Mercato raises $26M Series A to help smaller grocers compete online

The pandemic upended the way people shop for their everyday needs, including groceries. Online grocery sales in the U.S. are expected to reach 21.5% of the total grocery sales by 2025, after leaping from 3.4% pre-pandemic to 10.2% as of 2020. One business riding this wave is Mercato, an online grocery platform that helps smaller grocers and speciality food stores get online quickly. After helping grow its merchant sales by 1,300% in 2020, Mercato has now closed on $26 million in Series A funding, the company tells TechCrunch.

The round was led by Velvet Sea Ventures with participation from Team Europe, the investing arm of Lukasz Gadowski, co-founder of Delivery Hero. Seed investors Greycroft and Loeb.nyc also returned for the new round Gadowski and Mike Lazerow of Velvet Sea Ventures have also now joined Mercato’s board.

Mercato itself was founded in 2015 by Bobby Brannigan, who had grown up helping at his family’s grocery store in Brooklyn. But instead of taking over the business, as his Dad had hoped, Brannigan left for college and eventually went on to bootstrap a college textbook marketplace, Valore Books, to $100 million in sales. After selling the business, he returned his focus to the family’s store and found that everything was still operating the way it had been decades ago.

Image Credits: Bobby Brannigan of Mercato

“He had a very basic website, no e-commerce, no social media, and no point-of-sale system,” explains Brannigan. “I said, ‘I’m going to build what you need.’ This was my opportunity to help my dad in an area that I knew about,” he adds.

Brannigan recruited some engineers from his last company to help him build the software systems to modernize his dad’s store, including Mercato’s co-founders Dave Bateman, Michael Mason, and Matthew Alarie. But the team soon realized could do more than help just Brannigan’s dad — they could also help the 40,000 independent grocery stores just like him better compete with the Amazon’s of the world.

The result was Mercato, a platform-as-a-service that makes it easier for smaller grocers and speciality food shops to go online to offer their inventory for pickup or delivery, without having to partner with a grocery delivery service like Instacart, AmazonFresh or Shipt.

The solution today includes an e-commerce website and data analytics platform that helps stores understand what their customers are looking for, where customers are located, how to price their products, and other insights that help them to better run their store. And Mercato is now working on adding on a supply platform to help the stores buy inventory through their system, Brannigan notes.

“Basically, the vision of it is to give them the tech, the systems, and the platform they need to be successful in this day and age,” notes Brannigan.

He likens Mercato as a sort of “Shopify for groceries,” as it gives stores their own page on Mercato where they can reach customers. When the customer visits Mercato on the web or via its app, they can enter in their zip code to see which local stores offer online shopping. Some stores simply redirect their existing websites to their Mercato page, as they can continue to offer other basic information, like address, hours, and other details about their stores on the Mercato-provided site, while gaining access to Mercato’s over 1 million customers.

However, merchants can also opt for a white-label solution that they can plug into their own website, which uses their own branding.

The stores can further customize the experience they want to offer customers, in terms of pickup and delivery, and the time frames for both they want to commit to. If they want to ease into online grocery, for example, they can start with next-day delivery services, then speed thing up to same-day when they’re ready. They can also set limits on how many time slots they offer per hour, based on staffing levels.

Image Credits: Mercato

Unlike Instacart and others which send shoppers to stores to fill the orders, Mercato allows the merchants themselves to maintain the customer relationship by handling the orders themselves, which they can receive via email, text or even robo-phone calls.

“They’re maintaining that relationship,” says Brannigan. “Usually, it’s a lot better if it’s somebody from the store [doing the shopping] because they might know the customer; they know the kind of product they’re looking for. And if they don’t have it, they know something else they can recommend — so they’re like a really efficient recommendation engine.”

“The big difference between an Instacart shopper and the worker in the store is that the worker in the store understands that somebody is trying to put a meal on the table, and certain items could be an important ingredient,” he notes. “For the shoppers at Instacart, it’s about a time clock: how quickly can they pick an order to make the most money.”

The company contracts with both national and regional couriers to handle the delivery portion, once orders are ready.

Mercato’s system was put to test during the pandemic, when demand for online grocery skyrocketed.

This is where Mercato’s ability to rapidly onboard merchants came in handy. The company says it can take stores online in just 24 hours, as it has built out a centralized product catalog of over a million items. It then connects with the store’s point-of-sale system, and uploads and matches the store’s products to their own database. This allows Mercato to map around 95% of the store’s products in a matter of minutes, with the last bit being added manually — which helps to build out Mercato’s catalog even further. Today, Mercato can integrate with virtually all point-of-sale (POS) solutions in the grocery market, which is more than 30 different systems.

