|
|
|
|
UNLOCKED: Two New Shocks for American Shopping. From one angle, all-American consumerism is on full display as in normal times: throngs of people struggling to steer overflowing trolleys in a straight line. Retail sales (excluding cars) rose at a seasonally adjusted rate of 1.8% in August, compared with July, the fastest monthly rate since March. Other images, however, look distinctly unAmerican. To their horror, some shoppers discover empty shelves where their favourite brands of biscuits, detergents, pet food and loo roll typically reside — the result of supply-chain disruptions as outbreaks of the infectious Delta variant of covid-19 shut factories and ports around the world.
Editor's Note: I found it interesting to read about America's supply chain concerns through international eyes. It is consistent with what many in the supply chain and logistics world have been attempting to amplify over the previous weeks.
In July, 2PM published Logistics Takes Center Stage as a first attempt to understand the magnitude of the issue at hand. This was followed up with a more specific look at the effects of short supply in our favorite marketplaces (read: Out of Stock). And lastly is the unlocked special report that we just published Friday. It's a forward-thinking perspective on how this supply chain fiasco may impact our long-term strategies around imports and exports. Space anyone?
|
|
|
On the Misfits Market / Bloomberg: The company said it has experienced “tremendous” growth this year, but declined to give specific revenue numbers. Misfits said that the average order size is now above $52, more than doubling from when the business launched. Food inflation has helped the company draw even more customers because its simpler supply chain has helped it curtail price increases, Ramesh said.
Short Analysis: Misfits sells produce, pantry items and meats that are safe to eat but otherwise would go to waste at a discount. Pandemic-related forces, including job loss and a shift to shopping online, helped grow the business, which focused on suburban and rural customers – and not the urban customers who typically have first access to delivery services. Misfits will use its latest round to expand to more states and additional categories.
The growth of the Misfits Market is an indication of the grocery industry’s democratization. While grocery eCommerce was slow to catch on, the segment is now exploding with innovation. It’s given companies who want to rethink how we consume food and beverages a chance to build enterprise sized marketplaces despite the competition from companies like Walmart, Target (Shipt), and Instacart. Of the most interesting DTC competitors is Misfits Market which aims to appeal to all of the parts of the country that have been without last-mile grocery delivery. The company recently raised $200 million to eliminate food deserts by 2025.
“We work directly with farmers and suppliers to rescue organic produce and other grocery items that might otherwise go to waste,” the company explained in a blog post revealing the expansion. “By eliminating some of the inefficiencies in our food system, we’re able to do more than just reduce costs. Every Misfits Market box you order benefits farmers, prevents food waste and ultimately helps save our environment.”
You can read more from the quote's source here. Meanwhile, another marketplace is making waves. Chicago-based Foxtrot is going national with its delivery model, though its approach is different. The local delivery operation has partnered with Snaxshot in an effort to curate snacks and other CPG products for a national audience. The deal between the two will showcase brands and products not sold in typical stores to customers in a Snaxshot curated box. While consumers are beginning to take note of smaller grocery marketplaces like these, let's be real. Walmart, Instacart, and Target are in an immovable position as market leaders. But if we have seen anything, this market competition is in its early seasons.
By Web Smith and Hilary Milnes
|
|
|
DTC Brands / Business Insider: Eric Prum and Josh Williams broke into the DTC world in 2012 by crowdfunding their first products. Now, they're looking to acquire brands under Very Great, the DTC roll-up they've launched since. They predict that consolidation is coming to the DTC world after an explosion of new brands.
|
|
|
Retail Real Estate / Retail Dive: For 2021, Knix is jumping back into the game with plans for four store openings, three in California and one in Ottowa, Canada, to expand its fleet there. The Ottowa store will open by the end of the year, but the other three are planned for this fall. The Santa Monica store, which opens first, will be a 2,500-square-foot space, with an equal amount of outdoor space to host events and use for community building.
|
|
Highlights: Learn more about Shopify and Yotpo's deepened connections. Last week, Yotpo VP of Product Marketing Rosa Hu announced a multi-year platform partnership that will "create a deeper integration between our technologies, enabling us to accelerate the development of innovative marketing solutions for brands."
This is a 2PM advertisement.
|
|
|
eCommerce / Wall Street Journal: Merchants take no credit risk with these plans, but the fees they incur can be higher than on credit-card purchases — often between 3% and 5% of the purchase price, according to people familiar with the matter. Buy-now-pay-later companies say they can approve more customers than banks, including people who have thin or no borrowing history. Some 53 million adults in the U.S. lack traditional credit scores, according to FICO score creator Fair Isaac Corp.
|
|
|
Gaming and Commerce / Digiday: The lack of standardization across the industry, Madden said, is “a huge barrier to success. That’s why most of the brand interaction that you see in big games is custom work.” The existence of a basic shared framework for gaming advertising, both in-game and through activations on platforms like Twitch and Youtube, could help shepherd more non-endemic brands into the space.
By 2PM: Our take on this is here. Read Spiritual Opium and gCommerce for a solid primer.
|
|
|
Supply Chain / Glossy: For a new brand like Collars & Co., the first holiday season can help make or break the brand. With demand for Collars & Co. increasing by 40% every month, the brand is getting prepared. Baer said he’s been buying extra inventory every month and setting it aside for the holiday season, in anticipation of facing difficulties in getting what he needs when November and December roll around.
|
|
|
DTC / TechCrunch: In DTC, how companies decide their omnichannel strategy depends on how well they know what their customers’ choices are and what their ideal strategy will be. In many transactions, constraints are actually good forcing functions — they narrow down choices and help you arrive at an equilibrium faster and cheaper.
Editor's Note: this is behind a paywall but it is really good. The TechCrunch subscription is worth your time.
|
|
|
eCommerce / Fast Company: Art investment funds have existed for over a century. Masterworks, however, has put a new twist on an old practice, in that the platform allows individuals to buy shares of specific artworks in $20 increments. Investors can then sell these shares in an easy-to-use secondary market or wait until Masterworks sells the piece and receive pro-rata proceeds.
|
|
|
Economics / Michael Dempsey: Metas of investing in existing, more mature asset classes will evolve or look entirely novel, while newer asset classes will cycle through many primitives quickly. Because of this, as an investor, conviction in your process and understanding of your time horizon will be more important than ever. But in the end, perhaps what will mark investing in risky asset classes in the 21st century won’t be the optimization of a specific process or approach, but instead the ability to be novel and adjust to these dynamics over time.
|
|
Think of the pandemic restrictions required to shop in a grocery store. The lines are longer, you’re more uncomfortable, aisles are emptier than usual, and labor is shorthanded. The simple function of shopping for goods and services is no longer efficient in many places. Now, multiply this inefficiency by 1,000 and you have the global shipping crisis in need of a long-term solution.
The National Retail Federation reported that the “US retail industry directly employs about 29 million people and supports more than 42 million jobs.” Without a solution, I fear that America’s economic engine (the trade of consumer goods) will begin to permanently fracture this enormous percentage of America’s existing employment.
Read The Unlocked Special Report
|
|
|
|
|
|
|
|
