Rite Aid doubles down on last-mile deliveries, adds Uber Eats as partner

Dive Brief:

Rite Aid is partnering with Uber Eats to provide last-mile delivery from 2,185 locations across 17 states as delivery demand grows for the pharmacy chain, the companies announced last week.
The partnership gives Rite Aid customers another delivery service to use for healthcare and grocery items, in addition to Instacart, Shipt and DoorDash. Customers can place their orders directly via the Uber Eats app.
Rite Aid is evolving its retail business to keep pace with changes in consumer shopping preferences, COO Jim Peters said in a statement. Adding Uber Eats as a delivery option shows Rite Aid is "doubling down on an omnichannel approach that complements the busy lives of our customers."

Dive Insight:

Rite Aid's suite of delivery partnerships show how the COVID-19 pandemic changed consumer shopping preferences in the long term. When Rite Aid announced its partnership with Instacart in May 2020, Peters said in a statement that the company was focused on providing essentials "during these unprecedented times."

In the company's most recent earnings call, Peters described the Shipt collaboration as "furthering our commitment to be everywhere our new target consumer needs to be and when she needs us." Rite Aid saw 183% revenue growth in its marketplace and delivery business from the year before, according to its earnings presentation.

"These channels deliver incremental profitability and now represent nearly 75% of our digital business versus only about a third of our digital business at this time last year," Peters said.

With several major players in the on-demand delivery space, Rite Aid is pushing to have its goods available to order from a range of apps. Doordash, Instacart, Shipt and Uber are four of the top five U.S. delivery intermediaries by sales, according to Retail Insight. Of the top five, Rite Aid is only not working with Grubhub and its parent company, Just Eat Takeaway, which focuses on food delivery.

Walgreens is also active in the on-demand delivery space, as the company uses Instacart, Postmates and DoorDash for deliveries. Xian Wang, VP of Retail Insight at Edge by Ascential, said in a statement that on-demand delivery will be a key retail subchannel in the future.

"As more retailers cooperate with these intermediaries as a cost-effective way to scale up fulfilment capacity quickly, we see them becoming essential points of influence in a shopper's purchase decision," Wang said. "Brands must start treating intermediaries as customers to win visibility on these platforms."