As customers shop, Mercato’s system uses machine learning to help determine if a product is likely in stock by examining movement data.

“One of the challenges in grocery is that most stores actually don’t know how many quantities they have in stock of a product,” explains Brannigan. “So we launch a store, we integrate with the POS. And with the POS we can see how quickly a product is moving in-store and online. Based on movement, we can calculate what is in stock.”

This system, he says, continues to get smarter over time, too.

“We’re certainly three to five years ahead, and we’re not going back,” says Brannigan of the COVID impacts to the online grocery business. “It’s very plentiful now in many places, in terms of e-commerce offerings. And the nature of retail businesses is competitive. So if 1% of people are online, it might not drive other people. But if you have 15% of stores online, then other stores have to get online or they won’t be able to compete,” he notes.

Mercato generates revenue both from its consumer-facing membership program, with plans that range from $96/year – $228/year, depending on distance, and from the merchants themselves, who pay a single digit percentage transaction fee on orders — a lower percentage than what restaurant delivery companies charge.

The company has now scaled its service to over 1,000 merchants across 45 U.S. states, including big cities like New York, Chicago, L.A. D.C., Boston, Philadelphia, and others.

With the additional funding, Mercato aims to expand its remotely distributed team of now 80 employees, as well as its data analytics platform, which will help merchants make better decisions that impact their business. It also plans to refresh the consumer subscription to add more benefits and perks that make it more compelling.

Mercato declined to share its valuation or revenue, but as of the start of the pandemic last year, the company had said it was reaching a billion in sales and a $700 million run rate.

#e-commerce, #ecommerce, #funding, #grocery-store, #lukasz-gadowski, #machine-learning, #online-grocery, #online-shopping, #retailers, #shopping, #startups, #supermarkets, #velvet-sea-ventures

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Bank of America is bringing VR instruction to its 4,000 banks

As consumer VR begins to have a moment following years of heavy investment from Facebook and other tech giants, corporate America is similarly beginning to find more utility in the technology, as well.

Bank of America announced today that they’ll be working with Bay Area-based VR startup Strivr to bring more of their workplace training into virtual reality. The financial institution has already used the startup’s tech in a pilot effort with about 400 employees, but a wide-scale rollout means scaling the VR learning platform to more of the company’s 45,000 employees and bringing thousands of VR headsets to its bank branches.

Bank of America exec John Jordan has plenty of ideas of where it will be able to implement the technology most effectively, but is open to experimenting early-on, noting that they’ve developed VR lessons for everything from notary services to fraud detection. Jordan also says that they’re working on more ambitious tasks like helping employees practice empathy with customers dealing with sensitive matters like the death of a relative.

Jordan says the scope of the company’s corporate learning program “The Academy” is largely unmatched among other major companies in the U.S., except perhaps by the employee instruction programs at Walmart, he notes. Walmart has been Strivr’s largest customer since the startup signed the retail behemoth back in 2017 to bring VR instruction to their 200 “Walmart Academy” instruction centers and all Walmart stores.

Virtual reality is a technology that lends itself to capturing undivided attention, something that is undoubtedly positive for increasing learning retention, which Jordan says was one of the central appeals for adopting the tech. For Bank of America, VR offers a platform change to reexamine some of the pitfalls of conventional corporate learning. At the same time, they acknowledge that the tech isn’t a silver bullet and that are plenty of best practices for VR that are still unknowns.

“We’re just taking it slow to be honest,” Jordan says. “We already feel pretty great about how we’ve made investments, but we view this as a way to get better.”

Enterprise VR startups have seen varying levels of success over the years as they’ve aimed to find paying customers that can tolerate the limitations of the technology while buying in on the broader vision. Strivr has raised over $51 million, including a $30 million Series B last year, as it has aimed to become a leader in the workplace training space. CEO Derek Belch tells TechCrunch that the company has big plans as it looks towards raising more funding and works to build out its software toolsets to help simplify VR content creation for its partners.

 

 

#america, #bank, #bank-of-america, #ceo, #facebook, #leader, #retailers, #strivr, #tc, #united-states, #virtual-reality, #vr, #walmart

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Amsterdam’s Crisp, an online-only supermarket, raises €30M Series B led by Target Global

Crisp, an Amsterdam-based, online-only supermarket focused on fresh produce, has raised €30 million in a Series B financing led by leading Target Global and joined by Keen Venture Partners and the co-founders of Adyen and Takeaway.com. Crisp has now raised a total of €42.5 million to date. It plans to use the money to expand in the Netherlands, and eventually across Europe.

