The U.S. convenience store industry is huge, with more than 154,000 convenience stores nationwide serving 165 million daily customers. So when two college students set out to disrupt this retail model, the odds were against them. But as the name goPuff started to pop up everywhere from billboards to social media to word of mouth, it piqued everyone’s interest, including ours.
We conducted a deep dive into this interesting startup: how it works, what makes it so unique, and why you should care.
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goPuff is the go-to, on-demand digital delivery service for immediate, everyday needs, from cleaning supplies, household goods and over-the-counter medications to food and drinks, delivered directly to you. In 2013, its co-founders, Yakir Gola and Rafael Ilishayev, were students at Drexel University when they came up with the idea. They realized that going to the store to get supplies, for something like a party or movie night, took too much time that could be spent more productively. So they began to think of ways they could make this process faster and more efficient, creating goPuff along the way. Now, the company is headquartered out of Philadelphia, with smaller, satellite offices located in other major cities.
goPuff continues to grow, with its latest funding round closing in October 2020. According to Crunchbase, goPuff has raised $1.2 billion over 7 rounds, with the latest round being led by existing investor Accel.
Shoppers can order from goPuff through its website or mobile app for iOS and Android. After entering their delivery location, the customer is directed to the inventory and selection available from their local goPuff warehouse. They can then add items to their cart and pay online, similar to traditional digital order platforms.
Once an order is placed, warehouse workers are notified, pick the items from the warehouse shelves, and bag them. Bags are then held in bins specific to each driver, often grouping multiple deliveries to locations in close proximity when possible. Drivers then collect the bags from their bin and head out to complete the deliveries.
Shoppers are notified of each step in the delivery via playful, often customized text messages, and then called by the driver upon arrival. Since their vertically integrated delivery model cuts out the middleman, goPuff is able to deliver orders to customers as soon as they are received, usually taking around 15-30 minutes. goPuff is open around the clock, 24/7 in most locations; some smaller markets have working hours from noon to 4:30 am.
goPuff is open around the clock, 24/7 in most locations; some smaller markets have working hours from noon to 4:30 am.
goPuff is currently available in over 200 U.S. locations. Mainly operating in major cities, the service started targeting college students but has expanded its offering to appeal to young professionals and parents within a 30-minute drive radius. The company’s website even suggests that their followers should tweet at goPuff to make requests of where to begin delivering next, and that they will likely start evaluating the places where they receive the most support.
When launching a new location for expansion, the company’s representatives first look for large, reasonably priced warehouse space to run its operation. Once the warehouse location is secured, they begin to hire local, independent delivery drivers and cultivate relationships with regional suppliers and local brands.
goPuff, which started on a college campus, took the idea of marketing towards a younger audience and ran with it. This has proven to be a strong tactic for a company that wants to displace the convenience store industry, as a report by Technomic suggests that 51% of convenience store shoppers are millennials.
The average goPuff shopper is in their mid to late 20’s, but has expanded from targeting only students to including busy, career-focused individuals and parents. But regardless of the demographic, the platform is known to focus on creating a more personal connection between the brand and its audience. For this reason, goPuff is known for creating viral marketing campaigns like humorous product descriptions, pun-ny text notifications, eye-catching social media video content, bright public transportation advertisements and free branded swag included in first-time orders. Most shoppers tend to be repeat customers and engage with the brand through other channels, like Twitter and Instagram.
Not only this, but the co-founders have placed a strong emphasis on understanding their shoppers. Part of their marketing process is figuring out where customers are ordering from (i.e., dorm rooms, offices, libraries, parks), what time they are ordering, and what types of products they are ordering most so that they can adjust their tactics accordingly. While the company has no plans of selling their data at this time, it does have immense proprietary value.
From groceries and cleaning supplies to personal care items,snacks and, in select markets, alcohol — goPuff offers goods that are typically found in a c-store. Most goPuff locations have more than 3,000 products, sourced from more than 40 local and national suppliers, to choose from. Some of the service’s overall bestsellers include ice cream, seltzer, bags of chips, Plan B (morning-after pill) and plastic cups. This is because goPuff focuses on a few specific shopping occasions:
In some markets, goPuff also sells and delivers beer and alcohol, known as goBooze. However, these items come with a stricter identity confirmation policy and a 50% restocking fee if the shopper is underage.
The buyers at goPuff use the platform RangeMe to source new products for their service. (RangeMe is an application that is used by suppliers and buyers to help manage proposals, showcase items and build relationships.)
Brands that wish to sell on goPuff can do so by listing their products on RangeMe. Supplier profiles are free to make and allow brands to tailor product and company descriptions in a digital portfolio. Buyers are then recommended products that might be relevant to their market or are able to search and engage with brands directly.
The goPuff website also has a brand partnerships contact page for inquiries about sampling with the service.
In addition to being convenient, goPuff is also competitively priced. goPuff charges a $1.95 flat delivery fee. Recently the company started charging a $2.95 incremental fee if there’s alcohol in a customer’s cart. There is a minimum order amount of $10.
Frequent goPuff shoppers can opt to purchase a membership to become part of the “Fam.” The membership costs $5.95 per month and includes free delivery on every order.
Unlike other mobile delivery services, goPuff does not rely on delivery fees to make a profit. Because of this, delivery prices never surge based on times of high demand. In contrast, most of goPuff’s competitors have delivery fees around $5, which can vary based on volume and time of day.
While goPuff does somewhat overlap with other on-demand delivery apps, such as Instacart, Uber Eats and Postmates, its biggest competitors are stores with strong “convenience” offerings. Retailers likely feeling the pressure from this type of service include 7/11, Cumberland Farms, CVS, Walgreens and Wawa. The goal behind creating an offering like goPuff in the first place was to make daily life easier and physical convenience stores more obsolete.
goPuff is unique within the delivery service space as it has become the first and only offering to cut out the middleman, making it a literal “one-stop” shop. The supply chain factors that help contribute to this are:
This combination of factors results in a truly convenient and quick offering. Bottom line is that goPuff can sell the same products as their competitors and deliver it straight to the customer’s door, with even lower overhead costs.
There are quite a few reasons why brands should be taking goPuff seriously:
This is the type of attention CPG companies desperately need, and that goPuff can offer. Virtual shelf space, product categorization and targeted marketing campaigns are set up to help their brand partners become relevant and win in the millennial market.
| Service | # of markets | Delivery fees | Additional fees | Minimum order value | Average delivery speed | # of products per market |
| goPuff | ~150 | $1.95 per order or free with a Fam subscription of $5.95/month (which totals ~$72/year) | Optional tip for delivery drivers | $10 | 30 minutes | ~3,000 |
| Amazon Prime Now | ~100 | Free with an Amazon Prime subscription of $119/year | $8 for one hour delivery, $5 for orders under the minimum value, optional tip for drivers | $35 | 2 hours | ~10,000 |
The key for brands to take advantage of goPuff is to get noticed and stay relevant. Since goPuff is a limited selection retailer, the #1 hurdle is to be chosen for distribution, and not get rotated out. In order to be accepted into goPuff’s assortment, brands should focus on a few factors:
Once chosen as a supplier, brands should turn their focus to:
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