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Where are they now: instant-delivery edition.
Morning Brew June 21, 2022

Retail Brew

Route

Welcome back. It’s the first day of summer and the longest day of the year, which means more time to read today’s newsletter—maybe two times, or even three…

In today’s edition:

Erin Cabrey, Katishi Maake

DELIVERY

15 minutes of fame

Delivery bike fades from US map. Francis Scialabba

While a spate of rapid-delivery companies popped up—or at least gained momentum—during the pandemic, their bubbles might be bursting as demand dwindles and losses mount. Here’s a rundown of the most notable players and where they stand.

Jokr: The New York-based rapid-delivery startup last week said it’s ending operations in the US, where it has nine micro-fulfillment centers across Boston and New York, to focus on Latin America, per Bloomberg. The company also laid off 50 of its 950 workers worldwide.

CEO Ralf Wenzel told the outlet that the US has only made up 5% of its business. “Latin America is particularly underpenetrated and underserved, that’s why Jokr has put its focus and emphasis on the Latin American opportunity since the beginning,” he said in a statement.

  • In Latin America, Jokr loses under $10 million per month, according to Bloomberg.

Jokr, which opened its first US dark stores in June 2021, reached unicorn status in December when it raised $260 million at a $1.2 billion valuation. It also introduced a retail media platform in May as a new $$ channel.

Gorillas: After closing a $1 billion funding round in October, the company—founded in 2020—laid off half its staff (300 workers) in May and said it would exit Belgium, Denmark, Italy, and Spain. A spokesperson told Bloomberg last week that it’s also weighing proposals to shutter five warehouses in the UK.

  • In another unexpected move, the Germany-based startup introduced its own record label, Pedal Records, in February.

Getir: The Turkish company, founded in 2015, announced plans to cut 14% of its global staff (~4,480 people) in May, two months after scoring $768 million in funding at a $12 billion valuation.

  • Another rapid-delivery startup, 1520, ran out of money in December and closed up shop, directing shoppers to use Getir (which had not acquired 1520) instead.

Fridge No More: The startup, which debuted in October 2020, was in talks to sell some of its biz to DoorDash before it ultimately ceased operations in March. Per a Slack message CEO Pavel Danilov sent to employees, “Investors were concerned about growing competition and about bad order economics, i.e. each order brings losses to the company.”

Click here to keep reading.—EC

        

TOGETHER WITH ROUTE

Rub elbows with e-commerce pros

Route

For e-commerce merchants, all roads lead to Route Connect.

The premiere e-commerce event of the year is coming in hot—and it’s all going down on June 30 from 6–9:30pm ET. Tune in online and join some of the top names in the digital retail space as they reflect on this unique moment and plan for a bright future.

Panels will dig deep into relevant issues like growth, sustainability, and improving connection and customer experience. You’ll hear from founders, leaders, and creators at world-class brands like Fly by Jing, Supreme, and Inamorata.

Get inspired, get energized, and get ideas to help you build your e-commerce brand this year…and beyond.

Register for Route Connect and join the party on June 30.

BEAUTY

Skin in the game

Lip balm, lipstick, and a brush on marble columns Francis Scialabba

As masks have come off (for the most part), the beauty industry is seeing a glow-up.

Still fresh: Skin care, in particular, is on a tear, as nine in 10 consumers are expected to spend the same or more on it this year, compared to just six in 10 in 2020, according to an Alvarez & Marsal’s Consumer Retail Group survey of ~1,000 beauty customers.

  • Shoppers are also on the hunt for a bargain: The proportion of respondents who tried a new beauty brand because of promotions and/or discounts was 44% last year, as opposed to 25% in 2020.
  • But seven in 10 shoppers still said they spent more on beauty products in 2022 than only three in 10 in 2020.

As some trends become mainstays and others fade faster than lipstick (like being online-only), retailers need to focus on flexibility and responding to needs faster, the report notes. Nearly 90% of those surveyed said they had tried a new makeup brand in 2021 and were 2.6x more likely to try new brands because of product innovation.