Crisp says its USP is seasonal products sourced directly from 600+ small and high-quality producers at an affordable price in the Netherlands. Customers order through a smartphone app and deliveries are the next day within a 1-hour time slot. It also uses a 100% electric fleet serving big cities and suburbs, and its model is to have zero food waste.

The European grocery market is currently worth €2 trillion, but access to customers for high-quality, smaller producers is still tricky and blocked by incumbents. Crisp is taking advantage of consumers moving online, and wanting fresher food.

Tom Peeters, CEO and co-founder of Crisp, told my via online interview that “the differentiation on our model is that we offer quality and convenience. So, fish is super fresh fruits and produce is super fresh, etc. We basically stay away from the standard supermarket proposition that everything is always there, and you manage long shelf life. We’d rather build a very short chain sourcing directly at the source and bringing it in a very convenient way to you.”

He said it’s not a 15 minute delivery but the next day in order to ensure freshness. “The typical customer is a young family. An average order is 45 products and rather than offering all the brands, we on-boarded the long-tail of food producers in our digital marketplace, so we sourced from over 600 sources of food.”

He said: “Food in Holland is 40 billion euros, in Germany it is 200 billion. I think Europe combined it’s over two or 3 trillion. So that means basically we don’t need to spread thin over many countries in order to build a healthy business, not just healthy products, so we make money on every customer order.”

Founded in 2018, by serial entrepreneurs Tom Peeters, Michiel Roodenburg and Eric Klaassen Crisp claims to be now one of the fastest-growing supermarkets in the Netherlands, with a seven-fold in sales in 2020 and more than 85% of sales coming from repeat customers, it says.

Bao-Y van Cong, Investment Director at Target Global, headquartered in Berlin, said: “Crisp is building a world-class technology platform that is of value to both consumers and producers. The way we buy our food has not changed a lot since the 1950’s, creating inefficiencies in quality, affordability, and convenience. Crisp reflects the changing relationship that consumers today have with food: The European market for grocery shopping is starting to move online fast, super-accelerated by the pandemic. At the same time, we see a massive surge in demand for fresh and transparently sourced food.”

#adyen, #amsterdam, #berlin, #europe, #food, #food-waste, #germany, #grocery-store, #netherlands, #retailers, #shopping, #smartphone, #supermarkets, #takeaway-com, #target-global, #tc

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Walmart drops the $35 order minimum on its 2-hour ‘Express’ delivery service

In a move designed to directly challenge Amazon, Walmart today announced it’s dropping the $35 minimum order requirement for its two-hour “Express” delivery service, a competitor to Amazon’s “Prime Now.”  With Walmart Express Delivery, customers can order from Walmart’s food, consumables or general merchandise assortment, then pay a flat $10 fee to have the items arrive in two hours or less.

The service is useful for more urgent delivery needs — like diapers or a missing ingredient for a recipe, SVP of Customer Product, Tom Ward, noted in an announcement. They’re not meant to sub in for larger shopping trips, however — Express orders are capped at 65 items.

Today, Express Delivery is available in nearly 3,000 Walmart stores reaching 70% of the U.S. population, Walmart says. It builds on top of stores’ existing inventory of pickup and delivery time slots as a third option, instead of giving slots away to those with the ability to pay higher fees.

Like Walmart’s grocery and pickup orders, Express orders are shopped and packaged for delivery by Walmart’s team of 170,000 personal shoppers and items are priced the same as they are in-store. This offers Walmart a potential competitive advantage against grocery delivery services like Instacart or Shipt, for example, where products can be priced higher and hurried or inexperienced shoppers aren’t always able to find items or search the back, having to mark them as “out of stock.”

In theory, Walmart employees will have a better understanding of their own store’s inventory and layout, making these kind of issues less common. It will also have direct access to the order data, which will help it better understand what sells, what replacements customers will accept for out-of-stocks, when to staff for busy times, and more.

In addition to grocery delivery, Express Delivery competes with Amazon’s Prime Now, a service that similarly offers a combination of grocery and other daily essentials and merchandise. Currently, Prime Now’s 2-hour service has a minimum order requirement of $35 without any additional fees in many cases — though the Prime Now app explains that some of its local store partners will charge fees even when that minimum is met, and others may have higher order minimums, which makes the service confusing to consumers.

