November 7, 2022

2 minute read


There’s a great deal of pessimism in the eGrocery industry.


Investors went from risk-on to risk-off, challenging not just the growth potential but the survival of many firms that just a year or two earlier were darlings of the industry.


Quick commerce firms shut down, IPOs were delayed, international markets were closed.


But just as the pendulum swung too far on the optimism side at peak pandemic (e.g., “Everyone’s going to buy all their groceries online”), so too has the industry gone too far with its pessimistic outlook (e.g., “Digital has fallen off a cliff”).


The three-part series this week will explore omni-enablers – companies like Instacart, DoorDash, Uber Eats, Shipt, and Grubhub – and why brands should make them a key part of their digital growth plan even if they’re currently out of favor. 


This is a great series for CPG leaders that might have their toe in the water on omni-enablers but want to hear the case for going bigger.

  • Part 1: The Analogy to Amazon’s Marketplace
  • Part 2: Assessing 3 Common Critiques
  • Part 3: Urgency and Risk-Reward Considerations

The Analogy to Amazon’s Marketplace


In 2015, consumer brands were hesitant to sell on Amazon.


Amazon was…

  • Small
  • Competitive
  • Disrupted pricing
  • Difficult to work with
  • Different to work with
  • Didn't highlight the brand
  • Didn't care about the brand


Brands felt they had a choice of whether to sell on Amazon.

I told all of them, "You have no choice, you're already selling there. You just let others do it for you."


How was this possible they responded, tilting their heads?


The marketplace, of course. 3P sellers sourced product from wherever, oftentimes directly from the brand, and listed on the marketplace for a wide range of prices. Content was often poor, these sellers may or may not have had sophisticated strategies to win search (leading to the brand losing share), and management had little to no visibility on the trajectory of the account.


This meant that while a brand might not want to be on Amazon for fears, perceived or real, it wasn’t lucky enough to have that choice.


Once a company accepted that reality, the conversation shifted to, "okay, if we're selling on Amazon, we want to control it and we want to maximize the opportunity".


Omni-enablers are similar.


  • Hesitant to over-invest: CPG brands were quick to prioritize Instacart at the start of the pandemic. But as financial markets have turned risk off, many brands are increasingly doubting Instacart’s long-term viability and have been slow to prioritize Uber Eats and DoorDash, both of which have added grocery and convenience channels to their offerings.


  • Feeling like it’s a choice: Instead of a marketplace enabling sales of a product without an active strategy, physical stores enable this. Since omni-enablers pull from stores, a brand's product found on an Albertsons' shelf will also show up on Uber Eats app


Skeptics might say things like, "But we don't sell on Uber Eats app" or "We don't focus on Uber Eats" or “Omni-enabler models aren’t viable long-term.”


Okay, but your products are showing up there and volume is flowing through that channel even if you are not conscious of it or you can't measure it closely.


That means the decision, like on Amazon, becomes one about control and maximization and risk/reward trade-offs rather than to sell or not to sell.

  • Do we want to ensure our content looks good on Uber Eats (or Instacart or Shipt or Grubhub or DoorDash)?
  • Do we want to ensure a shopper sees our products when they search for our brand or are we okay letting our fiercest rival own that top slot and enter the "previously bought" category forever?


Typically, the answer is a brand wants great content and to win share.


Fortunately, the investment to "expand" to omni-enablers is smaller than expanding to Amazon. It's a function of paying more attention to content (with a brand’s existing syndication platform able to distribute to omni-enablers) and investing in performance marketing (mean paying for search terms you care about in a flexible, auction driven manner) that is often enabled by existing partners and/or tech stacks.