5 Reasons GoPuff Is More Dangerous Than Amazon

PHILADELPHIA — Sure, the prospect of Amazon entering brick-and-mortar retail with its modern technology and troves of data could be terrifying for retailers.

But the reality for convenience-store and petroleum retailers is that people visit c-stores for different reasons than grocery stores. Even if Amazon magically turns its pending acquisition, Whole Foods Market, into a retail paradise overnight, c-stores likely won’t feel a major squeeze in business until more consumers accept and begin to expect that level of service from their retail experience. And at this point, what that level of service looks like is anyone’s guess.

E-retailer goPuff, on the other hand, is already here. The online delivery service has a mobile app that allows customers to shop for anything found in c-stores and beyond, from printer ink cartridges to candy bars to condoms. Orders of any size are delivered in 30 minutes, with a meager delivery fee of $1.95 for all orders of less than $49. The business is up and running in 20 markets in the United States and it’s growing.

Here are five reasons why goPuff is a more immediate concern to c-stores than Amazon …

While it may seem like the main competition for an online delivery service would be grocery delivery services such as Postmates and Doordash, goPuff’s founders don’t see it that way.

For millennial founders Rafael Ilishayev and Yakir Gola, the very concept of convenience stores is their competition, according to a report in Entrepreneur.

It’s not that they’re trying to share the market with physical c-stores or become a part of consumer shopping habits. They want to make physical c-stores obsolete with their online service. Whether they succeed or not, their goal should worry c-store operators.

Pictured: Rafael Ilishayev, left, and Yakir Gola, right. 

Millennials make up 51% of c-store shoppers, according to Technomic Consumer Insights. GoPuff is trying to take millennials, specifically college students, and turn them into regular digital/delivery customers instead of regular c-store customers.

Ilishayev and Gola founded goPuff while they were still undergrads at Drexel University in Philadelphia with the image of a nearly 24-hour delivery service that brings school supplies, snacks and condoms straight to customers. What college student wouldn’t see an appeal?

One reason Amazon has been so disruptive for retail in general is because of the gigantic variety of items offered on the website, from technology to fashion and everything between. This has been a huge problem for large retailers such as Best Buy and Target, but c-stores haven’t been affected nearly as much because the industry sells a very specific set of items tailored for travelers or a customer who needs something small and quickly.

Small products such as phone chargers are goPuff’s bread and butter, putting them directly at odds with c-stores. If a college student in need of a phone charger has to choose between going to a c-store and waiting two days for an Amazon Prime delivery, they would probably choose the c-store. But what if goPuff is an option that does away with the need to leave the home, dorm or even library?

Launching goPuff in a new market sounds pretty straightforward. The company generally finds and purchases cheap warehouses to store its products. The warehouses don’t have to look fancy; there are no customers browsing the shelves. The company also hires delivery drivers in the same vein as UberEats, making the company a player in the sharing economy.

The bottom line is that goPuff’s business model allows the company to offer nearly the same products as a c-store, minus fuel and services, for far less overhead.

goPuff's loyalty program is called Puff Points. Customers earn one Puff Point for every dollar spent on the service. Customers can save their points to earn swag and prizes.

Whether or not goPuff’s loyalty program helps it collect and retain customers remains to be seen, but college students using goPuff today are going to expect a new level of service from their future purchases. Amazon could eventually revolutionize brick-and-mortar retail the way it’s revolutionized online shopping, but goPuff is already shaping consumer expectations. The future is now.