Walmart’s news comes at a time when Amazon appears to be trying to push consumers away from the Prime Now standalone app, too.

When you open the Prime Now app, a large pop-up message informs you that you can now shop Whole Foods and Amazon Fresh from inside the Amazon app. A button labeled “Make the switch” will then redirect you. Meanwhile, on Amazon’s website touting Prime’s delivery perks, the “Prime Now” brand name isn’t mentioned at all. Instead, Amazon touts free same-day (5 hour) delivery of best sellers and everyday essentials on orders with a $35 minimum purchase, or free 2-hour grocery delivery from Whole Foods and Fresh.

When asked why Amazon is pushing Prime Now shoppers to its main app, Amazon downplayed this as simply an ongoing effort to “educate” consumers about the option.

Walmart, on the other hand, last year merged its separate delivery apps into one.

After items are picked, Walmart works with a network of partners, including DoorDash, Postmates, Roadie, and Pickup Point, as well as its in-house delivery services, to get orders to customers’ doorsteps. This last-mile portion has become an key area of investment for Walmart and competitors in recent months — Walmart, for example, acquired assets from a peer-to-peer delivery startup JoyRun in November. And before that, a former Walmart delivery partner, Deliv, sold to Target.

This is not the first time Walmart has dropped order minimums in an attempt to better compete with Amazon and others.

In December, Walmart announced its Prime alternative known as Walmart+ would remove the $35 minimum on non-same day Walmart.com orders. But it had stopped short of extending that perk to same-day grocery until now.

To some extent, Walmart’s ability to drop minimums has to do with the logistics of its delivery operations. Walmart has been turning more its stores into fulfillment centers, by converting some into small, automated warehouses in partnership with technology providers and robotics companies, including Alert Innovation, Dematic and Fabric.

And because its stores are physically located closer to customers than Amazon warehouses, it has the ability to deliver a broad merchandise selection, faster, while also turning large parking lots into picking stations — another thing that could worry Amazon, which is now buying up closed mall stores for its own fulfillment operations. 

Walmart today still carries a $35 minimum on other pickup and delivery orders and same-day orders from Walmart+ subscribers.

#amazon, #ecommerce, #food, #grocery-store, #instacart, #prime, #prime-now, #retailers, #shipt, #target, #united-states, #walmart, #whole-foods

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Atlanta startups have another venture fund to tap as Silicon Road Ventures closes on $31 million

Atlanta startups can now add another name to their rolodexes of venture firms operating out of the Big Peach with the close of Silicon Road Ventures new $31 million fund.

Silicon Road invests across the U.S. from its base in Atlanta, the firm said with a focus on e-commerce, retail, and consumer packaged goods.

The firm said it’s focused on in-store retail and technology for shoppers, the multi-channel commerce world, supply chain and logistics technologies and financial technologies and payments.

Founded two years ago, the fund invested in ten startups over the course of 2020 and is targeting another twenty for its first fund.

The firm hopes that entrepreneurs find its “corporate connect” program to be a key differentiator, which relies on founder and managing partner Sid Mookerji’s experience in e-commerce, retail and consumer packaged goods to link corporations to relevant startups and research, according to a statement.

Silicon Road is already working with the upstart retail chain Citizen Supply, which provides a highly curated marketplace to showcase new consumer brands.

Mookerji previously founded Software Paradigms International Group, which was one of the first retail IT companies offering a suite of products designed to optimize omni-channel strategies. The company’s clients included Macy’s, Walmart, Carrefour, and NAPA.

Joining Mookerji is managing director and partner, Ross Kimbel, a former co-founder of Be Curious Partners and a global director of innovation and entrepreneurship at The Coca-Cola Company. curated engagements between portfolio companies and major retailers and brands.

The company’s current portfolio includesPerchToucan AIWeStockSoftWear AutomationPatronPull LogicTurnSymTrainEveryware, and Wripple.

#atlanta, #carrefour, #co-founder, #e-commerce, #entrepreneurship, #macys, #managing-partner, #private-equity, #retail, #retailers, #startup-company, #supermarkets, #supply-chain, #supply-chain-management, #tc, #united-states, #walmart

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Good Eggs raises $100M and plans to launch in Southern California

Grocery delivery startup Good Eggs is announcing that it has raised $100 million in new funding, and that it’s planning to launch in Southern California in either the summer or fall of this year.

Parts of this story might sound familiar to readers familiar with Good Eggs — when the startup raised its most recent, $50 million funding round in 2018, CEO Bentley Hall also mentioned plans for geographic expansion.

