Woolies buys up Milkrun
Promise of fast deliveries
Woolworths has beefed up its online delivery credentials by buying the brand and customer base of failed food and grocery delivery platform Milkrun.
Under the deal, believed to be worth about $10m, Woolworths will rebrand its Metro60 platform into Milkrun and have access to the customers who enjoyed using the start-up delivery service before it became the latest victim of the tech industry rout.
“We’ve long admired MilkRun’s innovative brand, dedication to customers and ambition to shake up the grocery delivery model,” said Woolworths chief executive Brad Banducci.
“We are thrilled that the Milkrun story will continue to live on and thrive with Metro60 relaunching as Milkrun now powered by Metro.”
Mr Banducci said orders would be fulfilled from the Woolworths network of Metro stores, which will give customers the choice of more than 10,000 product lines including hot roast chickens, fresh sushi and much more.
Existing Metro60 customers will notice the app has been rebranded to Milkrun now powered by Metro and the current functionality of the app will remain the same, Woolworths said.
There will be a flat $5 delivery fee and zero service fee.
Additionally, Milkrun backed by Woolworths will trigger a promotion where of no delivery fee on a new customer’s first three orders. Everyday Rewards members will also earn points with every purchase.
Orders will be fulfilled via the current Metro60 model, which uses third-party couriers and achieves an average delivery time of 33 minutes.
Milkrun collapsed in April after failing to secure new funding as investors pulled out of speculative and early startup tech stocks, that saw many companies close their doors.
Both Woolworths and arch rival Coles have invested hundreds of millions of dollars into ramping up their technology and delivery platforms to get food and groceries quickly to people’s front doors, with smaller players such as MilkRun placing pressure on larger supermarket chains to match them on lightning fast delivery times.
In November, then Coles boss Steven Cain said he believed online grocery delivery times of 60 minutes was the “sweet spot” for the sector that stacked up economically for retailers, as instant grocery players that tried to beat that time, such as Send and Voly, collapsed and others were pulling back on their service offering.
Mr Cain unveiled last year a “Rapid” click and collect service that cut delivery times for Coles shoppers, and said there was a demand for fast grocery delivery times.
“Worldwide what we are seeing is there is a demand for ‘fast’ and what we are seeing is different pricing models emerging, either you pay more for the product or you pay a delivery charge, I think everyone is still exploring what the right model is.”