New DoorDash customers are turning to the app for grocery deliveries and flowers, not just restaurant meals

DoorDash Expands Grocery Business, Attracting New Customers Beyond Restaurants

Restaurant delivery powerhouse DoorDash is leveraging its burgeoning grocery segment, attracting a growing number of new customers seeking non-restaurant orders. CEO Tony Xu revealed that DoorDash’s retail selection, now spanning more than 100,000 stores, is drawing consumers to the platform for diverse shopping needs.

Xu shared during the company’s Q2 earnings call, “Already outside of the restaurant category, we attract more new customers that are ordering from these non-restaurants for the first time in the industry than any other platform.” This expansion into non-restaurant deliveries has taken place over a span of about 2.5 years.

In addition to meals, DoorDash facilitates the purchase of groceries, pet supplies, office essentials, and flowers. This diversification has fueled a 25% YoY surge in total orders, reaching 532 million for the quarter. Notably, the platform set a record for non-restaurant sales on Mother’s Day, delivering 200,000 orders from flower shops.

DoorDash’s success in attracting new customers beyond food delivery demonstrates its strong position. Xu stated, “I think it’s encouraging to see that we already attract more new customers into this field than anyone else and that a lot of customers are coming to us for the first time not for restaurants.”

Initially founded a decade ago in a Stanford dorm room, DoorDash has evolved into a prominent player in the $123 billion food-delivery industry, boasting a market cap exceeding $30 billion and facilitating orders from over 500,000 stores.

Having emerged victorious in the restaurant delivery competition against rivals like Grubhub and Uber Eats, DoorDash ventured into grocery and convenience store deliveries in August 2020. The company’s rapid growth is evident, as it has onboarded major retailers such as Albertsons, Aldi, Target, Walgreens, and more.

Presently, DoorDash features 100,000 retail stores on its app, up from 75,000 a year ago, surpassing Instacart’s 80,000 stores. The percentage of consumers initiating their shopping journey on the app by ordering groceries has steadily increased, hitting a “record high” recently, according to the company.

Retail logistics expert Brittain Ladd highlighted DoorDash’s remarkable expansion into various retail categories, asserting that the company’s growth and technological expertise make it a substantial threat to competitors like Instacart.

This strategic foray into groceries aligns with DoorDash’s goal to continually evolve and meet diverse consumer needs. Meanwhile, its rival Instacart faces challenges and market shifts, with its valuation being adjusted and a recent dip in online grocery sales.

As DoorDash’s grocery endeavors gather steam, it’s poised to reshape the grocery delivery landscape and further cement its role in the evolving e-commerce space.

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