The big picture: Target is already shedding pandemic-era inventory for more beauty products since that’s where the demand is, and Klover CEO Brian Mandelbaum recently told Retail Brew that beauty is very much a resilient category amid inflationary pressures.—KM

        

WHAT ELSE IS BREWING

  • Kellogg Company announced it would separate into three different companies: one focused on snacks, one on cereal, and one on plant-based foods.
  • Mondelez plans to acquire Clif Bar for $2.9 billion, in another major snack move.
  • Apple workers at a store near Baltimore voted to unionize, a first for the tech giant’s retail locations.
  • Starbucks’s head of North America, Rossann Williams, is leaving the coffee giant.

TOGETHER WITH AMAZON ADS

Amazon Ads

Gen Z went to the market…and had some sticker shock (who doesn’t these days?). To get a taste of adult Gen Zers’ shopping mindsets, we partnered with Amazon Ads on a fun quiz that reveals how they’re being mindful when filling up their carts, IRL and online. Take it now.

SWAPPING SKUS

Today’s top retail reads.

In high spirits: How Delta’s in-flight service program is helping some F&B startups take off. (ModernRetail)

What a steal: One culprit fingered for the rise in organized retail theft? “What fuels this as an enterprise is the ease of reselling stolen merchandise on online marketplaces,” Illinois Attorney General Kwame Raoul said. “It’s no longer the age where it’s done at flea markets or in the alley or in parking lots.” (CNBC)

Get that bread: How Tartine, a beloved San Francisco bakery, attempted to balance its artisanal identity with growth—driven, in part, by partnering with a real-estate company. (New Yorker)

Social shopping: It’s no secret that social media is an essential tool for retail marketers. Enter, Future Social: the Brew’s must-read weekly newsletter covering all things social media. Check it out.

Your back-to-school cheat sheet just dropped. Planning your retail brand’s approach to back-to-school season? Ziff Media Group’s new study guide, Back to School in 2022, is packed with the tips, insights, and stats your brand needs as you prepare for this fall’s return to school. Get it here.*

*This is sponsored advertising content.

TIME MACHINE

Barbie expansion in 2017 Mattel

This week, don’t read too fast, or you might get a brain freeze:

  • On June 20, 2017, Mattel introduced a Ken doll with a man bun, one of 15 new versions of Barbie’s pal with a variety of hairstyles, skin tones, and body types (slim, broad, and original—but not, sadly, extra crispy).
  • Exactly three years later, on June 20, 2020, Dreyer’s Grand Ice Cream, maker of Eskimo Pie frozen confections for nearly a century, announced it was changing the name because the company was “committed to being a part of the solution on racial equality, and recognize the term is inappropriate.” It was soon renamed Edy’s Pie.
  • On June 21, 2018, the Supreme Court closed the loophole that had allowed e-comm retailers to forgo collecting sales tax in states where they had no physical presence.
  • And on June 22, 1940, the first Dairy Queen opened in Joliet, Illinois, a couple years after two of its owners, J.F. McCullough and his son, Alex, claimed they developed a new twist on ice cream: soft-serve.

EVENTS

Dust off your expense reports

Dust off your expense reports

Ahhhh work travel, we've missed you . We love a conference, don't you? Free food, smart people with inspiring ideas...aspirational breakfast meetings.

Which brings us to Retail Brew's newest debut ::drumroll:: The Sku: A Retail Brew Summit. Here's what's on the agenda:

  • Meeting demand and maximizing profit
  • Managing your organization across channels
  • Creating omni-channel engagement with customer journeys
  • Sustainability: who is doing what and how
  • Using technology to drive sales

Early bird pricing ends soon! Register now to save your seat (and some $$). Only $499 for a limited time!

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Written by Erin Cabrey and Katishi Maake

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