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    Date submitted
  • 17-Oct-2017

DivvyUp Holdings, LLC

Abstract

DivvyUp provides free grocery delivery to college students. We offer hundreds of products on our website, including snacks, beverages, household items and fresh produce, and charge them at retail prices. We then purchase these products from wholesalers and deliver them directly to campus, distributing them in the quantities that students ordered. DivvyUp does not charge delivery fees or require minimum order size, and we believe that our company is the most convenient way for students to shop for groceries.

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Additional Questions

Who is your customer?

Our target customers are college students. We believe that our business adequately provides college students with an efficient and affordable way to buy groceries. While the total student population living on college campuses across the US is 2.7 million, we are currently targeting all 6,700 Duke University students in our first phrase.

What problem does this idea/product solve or what market need does it serve?

The process of going to the grocery store and buying groceries is often very inconvenient for students. Without a car, most students are left having to either walk or bike to the store and then lug their groceries back to the dorm rooms. This tedious process of buying groceries is painful and wastes time, which college students arguably value more than anything else. Other online grocery delivery services, such as Instacart, Google Express and Amazon Fresh, also waste time and money. They charge delivery or subscription fees, and their unpredictable delivery schedules force students to spend hours waiting in their dorm room. Thus, these delivery companies are not compatible with college students. Our company offers college students an alternative solution for the process of buying groceries, as we do not charge delivery or subscription fees and require no minimum order size.

What attributes will make this idea/product successful? Why do you believe that those features will create success?

In our current market where the demographic is mostly comprised of 18-22 year old undergraduate students, cost is the main driving force behind demand for a product or service. Thus, when analyzing our service compared to our competitors (Instacart, Amazon Fresh, Postmates, etc.) we feel that our product differentiates itself by being far and away the cheapest option offered to consumers. Whereas our competitors offer costly subscription services ($100-$300 annually) or steep delivery fees (on average ~ $6 an order), at DivvyUp we differentiated our service by establishing no subscription or delivery fees. The way we are able to accomplish this compared to our competition is that we choose markets that contain a highly concentrated amount of customers in a small, restricted area (i.e. a college campus or apartment complex). What this allows us to do is cut down on our variable labor costs for each delivery by delivering during a specific time slot and to a specific common area that is still convenient to the customer at no extra charge. We believe this model creates success by relying upon the concentrated living arrangements of our customers, thereby allowing our service to dedicate less labor cost per delivery compared to our competitors, which in turn allows us to deliver the product at no extra charge to the consumer while not cutting into our margins.

Explain how you (your team) will execute to make this idea/product successful? What gives you (your team) an advantage over others already in the market or new to this market?

Our team has the unique ability to make this venture a success, as we are the ones who have a deep and rare understanding of the market and the problem facing our customers. As Duke students, we understand what other Duke students must do to attain groceries on a weekly basis. We know how much Duke students are willing to pay for groceries, when they need groceries, what groceries they need, and how willing they will be to pay a delivery fee. The founders of DivvyUp not only have the unique ability to understand the target market, but also have the skills and connections necessary to scale this business. As three students with different majors, all in different fraternities, we are able to each reach out do different facets of Duke’s community and effectively market our product. We each think very differently and bring unique perspectives to every decision. We have gained a deep understanding of our product over the past two months of our beta launch. We understand how to best shop for the groceries, where to shop for the groceries, how to best divvy up the packaging, and how to deliver the groceries each week. Through the use of student labor, we are able to understand and model our growth as we open up to other campuses. We also have done significant website testing to determine what is most intuitive to our customers and how we can best organize our products. Grocery delivery is growing greatly in the United States. Almost any family in any location will be able to receive their groceries via delivery in the next few years. Although this sector is booming, it has not yet been able to effectively enter the market of college students. Prior to the founding of DivvyUp, none of the founders of the company knew anyone on Duke’s campus who used grocery delivery. Although most students knew that there were many providers of this service, no provider was able to provide enough of a value proposition to college students to crack the market. DivvyUp is unique as it has been able to crack the market by eliminating all the hurdles stopping students from using grocery delivery (fees, order size, delivery window).