footprint in a very underpenetrated market that has a long runway of growth ahead of it,” Hussein told the Financial Times. “If you’re a consumer, the things that you care about is: No. 1, cost. No. 2 is the speed. And No. 3 is the overall experience. DoorDash is just absolutely nailing it on all three fronts.”
NACS Research last year released its landmark “NACS Last Mile Fulfillment in Convenience Retail” study, outlining the opportunity for convenience retailers to grow sales and expand customer reach as the market evolves. Download it free here.
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