Retailers Buy Into Same-Day Delivery

By Donna Ahern
Retailers Buy Into Same-Day Delivery

If success is all about good timing, then Buymie is a business whose time has most definitely come. Its CEO and founder, Devan Hughes talks to Maev Martin about partnering with Co-op in the UK, expansion plans for the Irish market, and how same day delivery is set to dominate grocery retail

“Over the next five to 10 years, convenience, discount and online will be the growth channels, not hypermarkets and supermarkets. I am predicting the increasing ‘platformication’ of grocery. Platform businesses – Facebook, Amazon, Alibaba, and Alphabet – can grow to the full size of the marketplace. Amazon Basics is killing every category it touches and this poses a major challenge for brands and retailers.

Amazon bought Whole Foods to get access to high frequency consumer data. Alibaba invested in Walmart for the same reason. While retailers are fighting back – Walmart beat Amazon to acquire Flipkart and Target bought Shipt – when it comes online shopping, the future is platform.”

This was Devan Hughes talking about the platformication of grocery at the ECR Ireland Leaders Congress in 2018. Fast forward to 2020 and it looks like his predictions have come true, but in a way that neither he nor anyone else could have envisaged. Last month his online grocery delivery company, Buymie announced that it had teamed-up with Co-op to offer same-day home grocery deliveries and full personal shopping services across Bristol.

The move is the first partnership in the UK for Buymie, whose mobile app allows customers to book same-day, tailored grocery deliveries to their front door.

The same-day delivery service will now be available to over 200,000 households across Bristol and its surrounding suburban area. The service sits alongside Co-op’s own same day online delivery offer and dedicated online shop, which the convenience retailer expects to be available from 650 stores in communities across the UK by the end of 2020.

So, how did this move, which is Buymie’s first international expansion and a major milestone for the business, come about? “We have been in the same day grocery delivery space for the last four years, primarily in Ireland and in the UK and I’ve been speaking at a lot of industry events and doing consultations with large brands and retailers and that is how the conversation with Co-op came about,” says Hughes.

“Buymie has built up great relationships with grocery retailers and FMCG brands and that can be attributed to the very industry-specific board that I have built, which includes Scott Weavers Wright, ex CEO of and builder of one of the largest children’s ecommerce platforms in Europe, Jan Harley, one of the founding partners for Unilever Ventures and, of course, Buymie chairman and former Superquinn marketing director, Eamonn Quinn.”

Rapid Expansion Plans

Given Buymie’s success at penetrating the grocery retail market in Ireland and the UK in a relatively short period of time, it is likely that the business will continue to expand further in the UK. “Buymie is a multi-retailer platform – we allow large enterprise retailers to use one fulfilment structure to facilitate same day grocery profitably, so we want to continue to build our strategic partnerships with grocery retailers in in the UK and in Ireland,” he says.

Indeed, rapid expansion in Ireland is part of the Buymie strategy for 2020/21. “As consumers confront a new reality for the foreseeable future, Buymie expects to create 200 personal shopping jobs over the next six months, including 30 drivers recently hired due to increased demand on the service during Covid-19 restrictions,” he says.

For the first three years of its existence, Buymie’s company mission was survival.

“I did 1,800 deliveries in the first year and a half, spending 58 full days in my car,” he says. “I was Buymie’s first delivery guy! We couldn’t get investor support in Ireland, so we were lucky to have Eamonn and Scott believing in us and to secure the Unilever investment, but we have now raised a significant among of funding and have just announced a multi-year extension to our partnership with Lidl Ireland.

That means that we are in a position to take a longer term view of the market – expansion is on our roadmap and we see our service being a great fit for Cork, Limerick, Galway and Waterford, as well as Belfast, and smaller cities such as Drogheda and Dundalk would also be a good fit.

If you look at Lidl and Tesco’s market share – the two retailers available on our platform to date – right now we cover 33% of the grocery retail market in Ireland. We are talking to other retailers and growth is not an issue for us, but we are focused on creating the infrastructure to service the deals that we have in place.”

FMCG’s Fastest Growing Channel

Over the past few weeks, we have seen some grocery retailers in Ireland move into the click and collect and online shopping space, and those who are already in that space experiencing big increases in their online shopping operations. Is this likely to continue, and at the same level, once the health crisis is over?

