Dive Brief:

• DoorDash has announced the creation of DashMart, a new digital convenience store service that marks the company's foray into managing and delivering its own inventory, according to a company blog post. Deliveries from DashMart will be available in as little as 30 minutes.
• On DashMart, customers can buy around 2,000 grocery products, household essentials, convenience and restaurant offerings, according to CNBC. DashMart will feature retail products from national brands like The Cheesecake Factory and local businesses like Noms Bake Shop based in Tempe, Arizona.
• To start, DashMart will be available in eight cities including Chicago, Dallas and Phoenix, and continue to expand to new cities like San Diego and Baltimore in the next several months. 

Dive Insight:

With customers expecting food and essentials to be delivered faster and safer than ever, DoorDash is well-positioned to gain traction quickly as it doubles down on convenience with DashMart. The new service could pose a major challenge to grocers and delivery services like Instacart, which have been fighting to gain and retain new shoppers amid soaring demand during COVID-19. 

DoorDash has been expanding beyond meal delivery for a while now, adding both grocers and convenience stores to its roster of clients. In April, the company added a convenience category to its app, which includes same-day delivery on items from stores like 7-Eleven, CVS and Wawa. The company also partners with e-commerce platforms Rosie and Mercato, both of which work with independent grocery retailers. 

But with DashMart, DoorDash has moved past fulfillment services into becoming a retailer in its own right. The company has some key built-in advantages, including its relationships with major product brands, customer data and millions of shoppers on its platform. And its experience optimizing delivery, not to mention its network of drivers, also offers a leg up as it backs into food retailing.

Grocers along with third-party companies like Instacart and Shipt have noted a surge of new shoppers amid the pandemic, and they've offered promotions like no-fee pickup to drive adoption. While these companies are busy targeting large-basket shops, DashMart along with e-commerce convenience brand goPuff are going after fill-in trips and impulse purchases that make up a large slice of consumer shopping trips. 

DoorDash has made DashMart possible, in part, through a network of dark warehouses, according to an article by food tech news site HNGRY. According to the report, DoorDash has dark warehouses spanning 5,600 to 11,000 square feet that are located in cities where DashMart is launching. 

DashMart will also offer merchants and brands a new way to reach consumers. DoorDash will be responsible for curating the product selection, but said it is committed to partnering with local businesses in each of the areas DashMart will operate.