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Can all these new delivery apps like Instacart and Google Express survive in Tampa Bay?

Instacart recently began delivery service from Publix and other stores in Tampa Bay, joining a host of other delivery companies.
Instacart recently began delivery service from Publix and other stores in Tampa Bay, joining a host of other delivery companies.
Published Nov. 10, 2016

You can get just about anything delivered to your door by ordering it on your phone today.

In the past year or so, a slew of tech companies, some more recognizable than others, have flooded the Tampa Bay market with their app-based delivery services.

Shipt. Instacart. UberEATS. Google Express. Amazon Prime Now. Drizly.

Do we really need all of them?

Probably not.

"Can all of these companies survive? Absolutely not," said Phil Lempert, editor of SupermarketGuru.com. "The segment that is looking for the convenience of this and is willing to pay for it is small."

(AP Photo/Mark Lennihan)

Amazon Prime Now delivery is available in the Tampa Bay area.

(AP Photo/Mark Lennihan)

Amazon Prime Now delivery is available in the Tampa Bay area.

App-based delivery might be all the rage right now, but just like any start up industry, there's bound to be some shake out. Retail companies have offered delivery services for decades, especially in larger metropolitan cities where residents don't rely so heavily on cars to get around. But poor brick and mortar sales coupled with the surge of online shopping has spurred new innovation for delivery. Competition from the likes of Amazon, which sells everything and can deliver goods through drones, airplanes and trucks in under an hour, have forced other brands to get on the bandwagon.

Plus it's cool and it's easy. We're already on our phones so much. Why not order dinner or a week's worth of groceries this way?

"I think it's a natural process where a lot of people are jumping in and trying to carve out a niche, but there will be some consolidation," said Steve Kirn, a lecturer on retail and merchandising at the University of Florida. "The convenience factor is driving demand now, but there's a novelty factor in there, for sure. Some people will be willing to pay for it and others won't."

Read More: Why did cutting edge businesses like Shipt, Drizly and Carvana choose Tampa Bay?

Every app company in Tampa Bay offers something a little different from its competitors, but there's still a lot of cross over. Shipt delivers groceries from Publix and alcohol from ABC Fine Wine & Spirits.

Instacart delivers groceries from Publix, but also from Costco, Total Wine & More and Petco.

Google Express delivers merchandise from big box stores like Costco, Kohl's and Petsmart, but not as fast as some of the others.

Amazon Prime Now is offered exclusively to Prime members and delivers anything from ice cream to socks to a camping tent in an hour or two.

Drizly delivers just booze from ABC Fine Wine & Spirits.

UberEATS delivers takeout food from local restaurants.

And the list goes on.

What's interesting is that each company doesn't seem to be too concerned about its competitors. Not yet at least.

Justine Griffin | Times

Shipt began operating in the Tampa Bay area last year, but has since been joined by a number of competitors including Instacart.

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Justine Griffin | Times

Shipt began operating in the Tampa Bay area last year, but has since been joined by a number of competitors including Instacart.

Bill Smith, CEO of Shipt, a Birmingham-based tech company that was among the first to offer Publix grocery delivery in Tampa Bay more than a year ago, said reporters ask him how he feels about his competition all the time. He told me in an interview in April that he doesn't see Amazon or others as competition.

Read More: Can grocery delivery services like Shipt survive now that Amazon Prime Now is here?

"There's no real impact on our business because the need is different," Smith said at the time. "But the on-demand economy is really expanding. I think we'll see some consolidation at some point, but consumers want this kind of service."

Instacart, which launched its delivery service in Tampa Bay last month, is a direct competitor to Shipt. Instacart partnered with Publix earlier this year to launch a pilot delivery program in the Miami market. Then they expanded to Tampa Bay. While Instacart offers delivery from other stores outside of Publix, this partnership was key, said Nick Friedrich, general manager of Instacart in Florida.

"I was reading the news in Tampa myself and saw that there are a lot of different companies coming to the market here," Friedrich said at the time of the launch. "We knew there was going to be competition. But there was a large demand, both from our retail partners and from customers, who wanted our service in Tampa."

So enjoy this honeymoon period while there are plenty of companies in town that want to deliver you something.

Eventually there will be fewer of them, and prices will likely start to go up.

"Delivery is very expensive to execute. If a company says they can deliver something to you for free, they're lying," Kirn said. "It's not free to pay the drivers of the trucks, to pay the employees who pack the boxes. The price is in there somewhere."

That is, until the next round of innovation hits the market.

"The minute driverless cars and trucks are a bulletproof model, that will be the way things are delivered," Lempert said. "That will change the dynamics completely."

Contact Justine Griffin at jgriffin@tampabay.com or (727) 893-8467. Follow @SunBizGriffin.

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