Subscription Plans for Supermarket Delivery?

Amazon announces expansion in food delivery.  Uber Eats expands to 7 a.m. to 1 a.m. and tests deliveries from farmers' markets. Silicon Valley is hot on food delivery and plowing tons of VC dollars into startups like Munchery, which introduced its subscription dining plan for $8.95 per month, or $85 per year, in exchange for a 15 percent to 20 percent discount on entrees.  Postmates' subscription plan is charging customers $10 per month to bypass delivery fees on orders of $30 or more from partnered restaurants. And Sprig charges the same $10 per month to bypass delivery fees.

So is a subscription plan the way to go for supermarket delivery?  The subscription model helps drive customer loyalty and encourages use of a platform instead of turning to competitors.  And what about mobile? 

Starbucks turned to mobile order-ahead apps to extract higher sales, intensify customer loyalty and heighten foot traffic. It worked. Taco Bell sees 30 percent higher average order values on mobile compared with in-store, and Starbucks' Mobile Order & Pay already represents 10 percent of total transactions at high-volume stores, directly contributing to increased company sales.

Mobile order-ahead is still in its early days, and supermarkets haven’t even put their toe in the water, except those using Instacart, but that leads to more retailer agnosticism.  

Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed mobile order-ahead report that profiles the companies that have proved the mobile order-ahead concept and analyzes the trends contributing to this new industry's growth.

One key takeaway:  Mobile order-ahead apps — platforms that enable consumers to remotely purchase menu items for in-store restaurant pickup — are on the rise among quick-service restaurants. Bakker expects sales on these platforms to reach $38 billion by 2020, representing a five-year compound annual growth rate  of 57 percent.

It’s time for supermarkets to realize that both the subscription model and order-ahead platforms have places in the aisles.

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