Is Hy-Vee's 30-Minute Delivery Too Late? | Fast Five Shorts

Hy Vee Hy Vee has launched a new Get It Faster fulfillment option across all of its stores, offering online pickup or delivery in as little as 30 minutes.

I teased it.

Now it's here.

Per Progressive Grocer and grocery dive shoppers select Get It Faster at online checkout.

Hy Vee perks plus members get free 30 minute pickup and pay a flat 495 fee for 30 minute delivery, while non members pay 9.95 for pickup and 14.95 for delivery.

There's no minimum order for pickup and the launch lands alongside an existing promotion waiving delivery fees on orders of $75 or more.

Through September 6th.

Hy Vee's standard fulfillment window had been about two hours.

This cuts it to 30 minutes chain wide across more than 560 business units across nine Midwestern states.

Chain store Age also noted that Hy Vee joins a growing list of grocers in ultra fast delivery following albertsons flash since 202023 and Instacart's powered 30 minute options at stop and Shop Giant and Kroger that date back to 2021.

And let's also not forget Walmart and Amazon have both been expanding their own 30 minute footprints.

Josh, is HyVee's 30 minute delivery rollout a genuine competitive differentiator or is it just table stakes at this point?

I do think it's, it's starting to become table stakes.

But I also believe this is more of a loyalty long term and defensive play than it is, you know, a money maker.

It's just not a money maker.

The logistical costs of ultra fast fulfillment are pretty significant.

And if you think about it, we were just talking about it, a lot of these purchases are more impulse, right?

They're smaller baskets, they're less margin, they're expensive to fulfill and I think their goal here is really just to get more perks plus memberships who are paying the 99 a year, which will likely go up in the future just to create this kind of steady cash flow and predictable cash flow that they have.

So I think it's smart.

I think it gives you an edge on convenience.

I think it gives you more customer data and more predictable cash.

And so, but it's just not a profit driver, I don't think.

Yeah, right.

No, I agree with you.

I think the answer is actually a funny question.

It's actually both, but it's both of the caveat.

It's like it's table stakes but.

But you have to do it well to differentiate yourself or you're going to lose.

I think that's the thing I would say here.

And you know, as I was thinking about what you said, I mean, I think, you know, I think this is going squarely after the, the hey, I forgot this trip, you know, or I need to run in and get this trip.

And that's also driving unit purchases down too, because when you go in and get one thing, you might actually go in and get two things even though you went in for one.

So.

And the, the, the thing that I keep pointing to, and I talked about this at NCA too, is Brick meets click.

Puts out great data on this stuff every six months.

And the last report that they put out in June, it was really interesting because it said that ultra fast fulfillment, which is essentially what we're talking about here, the way Brick meets clicks to find it is one hour or less.

But that makes up now 18% of all delivery orders.

18% And 10% of ship to home orders, which is direct from the grocer.

And so that for the most part is Walmart and Amazon.

And now ostensibly it's Hyvee as well.

And that, don't forget ship to home as well is the fastest growing segment of online grocery as well.

It's, it's accelerating beyond, you know, the instacarts and the doordashes of the world and even accelerating faster than curbside pickups.

So, so this trend is coming.

We've been seeing it overseas in Europe for a while now and I think it's here to stay in the U.S.

Yeah, I think it's, I think it's kind of a, it's a nice to have.

It's a super convenient experience that you can give to people and eventually it's going to become to the point where you have to have it.

And so I think, you know, to answer your question earlier about table stakes, I.

It's going to become table stakes.

And like you said, I think people just have to figure out how to do it well and if they can do it well.

The goal is to just continue to win those extra shops to get more people into their loyalty ecosystem, which I think is, you know, from a lifetime value standpoint in retail and loyalty, I think, you know, the more people you get into your ecosystem, the, the more data you have and the better you're going to be off long term.

So I think, I think it's a good move and I think they.

We're going to see more and more retailers rolling this out.

Yeah.

And Hybe Hyvee is a great retailer too for sure.

Yeah.

The other point you bring up too Josh is the subscription.

You know, like the key is getting them into the subscription because once you get them in there you get them hooked.

You do this well, there's no reason you can't take the subscription price up over time as we do that very well.

Yeah.

You think about it, we see with Amazon, I mean my Netflix per script must go up every six months.

I mean Disney, all of the streaming services but once you're hooked you're like I'm not leaving.

And so long term I think it gives you the opportunity to continue to make a little bit more money and it's very predictable which I think is important for those businesses.

They know exactly how much cash is coming in there.

Yeah, yeah, yeah.

Or I'm suddenly watching ads on all my Amazon prime videos.

Thank you Amazon.

Yeah, appreciate that one.