What It Takes to Build an On-Demand Business

InstaBuggy is bridging the gap between grocery stores and customers' homes. Julien Gleizer explains how his service fits into the new instant economy

Written by Robert Gold

The modern consumer isn’t used to waiting. Technology—whether it’s searching on Google instead of in library books or reading emails instead of waiting for letters to be delivered—has led us to expect the rapid fulfilment of our needs and wants.

So says Julian Gleizer, the CEO and co-founder of Toronto-based grocery delivery service InstaBuggy. He singles millennials out in particular as a generation that expects quick service. “They want the information or the products, and they want it now,” he says.

The result: A new economy of companies delivering products and services on-demand and as near to instantaneously as they can. Airbnb and Uber may be the names most associated with this trend, but there are plenty of startups applying the concept to basic consumer needs—like grocery.

Here’s how InstaBuggy has adapted the on-demand model to its own target audience.

1. Understand the regulatory environment

Not all jurisdictions have embraced the on-demand economy equally. Mindful of the cost to more traditional, big-money industries, regulators in some markets have tried to make Airbnb and Uber play by their rules.

“Canada’s a little bit tighter from a regulation standpoint,” says Gleizer. “It makes it a little bit harder to enter the on-demand economy.” That may change—governments at all levels are in the process of formulating policy to address this new form of business.

2. Tweak the model to suit yourself

Startups offering on-demand groceries in other countries have taken the crowdsourcing approach to fulfillment. “They have individuals [who] can select their own schedule, [at] their convenience to shop for groceries and deliver those groceries,” Gleizer explains.

Crowdsourcing minimizes HR costs and maximizes flexibility, but it’s not without its drawbacks. Gleizer uses the example of a construction worker who spends two spare working hours a day bagging groceries. “An order comes in, and you go and start packing, [but] you get a call from somebody saying, €˜Hey, there’s an emergency. You need to come here right now,'” he says. “[In that situation], the customer experience does get compromised.”

Instead of relying on crowdsourced workers, InstaBuggy has part-time and full-time drivers and shoppers on payroll. “That eliminates any risks and gaps, because it’s the end-user experience that’s key here.”

3. Work with—not against—the incumbents

Rather than send his shoppers into grocers to pack orders for users guerrilla-style, InstaBuggy works with the stores. “We’ve joined forces with retail giants such as Sobey’s FreshCo’s and Urban Fresh, as well as the independents,” explains Gleizer.

Initially, the grocery chains looked at InstaBuggy as a source of disruption, Gleizer admits. But over time they saw the value of working together. “We’re an addition to the bricks-and-mortar model, bringing the e-commerce and omnichannel into effect,” he says. “We provide more insight to the retailers in terms of data and analytics.”

Flyers and loyalty programs provide some data, but grocery stores typically don’t have a lot of information as to who their customers are, where they’re coming from, and what and how often they’re buying. InstaBuggy can track those purchasing patterns to build out individual and generalized profiles, allowing retailers to make perfectly-timed offers to drive sales.

Currently, InstaBuggy operates in the GTA and Ottawa, but Gleizer aims to expand into other provinces. Partnering with incumbents gives the company a clear growth path. “Having joined forces with these retailers, we are expanding and scaling up to other cities in conjunction with them,” explains Gleizer.

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Originally appeared on PROFITguide.com