Delivering ultra-fast growth in retail to meet changing demand
This year’s Deloitte Technology Fast 50 winner, grocery delivery app Buymie, experienced 6,900 per cent growth over the last four years and continues to benefit from changes in consumer behaviour
Although online grocery delivery took off during the pandemic, there are now signs that it has become embedded as a consumer behaviour. A report from Kantar in early 2022 stated that, despite the absence of pandemic restrictions, online sales continued to grow.
This is good news for this year’s Technology Fast 50 winner, Buymie, which has pioneered a different approach to grocery delivery and is now partnering with major retailers.
Devan Hughes, co-founder and chief executive, said that winning the Technology Fast 50 Award was a welcome recognition of the team’s hard work during what was a very difficult time.
“Having ranked as number five last year, it’s a big honour. It’s also really validating recognition for the team and our amazing personal shoppers, as there has been a lot of hard work during what was really a very uncertain period for the last few years,” he said.
The quantitative nature of the Technology Fast 50 awards programme is important to Buymie, said Hughes, as it is not a subjective award based on someone’s opinion.
“It very much makes a difference. The numbers speak for themselves and leave nothing open for interpretation. It’s just maths,” he said.
The numbers do speak for themselves. Now with a team of 65 and over 300 personal shoppers, Buymie’s vertiginous growth saw it become one of the most popular apps in Ireland in 2020.
“We really became an essential service overnight. We became the number one food and drink app in the country,” Hughes said. “Because we became an essential service overnight, we had to ramp up and scale to meet the demand.”
Buymie differs from other delivery options in two ways: unlike its competitors, it delivers more than a small basket of items. However, unlike retailers’ native options, it offers rapid, same-day delivery. Clearly, this is something the market wants.
“We provide the full weekly large shop, delivered today. That’s the shopping mission we cater for, and we’ve seen 6,900 per cent revenue growth in the last four years,” he said.
This has caught the attention of major retailers, and Buymie now has partnerships with both Lidl and Dunnes Stores, with expansion beyond groceries now under way.
“We’re working with our partners Dunnes and Lidl and we’ve just recently announced a new partnership with Woodie’s, as well as working with Asda and Co-op in Britain,” Hughes said.
With an average basket size of close to €80, Buymie is targeting a significant chunk of an addressable market for online groceries that is estimated to be in the region of €250 billion across Ireland and the UK. Buymie’s proposition is that it slots neatly into people’s busy lives and helps retailers compete and win in the online channel.
“The vast majority of grocery spend today is people shopping on the day they need it,” Hughes said.
Looking to the future, Hughes said that while the pandemic did drive growth, there is more room to grow. A full-scale digital transformation has occurred in both retail and customer expectations.
“A lot of people would say they heard about Buymie in the first quarter of 2020 as the world around us changed. Covid was a huge factor in our growth and it would be unfair to say it wasn’t, but what happened was that consumer preferences and lifestyles changed radically during that period,” he said.
Indeed, Buymie pre-dates the pandemic, having been founded in 2016, and was enjoying growth before March 2020.
“I was the first delivery person in 2016 when we launched. I did about 1,800 deliveries in our first two years and at the time we were already working on systems for scaling. It wasn’t until 2018, two years into that journey, that we brought on our first flagship partner with Lidl. We tripled the business in 2019 just through that partnership alone,” he said.
The pandemic not only drove higher sales, but it also meant Buymie had to scale more rapidly than had been anticipated.
“Finding the right talent is always an issue, but also there is the issue of getting the funding in place. We were closing a Series A raise of €2.2 million in the first quarter of 2020 and we realised, with Covid, that it wasn’t enough. When the public offices and schools were announced to be closed, we did a week’s worth of trade in a single day, and when that happened we knew we were going to need an entirely different funding plan,” said Hughes.
Since then, the online grocery market in Ireland and Britain has seen 15 to 20 per cent penetration – a threefold increase on figures before the pandemic. As the lockdown eased off and hospitality reopened, some shoppers did log off, but the change remains real.
“The online grocery market is still twice the size it was before the lockdown. People have stuck with the channel. Most importantly, now, people aren’t just in-store shoppers and they aren’t just online shoppers: they’re omnichannel, and retailers need solutions to cater for all missions,” said Hughes.
Ongoing economic uncertainty, particularly fuel costs, could also drive more shoppers online, with spiking petrol and diesel prices making supermarket runs unattractive.
“Ireland has the highest level of car dependency in Europe,” Hughes said.
The technology sector’s specific issues have hit the headlines in recent weeks, but Hughes said there was reason to be bullish about the future.
“I don’t believe we’re looking at a tech collapse in any way, shape or form. What we’re seeing is the cooling off after a major period of growth. During the past four years, the vast majority of technology companies had to ramp up to meet surging demand – we’re now seeing a correction in line with market dynamics shifting.”
In addition, the shifting sands could make early-stage businesses more attractive.
“My advice for people is to reach out to their local start-up hubs,” Hughes said. “We have a tremendously well-connected community of start-ups in Ireland, and I would urge people who have been laid off from large corporations to consider joining an early-stage business – their skills and expertise will be very much appreciated and valued.”