It seems, however, that the company has found plenty of opportunity for growth while remaining focused on the San Francisco Bay Area. Good Eggs says that in the past year, revenue has grown to the nine figures (more than $100 million), hired more than 400 employees and nearly doubled its customer base.

Hall also noted that the company opened a new, larger warehouse in Oakland just a few days before shelter-in-place orders took effect last March. So the team was busy enough trying to operate a new warehouse, meet increased demand for grocery delivery and keep workers safe in the process.

Good Eggs box

Image Credits: Good Eggs

And while the grocery delivery market has become increasingly competitive, Hall argued that Good Eggs stands out thanks to the quality and breadth of its products — 70% of its products are locally sourced, and it often delivers them within 48 hours of harvesting.

“There’s lots of people offering groceries, meal kits, prepared meals, alcohol — we do all of that, with a certain sourcing criteria,” Hall said. As a result, Good Eggs has become the “primary source” for many of its consumers, representing 65% to 85% of their home food purchases.

It’s also worth noting that this represents a bit of a turnaround for the company, after the it shut down operations in Los Angeles, New York City and New Orleans in 2015, with Hall coming on as CEO shortly afterwards. And it sounds like he isn’t in a rush to launch in a bunch of new markets.

“I think of [Southern California] not as one big region, but as several small sub-regions,” Hall said. “There’s the LA region, northern San Diego, Orange County — those areas collectively are the size of two or three Bay Areas. That’s a meaningful increase in our addressable market.”

Good Eggs CEO Bentley Hall

Good Eggs CEO Bentley Hall

The new funding was led by Glade Brook Capital Partners, with participation from GV, Tao Invest, Finistere Ventures and Rich’s, as well as previous investors Benchmark Partners, Index Ventures, S2G, DNS Capital and Obvious Ventures. Glade Brook’s J.P. Van Arsdale is joining the company’s board of directors.

“The grocery market is undergoing fundamental change and the shift to e-commerce and higher quality products and services is accelerating,” Van Arsdale said in a statement. “Good Eggs is experiencing rapid growth with strong unit economics and is well-positioned to become a category-defining leader. We are excited to partner with their team to help drive future growth and expansion.”

In addition to geographic expansion, Hall said the money will allow Good Eggs to continue adding new products and to find ways to improve the e-commerce experience.

In addition to the funding, Good Eggs is also announcing that it has hired Vineet Mehra as its chief growth and customer experience officer. Mehra was previously chief marketing officer and chief customer officer at Walgreens Boots Alliance, and before that as executive vice president and global chief marketing and revenue officer at Ancestry.

#bentley-hall, #ecommerce, #food, #food-and-drink, #funding, #fundings-exits, #glade-brook-capital-partners, #good-eggs, #grocery-store, #los-angeles, #oakland, #retailers, #san-diego, #startups

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Marc Lore leaves Walmart a little over four years after selling Jet.com for $3B

Marc Lore, the executive vice president, president and CEO of U.S. e-commerce for Walmart, is stepping down a little over four years after selling his e-commerce company Jet.com to the country’s largest retailer for $3 billion.

Lore’s tenure at the company was a mixed bag. Walmart instituted several new technology initiatives under Lore’s tenure, but the Jet.com service was shuttered last May and other initiatives from Lore, like an option to have customers order items via text, was also a money-loser for the Bentonville, AK-based company.

“After Mr. Lore retires on January 31, 2021, the U.S. business, including all the aspects of US retail eCommerce, will continue to report to John Furner, Executive Vice President, President and Chief Executive Officer, Walmart U.S., beginning on February 1, 2021,” Walmart said in a filing.

Walmart has continued to push ahead with a number of tech-related initiatives, including the launch of a new business that will focus on developing financial services.

That initiative is being undertaken through a strategic partnership with the fintech investment firm, Ribbit Capital and adds to a startup tech portfolio that also includes the incubator Store N⁰8, which launched in 2018.

“Reflecting on the past few years with so much pride – Walmart changed my life and the work we did together will keep changing the lives of customers for years to come. It has been an honor to be a part of the Walmart family and I look forward to providing advice and ideas in the future,” Lore said in a statement posted to Linkedin. “Looking forward, I’ll be taking some time off and plan to continue working with several startups. Excited to keep you all up to date on what’s next.”

