Uber Eats focuses on SMEs with new grocery delivery tools

This week Uber Eats announced the addition of some new features, directly aimed at grocery delivery. Interestingly, rather than highlighting supermarket giants such as Coles and Woolworths, the company has argued the benefits for smaller and independent grocers.

Uber Eats has been expanding its grocery offerings in recent years, including a massive partnership with Coles last year.

But now the focus is on SMEs. To make its point, Uber Eats featured the founders of two small grocers at its launch event this week — Spudshed’s Tony Galati and QE Foods’ Narinder Singh.

The bulk of Uber Eats’ features are aimed at improving the efficiency of grocery deliveries. These include:

• Active order adjustments – this allows customers to change the order up until the delivery person checks out
• Aisle indexing – this shows the exact item location in the app
• Smart item verification – this provides visual confirmation and details about the item in order to reduce errors.

These improvements certainly make sense for large supermarkets but do raise questions around the implications for smaller grocers.

The ability to adjust orders in real-time, while convenient for consumers, may pose logistical challenges for smaller stores with limited staffing or inventory management systems.

“My goal is to help merchants grow their businesses by making Uber Eats a truly effortless experience. While features like Aisle Indexing and Smart Item Verification were created for delivery people, we also continue to expand features like Courier Pack and Deliver, which often give merchants extra support picking items,” Susan Anderson, global head of retail and grocery at Uber, said to SmartCompany.

According to Uber, it wants to support local economies by connecting customers to SMEs. It argues that its platform could help increase sales for smaller grocers that may not have otherwise taken place.

It’s worth noting that it is unclear exactly how much of a commission Uber Eats takes for these grocery deliveries, or whether these fees differ between small retailers versus larger ones.

However, previous reporting on Uber Eats has suggested that commission rates can generally be up to 30%.

“One common misconception we help address is whether a third-party platform cannibalises a merchant’s customer base,” Anderson said.

“We ran a study with one of our largest grocery partners, and they found that 90% of orders were incremental.”

Anderson also says that Uber connects communities and actively supports SMEs.

“Uber is uniquely placed to create an economic flywheel within the community — delivery people living locally bring the goods from real stores, keeping life in town centres and creating economic opportunities across the world.”

One concern that has been raised around the growth of platforms like Uber is that they could increasingly contribute to the erosion of direct customer relationships. This can spell bad news for small businesses which have traditionally relied on those connections.

“We understand the value of direct customer relationships and are continually developing tools that enhance, rather than replace, the direct interactions between small grocers and their customers,” Anderson said.

“We are committed to evolving our service to meet the rapidly changing needs of our customers and retail partners, ensuring a high-quality delivery experience.”

Looking forward, Anderson says that listening to local merchants and delivery people will be her approach to this new role.

“I seek out feedback in every market we’re in, and I make an effort to meet the team and discuss the key nuances face to face,” Anderson said.

According to Anderson, she will be meeting merchants of all sizes while in Australia, but with a particular focus on small businesses.

“I am also embarking on a few hours of hands-on customer experience as a delivery partner where I will wander the aisles and make deliveries to better experience the technology in a real-world context to understand the areas where we can still improve and to understand the experience more completely,” Anderson said.