COVID-19 has forced a rapid change in consumer habits, causing an obvious surge in demand for online shopping and home delivery. Retailers have significantly increased availability in online delivery slots. Tesco, for example, has increased weekly delivery slots by more than 20%. However, retailers are struggling to keep up with the spike in demand for home delivery and are striving for innovative solutions to help support the UK’s lockdown efforts. A number of traditional grocers and convenience stores (including Morrisons, M&S and McColl’s) have turned to Deliveroo and other online food delivery apps for help.
For those retailers considering entering into partnership with app providers, contracts needn’t be complicated and can be finalised at speed. A few thoughts on contractual points to consider:
- Data: Who “owns” the customer relationship and data arising from use of the app and will that data, or any insight from that data, be shared? Third party app providers may well seek control but, for longer term relationships, this will need careful consideration. For example, can data be used to power existing loyalty schemes? Either way, it will be important to ensure the arrangement complies with data protection law, both within the contract itself and more widely.
- Range: To make the solution workable, most retailers offer only a limited range of SKUs. A process for dealing with change quickly will need to be agreed. This is particularly important in light of recent supply chain stress and unusual changes in demand.
- Integration: POS integration is a significant focus for restaurants offering delivery through third party apps. It will also be important for retailers, who should consider how any new system or method of delivery integrates with current POS and inventory management solutions. This should be reflected in the contract.
- SLAs: What are each party’s requirements in terms of SLAs? Both retailers and third party app providers will want to ensure that their customers are able to rely on a smooth service, in terms of collection and retailer readiness (among other things).
- Branding: How should retailer and provider branding be used, or not used by each party? Both parties may want to market the service being provided. Clear boundaries, guidelines and processes should be agreed up-front, if possible.
The world’s reaction to COVID-19 has brought about a number of trends that may continue over the longer term, and increased consumer reliance on online and innovative partnerships may be a lasting result.
As lockdown disruption continues, securing a supermarket delivery slot to get your weekly shop is still hard, as many are fully booked weeks in advance. But as essential items such as pasta, milk, bread and baby milk are still high in demand, some supermarkets have partnered with Deliveroo to help people get what they need.
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