 

 

 

#alaska, #e-commerce, #ecommerce, #financial-services, #jet-com, #linkedin, #marc-lore, #retail-ecommerce, #retailers, #ribbit-capital, #tc, #united-states, #walmart

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UK on-demand supermarket Weezy raises $20M Series A led by NYC’s Left Lane Capital

Weezy — an on-demand supermarket that delivers groceries in fast times such as 15 minutes — has raised $20 million in a Series A funding led by New York-based venture capital fund Left Lane Capital. Also participating were UK-based fund DN Capital, earlier investors Heartcore Capital and angel investors, notably Chris Muhr, the Groupon founder.

Although the company hasn’t made mention of a later US launch, the presence of US investors would tend to suggest that. Weezy is reminiscent of Kozmo, the on-demand groceries business from the dotcom boom of the late ’90s. However, it differs from Postmates in that it doesn’t do pickups.

The cash injection will be used to expand its grocery delivery service across London and the broader UK, and open two fulfillment centers across London. Some 40 more UK sites are planned by the end of 2021 and it plans to add 50 new employees in the next 4 months.

Launched in July 2020, Weezy uses its own delivery people on pedal cycles or electric mopeds to deliver goods in less than 15 minutes on average. As well as working with wholesalers, it also sources groceries from independent bakers, butchers and markets.

It has pushed at an open door during the pandemic. In Q2 2020 half a million new shoppers joined the grocery delivery sector, which is now worth £14.3bn in the UK, according to research.

Kristof Van Beveren, Co-founder and CEO of Weezy, said in a statement: “People are no longer happy to wait around for deliveries, and there is strong demand for a more efficient service.”

Weezy’s co-founders are Kristof Van Beveren and Alec Dent. Van Beveren is formerly from the consumer goods world at Procter & Gamble and McKinsey & Company, while Dent headed up operations at UK startup Drover and business development at BlaBlaCar.

Harley Miller, managing partner, Left Lane Capital, commented: “Weezy’s founding team have the right balance of drive, experience and temperament to lead in e-commerce innovation
and convenience within the UK grocery market and beyond.”

Nenad Marovac, founder and managing partner, DN Capital, said: “Even before the pandemic, interest in online grocery shopping was on the rise. The first time I ordered from Weezy, my delivery arrived in seven minutes and I was hooked.”

#alec-dent, #delivery, #distribution, #dn-capital, #europe, #grocery-store, #groupon, #heartcore-capital, #kristof-van-beveren, #left-lane-capital, #london, #managing-partner, #marketing, #mckinsey-company, #nenad-marovac, #new-york, #procter-gamble, #retailers, #tc, #united-kingdom, #united-states, #weezy

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E-commerce infrastructure startup Nacelle closes $18M Series A

Consumer online shopping habits have led to a windfall of revenues for these web storefronts, but COVID-era trends have also breathed new life into the market for developer tools that help e-commerce sites operate more smoothly for shoppers.

LA-based Nacelle is one of many e-commerce infrastructure startups to earn attention from investors amid COVID.

The web services company helps streamline the backends of e-commerce websites with a so-called “headless” platform that shifts how the front end of websites interact with content in the back end. The startup claims its tech can boost performance, promote better scalability, cut down on hosting costs and offer developers a more streamlined experience.

Nacelle has closed an $18 million Series A led by Inovia with participation from Accomplice, Index Ventures, High Alpha, Silas Capital and Lerer Hippeau. The company just closed a $4.8 million seed round in mid-2020, the speedy pace of their Series A’s close seems to speak to the investor enthusiasm that has deepened around companies operating in the e-commerce world.

“It’s not secret that commerce has done well during COVID,” CEO Brian Anderson tells TechCrunch. “Not only did we get this subtle structural change with COVID that I believe is long-lasting, but merchants have been focusing more on performance.”

One of the startup’s central points of focus has been ensuring that they can bring customers onboard its platform without causing undue headaches. It can be “very painful to migrate data” with other services, Anderson says. The company’s service is “anti-rip-and-replace,” meaning potential customers can integrate “without having to be rebuild their stores.”

The firm’s customer base is largely made up of small- to medium-sized e-commerce sites. Nacelle works closely with agencies for customer referrals, also tapping on Anderson’s past contacts from his days running a Shopify Plus agency.

This past August, data from IBM’s U.S. Retail Index suggested that pandemic trends had accelerated the consumer shift from primarily visiting to physical stores to shopping on e-commerce storefronts by roughly five years.

