DoorDash adds Sephora to diversify its offerings

It’s part of an overall push for DoorDash to grow beyond its restaurant-focused beginnings. In late October, DoorDash added Tractor Supply to its app, its entry into the agriculture category. And in September, it added Dick’s Sporting Goods as its first sporting partner.

“We’re seeing this convenience trend growing across all different verticals, and we’re seeing demand for the beauty category,” said Shanna Prevé, Vice President of Partnerships at DoorDash,

The expansion comes as competitor Instacart, which built its brand on grocery delivery, is also expanding into non-food categories like furniture and appliances. And overall, consumers are showing increased interest in fast delivery: Research firm Technavio found in October that same-day delivery market share is expected to grow at a CAGR of 21.4% through 2026, supported by the ubiquity and convenience of smartphones.

Prevé said she anticipates Sephora’s orders could come from people looking to restock quickly after they’ve sold out of an item, people who are traveling, or people who want to send a unique gift.

“It was always part of the plan,” she said of the expansion. “We want any item that can be purchased in your local community to be available at your doorstep within minutes. Not hours, not two days from now.

New categories

The company began diversifying its offerings beyond restaurants about four years ago, Prevé said. This included a move into grocery in August 2020, as well as specialty retail outlets like Office Depot in March and Bed, Bath and Beyond last fall.

As of December 2021, approximately 14% of DoorDash’s 25 million customers are purchasing the new non-restaurant categories.

“New verticals are growing faster than even our core business,” she said. “So we’re investing a lot there and we’re seeing great results with our consumers.”

Amit Kalley, CEO of e-commerce platform Infosys Equinox, said consumers expect fast and efficient delivery, especially since the pandemic. The boom in online shopping has allowed many customers to have items delivered the same day, or at least within two days.

“There has been a fundamental shift in consumer behavior towards digital,” he said. “What this ultimately means is that consumers not only expect, but demand that they get the same experience, the same convenience, the same level of service, that they are used to as when they are in-store. .”

For DoorDash, this means an opportunity to attract new customers. During its third quarter earnings call last week, CFO Prabir Adarkar said DoorDash is expanding into new categories as they add scale to the business. In particular, they attract new customers who are not currently using DoorDash for restaurants.

“Now they can use it to get flowers or get their convenience items or get their groceries or get alcohol delivered,” he said. “And so an increasing number of our new customers are now coming to DoorDash to try out these new categories, and that’s going to unlock the next stage of growth as we continue to increase our penetration of the US population.”

DoorDash also offers DashPass, its $9.99 per month membership plan that waives shipping costs and offers special offers like coupons and credits.

Jan Soerenson, North American general manager of e-commerce services platform Nest, told Modern Retail that apps like DoorDash could diversify more now ahead of a possible downturn. This will help them match supply with demand, especially if consumers avoid expensive restaurant orders.

“Given a possible looming recession, I think many delivery apps today want to avoid the situation that Uber faced after Covid when it had to rapidly increase the number of drivers and was unable to do it when the demand comes back,” Soerenson said. “Better to occupy the supply side.”

The Sephora draw

DoorDash soft launched Sephora deliveries in mid-October. Prevé did not share order numbers, but said early demand appears strong. Top sellers include cult favorites like The Ordinary’s Glycolic Acid, Beauty Blenders, Olaplex hair products and Charlotte Tilbury’s Pillow Talk Lipstick.

For Sephora, switching to DoorDash could mean more customer acquisition. On the DoorDash marketplace, customers looking for any of the 340 beauty brands offered by Sephora may end up placing an order.

“I think that’s one of the reasons a lot of retail partners are excited to get started on DoorDash is that they’re fundamentally tapping into a different set of consumers,” Prevé said.

A Sephora spokesperson declined to share the number of same-day orders it is currently receiving or the share of customers using same-day delivery services. But the retailer added an increasing number of options. In September 2020, it partnered with Instacart, and in November 2021, it launched its own same-day delivery service. It was added to the Shipt marketplace in March 2022 and this fall announced a $49 annual subscription for unlimited same-day shipping.

Nadine Graham, vice president and general manager of e-commerce for Sephora, said in a press release that the partnership with DoorDash is “a natural next step in the continued evolution of ease and convenience” for consumers.

Infosys Equinox’s Kalley said that for retailers, partnering with apps like DoorDash can help solve last-mile delivery issues, which can be costly or time-consuming for large retailers to map across the country. And whether it’s with an app, internal logistics plans, or a combination, he predicts more retailers will find ways to understand same-day shipping from outlets to address logistics cost pressures. .

“Every retailer is on the verge of adopting it,” he said.

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