Defining the Instant Needs Market – A New Study by Coresight Research
Report Reveals that Gopuff’s Vertically Integrated Business Model is Key for Success
The recently released report “From Quick Commerce to Instant Needs: Exploring Business Models in Rapid Delivery” by Coresight Research provides a comprehensive look at the evolving Instant Needs category. The report explores the business models and economics of delivery companies including Gopuff – creator of the Instant Needs category, along with new entrants to the space and legacy third-party delivery players.
Coresight’s market analysis identifies advantages to the vertically integrated model “carved out” by Gopuff, and affirms that the first-party model is key for success in the category. The advantages of vertical integration mentioned in the report include optimization for fast order prep and strategic locations enabling short delivery times; greater visibility into product quality, inventory supply and pricing; control over the customer experience; and a fast-rotating assortment of diverse goods.
Coresight founder & CEO Deborah Weinswig invited Daniel Folkman, Gopuff’s Senior Vice President of Business, to participate in a live webinar to discuss the report and what the findings mean for Gopuff and the future of the industry.
“I think you’re still the authority here and I think that’s driven much of your, if you will, market share domination of 70% plus,” said Weinswig to Folkman during the webinar.
“We’ve created this highly repeatable playbook and process for geographic expansion, and so access to capital becomes also a competitive advantage because not only do we know what we’re doing, and we’ve built it and proven that it works in every different way, but now we’re able to invest more and faster into expanding it to make sure more consumers can use the service,” said Folkman. “Because at the end of the day, that’s the name of the game – you want consumers to have an incredible experience and to be happy.”
Additional key findings include:
Vertical integration is key to rapid delivery and long-term sustainability.
Gopuff has over 70% share of the US Instant Needs market (Yipit).
Gopuff created the Instant Needs category eight years ago, and while new entrants have borrowed the model, scale yields favorable economics.
There has been a boom in funding in the Instant Needs segment with $6 billion to date. Gopuff has captured over half of that.
Reflecting the market’s potential, the report emphasizes the “explosion” of new entrants and funding into the category, estimating that retail sales by major players in the overall quick-commerce market will total $20–25 billion in the US this year.
- Coresight Research
- Instant Needs