2PM - Memo: Webvan (Again)

Gopuff's current concerns / Intro: There is an operative sentence in the detailed report on the instant delivery industry’s current woes: “The Gopuff founders knew little of this history.” Here is a quick recap of 1998 through 2001:

Many remember the rise and fall of first-mover Webvan. At its peak it maintained a $178.5 million run rate with close to $530 million in expenses. It offered customers the ability to have orders delivered within a 30 minute window and operated in 26 markets. In 1999, a company called Kozmo maintained a run rate of $3.5 million with a net loss of $26.3 million after raising $250 million (to include $60 million from Amazon). In both cases, it was growth that hindered Webvan and Kozmo. Webvan even contracted the construction of $1 billion-plus in warehouses prior to going out of business. (Read More...)

The Fantasy of Instant Delivery is Imploding

Source No. 1 / Bloomberg: It’s also the kind of instant gratification business that for a brief moment in recent years seemed to have the potential to change e-commerce forever. “We’d build a plan and they’d [investors would] say you’re not spending enough,” Ilishayev says. “It’s easy to get caught up when you’re having a lot of things go right.”

Gopuff is part of a class of startups that soared during the pandemic, trying to solve a logistics and math puzzle that’s dogged Silicon Valley for decades: Can an e-commerce company whisk products to your house in under an hour? And more important: Can it actually make money doing so?

Shrinking basket a size for online grocers

Source No. 2 / PYMNTS: Like all retailers and brands right now, online grocers are trying to navigate a tricky inflationary environment, albeit one with a unique twist as it pertains to a reduction in buying groceries online. As Scott Crawford, chief merchandising officer at FreshDirect, explained to PYMNTS, the confusion stems from the fact that while food costs are up, basket size is not.

The new DTC Power List was updated for October 24 with new data for 700 companies; the list his been re-adjusted to measure historical performance. Join here to gain access to this growing list. 

Warby Parker plans hundreds of more stores

Heritage DTC / CNBC: Founders Neil Blumenthal, David Gilboa, Andrew Hunt and Jeffrey Raider, who met as classmates at the University of Pennsylvania Wharton School of Business, saw that large retailers like EssilorLuxottica, which owns brands including Ray-Ban, dominated the eyeglass industry and marked up prices by hundreds of dollars. Fighting back against these high price tags, Warby Parker marketed their frames, including lenses, starting at $95.

Shein's new resale platform won't quell sustainability complaints

eCommerce / Quartz: Ultra fast-fashion player Shein is launching a resale platform even as criticism intensifies over its unsustainable practices. The Chinese company is rolling out Shein Exchange, a platform that allows users to buy and sell pre-owned Shein clothing on its app. It will launch first in the US and later expand to other markets.

From Fast, Faster, Fastest Fashion: What will solve fashion’s Shein problem is not donations, public relations, or acknowledgements of wrong-doing. The more fruitful solution will be social media trending away from fast fashion and towards sustainability.

Rimowa and Rtfkt unveil luxury phygital luggage collab

Web3 / Vogue Business: This article is part of our Vogue Business Membership package. To enjoy unlimited access to Member-only reporting and insights, our NFT Tracker and TikTok Trend Tracker, weekly Technology and Sustainability Edits and exclusive event invitations, sign up for Membership . Remember Rimowa's collaboration with hip streetwear brand Supreme in 2018?

Amazon will now gladly take Venmo

Fintech / Gizmodo: Venmo users unsure what to do with that extra change sitting in their account now have a new option: they can blow it on nonsense from Amazon. Starting this week, Amazon will officially accept Venmo as a payment option on both its website and mobile app.

This obscure shopping app is now America's most downloaded

eCommerce / MIT: It’s a pretty big deal for Temu to beat Amazon, Walmart, and its Chinese competitor Shein, especially because your immediate response is probably What? I’ve never even heard of Temu!  Well, you are in good company. The app remains obscure among most people, though it marks another high-profile attempt by yet another Chinese tech giant—after Alibaba, Shein, and ByteDance—to try its luck in the American e-commerce market. 

Brand building requires a large and sustained presence

Omnichannel / AdWeek: The combination of easily optimized, digital sales activation channels with cost-efficient distribution has created a new breed of rapid-growth DTC companies that fill niche gaps left by larger, hard-to-transition CPG organizations. Many of these DTC and rapid-growth companies have found great success prioritizing sales activation messaging alone.

Re-read: A CPG Epiphany

Metaversal Struggles / Open Memo: This is a question raised within the boardrooms of tech companies and retail brands. The answer may be simple enough: the American consumer is preoccupied with real world problems. The metaverse is here but we’re not ready. In 2020, our report “Enter the Metaverse” asked a key question:

Can a company build a Metaverse or does it simply manifest?

When Facebook rebranded to Meta, with intentions to go all-in on the metaverse, it was known then it would be a years-long transition. Perhaps the Meta leadership didn’t envision 9% inflation, falling consumer confidence, layoffs at some of the largest corporations in America, and high interest rates bringing the housing market to a halt. In the same report from nearly three years ago, we mentioned timing as an essential ingredient. (Read More...)