Consumers’ growing demand for food delivery is catching the attention of retail tech companies with solutions designed to simplify mobile ordering and payment processing for convenience stores.
Altaine, a virtual company that started in Australia, said it entered the U.S. market this year with ordering and mobile payment solutions for convenience retailers. And Lula Convenience, a Philadelphia-based technology company, offers its integrated Lula Store Platform to allow convenience stores to more easily manage delivery orders and DoorDash requests. Lula's platform works with Gilbarco Veeder-Root’s Passport, a point-of-sale system, the company said.
Altaine’s U.S. announcement arrived just before DoorDash, the San Francisco-based technology firm connecting retailers with consumers by easing delivery logistics, reported its revenue hit $2.04 billion in the quarter ended March 31, up 40% from $1.46 billion in the year-ago quarter, due to larger order sizes. It posted a net loss of $161 million, an improvement from $167 million a year ago.
DoorDash’s total orders reached 512 million in first-quarter 2023, up 27% from the year-ago period. Marketplace GOV revenue hit $15.9 billion, up 29% over the year-ago quarter. The company defines Marketplace GOV revenue as the total dollar value of orders completed on its marketplaces, including taxes, tips and any consumer fees. It also includes membership fees related to DashPass subscriptions, offering unlimited monthly restaurant deliveries for about $10 a month, and Wolt+, a European subscription service. In March, DoorDash announced Lush Cosmetics, Victoria’s Secret and Party City were among the 100,000 non-restaurant companies using its platform.
Letter to Shareholders
Restaurant orders continue to command the vast majority of orders processed through DoorDash platforms. “We started in restaurants, and the majority of sales we have driven for local merchants to date has gone to our restaurant partners,” said DoorDash Co-Founder, Chairman and CEO Tony Xu and Chief Financial Officer Ravi Inukonda in a letter to shareholders.
While DoorDash expanded the number of consumers and businesses it serves during COVID-19 when many other companies experienced declines, the upward trend is continuing even as restaurants and retailers that were closed have reopened.
“Since the beginning of 2020, our Marketplaces have driven nearly $100 billion in sales for local merchants, over half of which came in the last 15 months,” the DoorDash letter said. “In the 12 months through March 2023, we spent well over $13 billion on research and development, sales and marketing, and direct costs associated with processing, fulfilling, and supporting orders for our merchant partners, while collecting less than $8 billion in merchant commissions.”
Adoption in the convenience industry has lagged restaurants substantially. “We formally launched our first non-restaurant category, convenience, in 2020 and have since expanded to grocery, alcohol, pets, flowers, beauty, and retail. These efforts remain early, and we have significant room to improve the quality of experience we offer. Given the complexity of each of these categories, progress is more likely to come in small increments than large breakthroughs,” said in the letter.
Solutions for C-stores
If the reason convenience stores haven’t gone to delivery stems from managing orders, Altaine said its cloud-based Q-Mgr order management system can help. The system works with DoorDash and UberEats platforms to help convenience stores automatically send and receive orders for delivery, eliminating the need for manual entry or the use of a separate device, Altaine said. Gig drivers, which DoorDash calls Dashers, respond to the requests and deliver goods to consumers and businesses.
“We believe that this integration will help them grow their sales, reach new customers and streamline their operations,” Jo Gelb of Altaine said in a statement. “We expect to be adding some regional delivery services as some of our new projects roll out,” Gelb said. “Uber Eats and DoorDash have a wide reach. Where a gap is found, we would try to work with a local provider.”
“We are about to enter the U.S. market through projects rolling into the U.S. with existing large clients,” Gelb said, without naming specific retailers and restaurants.
Altaine’s integrated software platform aims to improve costs for retailers by putting several applications on one technology platform.
While the convenience store is responsible for picking the order to have it ready for the delivery driver, convenience-store workers won’t have to make a phone call or boot up another device, Altaine said. “In some cases, we are looking at the possibility of the delivery service staff picking orders, but this is a new idea,” Gelb said.