#alpha, #ceo, #e-commerce, #ecommerce, #lerer-hippeau, #marketing, #nacelle, #online-shopping, #retailers, #shopify, #shopify-plus, #web-services

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Walmart partners with smart box maker HomeValet for grocery delivery pilot

Walmart announced today it will soon begin to pilot a new solution that could eventually allow the retailer to deliver groceries to customers’ homes 24 hours per day. The company is partnering with HomeValet, the maker of a temperature-controlled smart box that’s placed outside the home. Customers’ groceries can be delivered, contact-free, to the secure box and kept cold at any time — even if the customer isn’t at home.

The smart boxes will be tested initially with customers near Walmart’s headquarters in Bentonville, Arkansas, starting this spring. There won’t be a way to sign up for the service. Instead, Walmart will conduct outreach to its current delivery customers in Northwest Arkansas to learn of their interest in participating.

The HomeValet boxes themselves are an internet-of-things platform which offer three temperature-controlled zones, making them capable of storing frozen, refrigerated and pantry items. The boxes communicate with the delivery provider’s device, which gives them secure access to the smart box at the time of the delivery to place the items inside.

According to the HomeValet FAQ, the boxes also disinfect the exposed surfaces of delivered items as well as the inside of the box itself, in between deliveries, using UVC light.

This could appeal to customers who have been trying to reduce their exposure to the novel coronavirus by wiping down all their groceries before putting them away. (The HomeValet website, however, makes no specific claims about COVID-19. Instead, it simply says the UV-C LED disinfection method it uses can create “inhospitable environments to microorganisms such as bacteria, viruses, molds and other pathogens.”)

HomeValet notes that Walmart customers will be the first to gain access to its boxes, as the product is just now going to market. The general public will be able to pre-order boxes for themselves later this year, with pricing still to be announced. HomeValet intends to eventually sell to both consumers and retailers.

HomeValet, a D.C. Metro area-based startup, was founded by father and son team, John and Jack Simms, years before the COVID-19 pandemic with the goal of offering more secure home deliveries. However, the pandemic created a new sense of urgency inside the company to get their product to market as consumers’ needs transformed overnight and continued at an accelerated pace, they’ve said.

As a result, HomeValet acquired an Indiana-based engineering firm, Envolve Engineering LLC, founded by former Whirlpool engineers, back in September. The company touted the deal at the time as a way to bring the capabilities of a Fortune 500 organization to its faster and more nimble startup.

“Consumers want convenience and peace of mind now more than ever. HomeValet’s safe, temperature-controlled Smart Box and app, can enable 24/7 secure deliveries whether customers are occupied at home or receiving remotely,” said John Simms, HomeValet co-founder and CEO. “We’re excited for Walmart customers to be some of the first to enjoy contactless, unattended home delivery,” he added.

Though Walmart envisions how a smart box could allow it to expand its delivery hours, it won’t be offering 24/7 deliveries during the pilot. Instead, the focus of the pilot will be to learn more about if and how its customers like to interact with this technology and how Walmart might incorporate it into its operations going forward.

HomeValet is one of many solutions to date that Walmart has tested to make grocery delivery more efficient. Not all those tests have rolled out broadly. For example, Walmart in 2019 began to trial an in-home grocery delivery service that allows Walmart delivery drivers to enter the home through a smart lock system and, in some cases, put groceries away in the customer’s fridge. Following the COVID-19 outbreak, Walmart pulled back on the in-kitchen program, which is still only operating in Pittsburgh. (InHome delivery is also offered in Kansas City, Vero Beach and West Palm Beach, but groceries are left inside the door.)

Walmart didn’t disclose further details about the nature of its partnership with HomeValet, but said there’s no cost to the customers during the pilot period. More information will be available as the program goes to launch in the spring.

#delivery, #ecommerce, #food-delivery, #grocery-delivery, #grocery-store, #retailers, #walmart

0

MadeiraMadeira, Brazil’s answer to Wayfair and Ikea, is now worth over $1 billion

MadeiraMadeira, the Brazilian answer to Wayfair or Ikea, is now worth $1 billion after raising $190 million in late stage financing from investors led by SoftBank’s Latin American investment fund and the Brazilian public and private investment firm, Dynamo.

An online marketplace specializing in home products, MadeiraMadeira offers roughly 300,000 products so customers can build furnish, renovate and decorate their homes.

Founded in 2009 by Daniel Scandian, Marcelo Scandian and Robson Privado, the company has seen huge tailwinds come from the shift to online shopping in Brazil as a result of the global COVID-19 pandemic.

