DoorDash announced the launch of its new DashMart service today in a move that essentially has the delivery company creating its own ghost convenience store.
From a DoorDash blog post announcing the DashMart (emphasis theirs):
DashMart is a new type of convenience store, offering both household essentials and local restaurant favorites to our customers’ doorsteps. On DashMart, you’ll find thousands of convenience, grocery, and restaurant items, from ice cream and chips, to cough medicine and dog food, to spice rubs and packaged desserts from the local restaurants you love on DoorDash. DashMart stores are owned, operated, and curated by DoorDash.
DashMart is currently available in eight cities: Chicago, Minneapolis, Columbus, Cincinnati, Dallas, Salt Lake City, the greater Phoenix area, and Redwood City, CA. In the coming months, DashMarts will be coming to San Diego, Baltimore, Denver, Sacramento and Concord, CA.
I spoke with a DoorDash rep by phone today, who filled in a few more details. DashMarts are delivery-only, physical fulfillment centers that are stocked with big brand names (think: Snickers bars) as well as items from local restaurants (think: frozen slices of Cheesecake Factory cheesecake, or spices from local BBQ joints).
DoorDash has built out nine fulfillment centers, placed in locations where people don’t have easy access to a convenience store. Customers browsing the DoorDash app can select the DashMart and shop as they normally would.
That DoorDash is getting deeper into the convenience category isn’t a huge surprise. The company launched convenience store delivery in April of this year with WaWa, 7-Eleven, Circle K and more. In July, it expanded that program with a partnership with Walgreens.
Part of the reason for the expansion is pretty straightforward. The COVID pandemic shut down most of the restaurants across the country, accelerating the need for DoorDash to get into new markets. Convenience stores are a good fit for the DoorDash, which is all about fast delivery of smaller and/or last-minute items.
Today’s announcement brings more vertical integration into DoorDash’s convenience ambitions. DoorDash owns and operates these DashMarts, deciding which products gets stocked and controlling the whole endeavor from top to bottom. In addition to keeping all the revenue from sales through DashMart, DoorDash also gets more data around customers and purchases and can better optimize its own inventories.
Of course this isn’t the first ghost operation for DoorDash. In October of last year, the company opened up its first ghost kitchen facility in Redwood City, CA, which went on to house restaurant brands like Chick-Fil-A.
With the pandemic still running its course through the U.S., DoorDash’s delivery services will be in demand for the foreseeable future. So its not hard to imagine the company has plenty of time to build up a robust network of DashMarts in the coming year.
I am curious if any other region is being over run with Walmart deliveries. I am in Central Iowa and it seems like 80% of the orders I receive lately are from Walmart. I have gone from being able to earn 50-60 dollars a night in a couple of hours after I am done working my full time job to just barely clearing 30 dollars a night because all I get are orders from Walmart