Why DoorDash Is Partnering With BJ's Wholesale

Summary

The discussion centers on DoorDash's expansion into grocery delivery through partnerships like BJ's Wholesale, highlighting the unique economics of grocery versus restaurant delivery. The company emphasizes consumer demand for rapid delivery across various sectors, leveraging its large active user base and subscription service, DashPass. Amid inflationary pressures, DoorDash is supporting its delivery workforce with discounts and incentives. The conversation touches on market dynamics, potential consolidation in the delivery space, and DoorDash's innovative experiments aimed at enhancing local commerce, indicating a transformative future for on-demand services.

Takeaways

• 😀 DoorDash is expanding its partnership with BJ's Wholesale, allowing customers to access products via DoorDash.
• 😀 The company is experiencing growth in grocery delivery, with partnerships already established with major grocery chains.
• 😀 Unit economics for grocery delivery differ from restaurant delivery due to the complexities of picking and packing.
• 😀 Consumer expectations are shifting towards faster delivery times for a wider range of products, not just food.
• 😀 DoorDash has a strong market share in the restaurant sector, which positions it well to expand into other delivery categories.
• 😀 Rising inflation and gas prices are affecting delivery costs, but the number of active dashers remains stable for now.
• 😀 DoorDash introduced programs to support dashers during inflation, including discounts on gas and bonuses for frequent drivers.
• 😀 The company is cautious about adding consumer surcharges to avoid reducing demand.
• 😀 Market fluctuations do not overly concern DoorDash; they focus on long-term solutions and profitability.
• 😀 DoorDash is experimenting with ultra-fast delivery options and has plans for future innovations in local commerce.

Q & A

What are the key aspects of the partnership between DoorDash and BJ's Wholesale?

The partnership allows BJ's Wholesale to reach consumers via DoorDash, with 226 stores primarily on the East Coast and 17 states covered, expanding access to wholesale products through the DoorDash platform.

How do the unit economics of grocery delivery differ from restaurant delivery?

Grocery delivery involves more costs due to picking and packing items, but grocery orders are often larger than typical meal orders, creating different economic dynamics.

What is DoorDash's strategy in response to rising consumer expectations for delivery speed?

DoorDash aims to meet increasing consumer demands by expanding beyond restaurants into convenience grocery and other sectors, leveraging their existing user base of 25 million monthly active users.

How has inflation affected DoorDash's business and dasher supply?

Inflation impacts all aspects of the delivery system; however, DoorDash has not seen significant changes in dasher activity. They have introduced programs to help dashers cope with rising gas prices.

What measures has DoorDash taken to support dashers facing high gas prices?

DoorDash introduced a discount card for dashers to save on fuel and a driving bonus for top dashers based on miles driven to help alleviate the impact of rising gas prices.

How does DoorDash differentiate its approach from competitors like Uber?

DoorDash focuses on not imposing consumer surcharges, which could reduce demand, and emphasizes maintaining a large, efficient system to address dasher and consumer needs without further inflationary pressure.

What is DoorDash's perspective on market fluctuations and company valuations?

The CEO emphasizes focusing on long-term growth rather than short-term market fluctuations, believing that the market will ultimately stabilize based on the company's performance.

What trends are emerging in the delivery space that DoorDash is exploring?

DoorDash is experimenting with quick commerce, including ultra-fast delivery options, indicating a commitment to meeting evolving consumer expectations.

Are there any plans for DoorDash to enter the cannabis delivery market?

Currently, DoorDash has no plans to enter the cannabis delivery market, as stated by the CEO.

What innovative solutions is DoorDash testing to improve customer experience?

DoorDash is testing features like package returns for retail items, allowing customers to get their deliveries while also managing returns, which addresses a common consumer pain point.