DoorDash makes another move toward grocery with Mercato


DoorDash makes another move toward grocery with Mercato

by Jessica Dumont

Dive Brief:

DoorDash will now offer same-day delivery on grocery orders for e-commerce platform Mercato, according to a press release. Mercato serves about 750 independent grocers and specialty stores in 22 states.

The third-party delivery service will be responsible for a majority of Mercato's grocery deliveries. The companies are offering free delivery on orders within 10 miles of a Mercato partner through Sept. 30.

In addition, Mercato founder and CEO Bobby Brannigan said in a statement that the company will have more news soon related to a delivery subscription offering.

Dive Insight:

With this partnership, Mercato plans to leverage DoorDash's expertise in fulfillment operations and DoorDash is tapping into Mercato's extensive network of specialty and independent retailers. Together, the two said they aim to help smaller, locally owned grocery businesses compete with larger players. 

While e-commerce adoption remains relatively low among consumers, with just 11% of people reporting that they order groceries online monthly, according to Gallup, another survey from Bain & Company and Google suggests there's opportunity for this number to increase. People who are reluctant about ordering groceries online are more apt to try e-commerce if their favorite local grocer or specialty store offers it. This new partnership between Mercato and DoorDash has potential to fill that gap. 

A well-known brand like DoorDash could help Mercato attract customers as it enters new territory, as many consumers are already comfortable ordering restaurant food from the service. Until now, Mercato relied on a "national courier network" for delivery. 

Mercato, which provides the e-commerce platform for its grocery clients and helps with inventory and price management, is also on the rise. The company secured $4 million in new funding in July, which it earmarked for expansion into more markets.

That network will be helpful as DoorDash sets its sights beyond restaurant delivery and inches into the grocery space. In April, the company announced a partnership with Wegmans to deliver prepared foods. DoorDash's website also shows that grocery delivery is available from stores including East Side Grocery in New York City, Pavilions in Los Angeles and Galleria Market in Chicago. It's not clear whether these locations were recently added through its tie-up with Mercato. The meal delivery platform also continues to make strides in its restaurant business, too, with two large acquisitions recently.