Morning Brew - ☕ After one’s own cart

US delivery platforms overcame high food prices for promising second quarters
Morning Brew August 23, 2022

Retail Brew

Loop TV

It’s Tuesday, and Bang Energy is still a free agent as Keurig Dr Pepper has denied interest in acquiring the energy-drink company’s owner. Our dreams of seeing “Bang Energy Keurig Dr Pepper” on corporate signage will have to wait.

In today’s edition:

—Erin Cabrey, Maeve Allsup, Matty Merritt

PAYMENTS

Rolling in the aisles

Rolling in the aisles Gif: Dianna “Mick” McDougall, Source: Mviamonte/Getty Images

For years, grocers have been looking for the perfect way to make checkout frictionless because, in case you haven’t heard, consumers don’t love self-checkout (and many have been rooting for its demise).

Amazon’s Just Walk Out technology was presented as the next-gen checkout solution when it debuted at a Seattle Amazon Go store in 2018. That’s the same year Shariq Siddiqui—formerly head of product at Amazon, where he led the integration of Alexa to brick-and-mortar retailers—left the e-commerce giant to found smart-cart startup Veeve, essentially a “POS on wheels.” He was armed with validation that consumers were eager to skip the checkout line, as well as critiques of the slow-growing Just Walk Out tech.

“The challenges that I saw with Amazon Go was just scaling—both from a technology perspective, as well as from the economic side of things,” he said. “And so really, the idea was: could you effectively build Amazon Go-like technology and add a shopping cart?”

Several smart-cart startups (smart-cartups?) have rolled onto the scene in recent years, along with Amazon itself. But despite buzzy partnerships with major grocers, like Kroger and Albertsons, you’re still unlikely to find a high-tech shopping cart at a grocery store near you. So are smart carts the savior to deliver us from the self-checkout vitriol, or what?

Across the aisle: Albertsons and Veeve see the smart cart as an opportunity to bring “the ease and integration of e-commerce right to the grocery cart,” Alyse Wuson, senior director of digital transformation at Albertsons Companies, said in a statement in May, bringing the online experience to where grocery stores make the bulk of their transactions.

“When you add an item to your Amazon cart, there is a lot of recommendations, upsell, cross-sell promotions—all of those capabilities are now being built into the cart directly,” Siddiqui said. “Customers feel like they are buying something in a physical environment, but they’re still able to interact with technology to enhance the customer experience.”

Keep reading for the challenges smart carts may face as they roll forward.—EC

        

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DELIVERY

Bring home the bacon

Florida, Miami, restaurant cashier with signs for food delivery services... Jeff Greenberg/Getty Images

There’s no way around it—food prices are high at the moment. But that doesn’t seem to have slowed food and grocery delivery platforms this quarter.

“A major question that investors are asking themselves is: how will these delivery platforms hold up in a higher inflationary environment?” Bernie McTernan, senior analyst at Needham, told Retail Brew. The answer? “So far, pretty good.”

  • DoorDash reported a 23% growth in orders over last year and 30% revenue growth.
  • Uber, which owns Postmates, Uber Eats, and Drizly, said order frequency was up 4%, while active merchants and couriers grew 17% and 34%, respectively.
  • While Just Eat (European owner of Grubhub) reported a 10% drop in North America orders during the first half of the year, the company’s stock price jumped 40% on August 19 after it announced the sale of its shares in Latin American delivery app iFood for $1.8 billion. Just Eat is also actively exploring full or partial sale of Grubhub, which it acquired last year, the company said.

Growth points: McTernan said his top Q2 takeaway is the strong growth of DashPass, DoorDash’s paid membership that includes free delivery, as well as chances for membership participants to earn credits on certain pickup orders.

Keep reading here.MA

        

RETAIL

Plug and play

Stars coffee logo of siren in brown in Russia. Anadolu Agency/Getty Images

Starbucks knockoffs will open throughout Russia over the next couple of months, reports Matty Merritt for Morning Brew:

Before it joined the exodus of over 1,000 other companies, Starbucks had a presence in Russia for 15 years. Now that it’s gone, Timati, a pro-Putin rapper, partnered with restaurateur Anton Pinksy in July to buy the 130 empty locations and track down new suppliers. They also created the…kind of new logo.

Keep reading here.

        

FROM THE CREW

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Business education without the BS

What if you could anticipate what a customer wants to buy before they even knew it? Learn to use data to forecast the future with the Brew’s Business Analytics Accelerator, starting in two weeks. Apply today!

SWAPPING SKUS

Today’s top retail reads.

Extra, extra: Manhattan’s Herald Square, once a prime area for shoppers, sits with half of its store space empty. (The City)

Royal tastes: The cellar master for Louis XIII cognac, Baptiste Loiseau, says that he works with a “tasting committee” to decide if blind-tasted samples are “rich” and “elegant” enough for the “potential of aging.” (Monocle)

Securing the bag: Bread clips aren’t alive, nor do they independently reproduce, but as Jeremy Glass writes for Gawker, they sure can “grow on you.” (Gawker)

WHAT ELSE IS BREWING

  • Macy’s cut its full-year forecast, anticipating decreased consumer spending.
  • Dick’s Sporting Goods beat Wall Street estimates for second-quarter earnings.
  • Ben & Jerry’s lost a bid to block parent company Unilever from selling ice cream in the West Bank.
  • Unite, a UK-based union, says 1,900 members will participate in a worker strike at the nation’s largest container port, Felixstowe, reports the BBC.

TIME MACHINE

What happened in the world of retail this week in…1837 and beyond? Retail Brew takes you way, way, way back.

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Written by Erin Cabrey, Maeve Allsup, and Matty Merritt

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