DoorDash Adds Flexible Fulfillment, Partners with Dollar General

DoorDash has owned headlines this week. The food delivery giant first made a splash when it reported Q3 earnings on Tuesday, which were accompanied by the news of an international expansion with the company's $8.1 billion acquisition of Finnish food delivery platform Wolt, causing the stock to pop.

But DoorDash's DASH big week didn't stop there, as the company made two more major announcements on Thursday. The first is a major upgrade to its Self-Delivery program, which will now offer flexible fulfillment to partner restaurants, giving them the option to toggle between utilizing Dashers –– the company's term for its couriers –– and their own fleet. DoorDash also announced on Thursday that it will partner with Dollar General DG to offer on-demand delivery of household essentials.

The addition of flexible fulfillment to DoorDash's Self-Delivery program was spurred by feedback from restaurants, which have struggled to expand their delivery operations amid pandemic conditions and a lack of drivers. Self-Delivery was rolled out last year to allow restaurants to fill DoorDash orders with their own in-house staff, and the added flexibility figures to allow even more restaurants to participate.

"This update does not only benefit restaurants with fully established fleets, but it also encourages smaller shops to find cost-efficient operations," the company said in the announcement. "With flexible fulfillment, restaurants have both flexibility and control to determine which orders make the most financial and operational sense for staff to deliver and which orders could be fulfilled by Dashers for an additional flat fulfillment fee per order."

As the announcement notes, Self-Delivery orders fulfilled by Dashers will carry an added flat fee, but restaurants will still have control over the delivery fees they charge customers.

As part of the upgrade, DoorDash also introduced the ability to automatically assign orders to be either self-fulfilled or Dasher-fulfilled based on criteria chosen by restaurants, such as delivery distance or time of day. Restaurateurs running the DoorDash app on tablets can easily toggle between self-fulfillment and full Dasher fulfillment with a single button.

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Flexible fulfillment is available now in the U.S., Canada, and Australia. New and existing Self-Delivery restaurant partners will have the option to enable flexible fulfillment, and interesting restaurants can learn more on DoorDash's Self-Delivery product page.

In tandem with the Self-Delivery expansion, DoorDash also announced a partnership with Dollar General to enable same-day delivery of household essentials, which will offer delivery in under an hour on average, according to the two companies.

"Our platform was designed to connect consumers to their communities, providing increased access to food, everyday essentials, and other local goods," said Tom Pickett, chief revenue officer at DoorDash. "We are thrilled to partner with Dollar General to provide customers across the country with convenient access to the everyday essentials they need at the affordable price points they have come to trust. With this partnership, we are proud to expand our services to areas that traditionally have not had access to same-day delivery."

Same-day delivery is currently available out of 9,000 Dollar General stores, with plans to add another thousand-plus location by December. According to the announcement, DoorDash and Dollar General also piloted an initial program out of 600 Dollar General stores in the summer. Under this expanded partnership, customers can add products from Dollar General on DoorDash's marketplace with no time slot or minimum order size.

"At Dollar General, we strive to make shopping hassle-free and affordable, and our partnership with DoorDash reiterates DG's commitment to providing convenient and contactless options," said Emily Taylor, Dollar General's executive vice president and chief merchandising officer. "We look forward to providing both existing and new customers with an even faster and more convenient way to experience all that DG has to offer."

The Dollar General partnership surprised many, and for good reason. DoorDash typically partners with larger chains like Rite Aid or Albertsons ACI, where order sizes are generally larger and prices are generally higher. It has also sparked confusion from several others, who find it counterintuitive to add a brand notorious for its low prices to a platform known for its price markups and high fees.

But this isn't the first time a delivery app has targeted a dollar store — Instacart has a similar partnership with Dollar Tree and appears to have found some success with the model, adding other chains like Five Below and Family Dollar to its platform and even establishing its own Dollar Store hub.

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