“A lot of people see the Covid-19 crisis as an accelerant for online shopping, but as far as I’m concerned Covid-19 has accelerated a trend that was already occurring,” says Hughes. “Covid-19 has fast forwarded a huge proportion of the consumer market to try online for the first time.

In Asia, up to 20% of those consumers will remain in the online channel as primary shoppers. In Ireland, it is hard to put a percentage on it.

“What we have seen during the Covid-19 crisis so far is that the traditional infrastructure for online grocery retail didn’t have the resources to deal with capacity requirements.

That was because of the infrastructure that is required to operate effectively in this space - distribution centres, warehouses, and vans.

With Buymie, we turn every store into a distribution centre, and we sweat those assets by sending our workers into those stores. Over the last 18 months, we have seen a rapid period of growth in the same day grocery delivery channel, and it is now the fastest growing channel in FMCG.

There are three channels – online, discount and convenience - and Buymie sits across those three growth channels. Our weekly total revenue grew by 2,000% in 2019 alone. In 2018 we were doing five figure sales a month, and within 12 months it is well into seven figures.”

Poor Scalability, Heavily Subsidised

Data from Nielsen shows that the online share of 13% of the UK grocery market in the four weeks to 16 May was up from 7% at the same time last year, and 10% higher than in April.

A total of 7.9 million British households placed an online grocery order, up from 4.8 million during the same period last year, including 1.1 million new online shoppers.

Many Irish commentators have said in recent years that online shopping in Irish grocery retail would never reach the levels seen in the UK, France, or other countries. In fact, one retail expert predicted back in 2018 that grocery retailing online would still be under 10% in Ireland in five years’ time.

“Those estimates are based on the infrastructure in place in Ireland,” he says. “Covid-19 has pulled the covers off the industry in the UK and Ireland and shown people what has been presenting bottlenecks – and it isn’t consumer demand, it is the lack of scalability of the existing retail models, which haven’t been able to facilitate the demand that is out there.

“If you look at Deliveroo and Just Eat, for example, they are stealing market share from grocery. The Buymie model is built to directly compete with that and allow grocers to create another convenience point for their customers. Our average basket size is about €70 with, on average, 30 plus items.”

Hughes says that an article he read in 2014 prompted him to enter the grocery retail “Covid-19 has shown people what has been presenting bottlenecks in the industry – and it isn’t consumer demand – is the lack of scalability of the existing retail models, which haven’t been able to facilitate the demand that is out there.”

Devan Hughes, founder of Buymie Technologies market. “It said that the online grocery market was a £9 billion market in Ireland and the UK combined, but that it was losing £300 million a year, so this was a channel heavily subsidised by grocers,” he says.

“However, when I looked at the long-term demand curve, it was going to grow to £22 billion, and we are at £17 billion, and £22 billion is forecast by 2023 for both Ireland and the UK, so our belief was that we had an infrastructure that couldn’t scale in a profitable way to meet that demand.”


According to Hughes, Buymie was the first independent ecommerce platform to take the discount channel online in Europe. “We always believed that discount would be a compelling offering in the online space,” he says. “The recently announced Deliveroo and

Aldi proposition is a hyper-convenience platform – food for right now and delivery in 25 minutes. We are same day grocery and large basket, so we are a different proposition, but we will continue to see retailers experimenting in the hyper-convenience channel.”

Post Pandemic Retailing

Hughes thinks that the Covid-19 pandemic will “fundamentally reshape” the grocery retail industry. “We now have people queuing for store access as well as at tills, so that is going to reshape the strategies that the entire industry considers,” he says.

“Experiential was a core focus for bricks and mortar retail and I think that will remain the case, but the levels of volume and footfall, and the new measures being rolled out by government, will be very challenging for the grocery sector to work around.

“The service and hospitality industry has taken the biggest hit and the grocery industry has swelled with that additional spend. That will drop as hospitality gains more traction, but we are facing into a new normal. Home dining and entertainment will become a key factor for people and that will be long lasting.

We will be left with one fundamental change in the consumer psyche, but the sector will adapt, and new operational standards will be put in place. However, the industry will have to embrace new channels and innovations to create value and mitigate risk.”

© 2020 Checkout – your source for the latest Irish retail news. Article by Maev Martin. Click sign-up to subscribe to Checkout.


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