With stores closed, online shopping in Brazil surged. As Daniel Scandian noted, before the pandemic ecommerce penetration in Brazil was at roughly 7%, that number ballooned to 17% at the height of the pandemic in Brazil and has now stabilized at around 10%.

Combining third party sales with private labeled goods and its own shipping and logistics facilities has meant that MadeiraMadeira can take the best practices from several online retailers and home furnishing stores, Scandian said.

There are more than 10,000 sellers on the MadeiraMadeira platform and roughly 2.5 million stock keeping units. In recent years the company has added showrooms to its mix of retail facilities, where customers can check out merchandise, but complete their orders online.

“That’s the way we can tackle the offline market with a digital mindset,” Scandian said. 

Money from the most recent financing will be used to invest in expanding its logistics capabilities with the addition of new warehouse facilities to expand on its existing ten locations. The company also intends to add same day delivery and the expansion of its private label services.

The new capital, likely the last round before a potential public offering, included previous investors like Flybridge and Monashees along with public-focused investment firms Velt, Brasil Capital and Lakewood.

Early investors like Monashees, Kaszek, Fundo Avila, Endeavour Catalyst and angel backers like Niraj Shah, the founder of Wayfair, and Build.com founder Christian Friedland were instrumental to MadeiraMadeira’s early success, Scandian said.

Based in Curitiba, MadeiraMadeira has over 1300 employees, with the majority of them focused on technology, logistics and product development.

“With this new investment, we are raising our commitment to MadeiraMadeira’s long-term value creation vision as the company consolidates its position as the leader in Latin America’s home goods market. Since our initial investment, MadeiraMadeira’s management team has delivered everything they’ve promised, and our faith in them continues to grow,” said Paulo Passoni, Managing Investment Partner to SoftBank Latin America fund.

#brazil, #companies, #dynamo, #e-commerce, #flybridge, #founder, #ikea, #latin-america, #leader, #online-marketplace, #online-shopping, #partner, #retailers, #softbank, #softbank-group, #tc, #wayfair

0

TaskRabbit is resetting customer passwords after finding ‘suspicious activity’ on its network

TaskRabbit has reset an unknown number of customer passwords after confirming it detected “suspicious activity” on its network.

The IKEA -owned online marketplace for on-demand labor said it reset user passwords out of an abundance of caution and that it “took steps to prevent access to any user accounts,” a TaskRabbit spokesperson told TechCrunch.

The company later confirmed it was a credential stuffing attack, where existing sets of exposed or breached usernames and passwords are matched against different websites to access accounts.

“We acted in an abundance of caution and reset passwords for many TaskRabbit accounts, including all users who had not logged in since May 1, 2020, as well as all users who logged in during the time period of the attack, even though most of the latter activity was attributable to users’ regular use of our services,” the spokesperson said.

“As always, the safety and security of the TaskRabbit community is our priority, and we will continue to be vigilant about protecting our users’ personal information,” said the spokesperson.

TaskRabbit customers were alerted to the incident in a vague email that only noted their password had been recently changed “as a security precaution,” without saying what specifically prompted the account change. TechCrunch confirmed that the email was legitimate.

The password reset email sent to TaskRabbit customers. (Image: Sarah Perez/TechCrunch)

It’s not uncommon for companies to reset passwords after a security incident where customer or account information is accessed or stolen in a breach.

Last year, online apparel marketplace StockX reset customer passwords after initially citing “system updates,” but later admitted it took action after it found suspicious activity on its network. Days later, a hacker provided TechCrunch with 6.8 million StockX account records stolen from the company’s servers.

TaskRabbit’s freelance labor marketplace was founded in 2008, and grew over time from an auction-style platform for negotiating tasks and errands to a more mature and tailored marketplace to match customers with contractors. That eventually attracted the attention of furniture retailer IKEA, which bought the startup in September 2017 after TaskRabbit put itself on the market for a strategic buyer.

The year after the acquisition, however, TaskRabbit had to take its website and app down due to a “cybersecurity incident.” The company later revealed an attacker had gained unauthorized access to its systems. Then-TaskRabbit CEO Stacy Brown-Philpot said the company had contracted with an outside forensics team to identify what customer information had been compromised by the attack, and urged both users and providers to stay vigilant in monitoring their own accounts for suspicious activity.

Following the attack, the company said it was implementing several new security measures and would work on making the log-in process more secure. It also said it would reduce the amount of data retained about taskers and customers as well as “enhance overall network cyber threat detection technology.”

Brown-Philpot left TaskRabbit earlier this year, and the CEO role has since been filled by former Airbnb and Uber Eats leader, Ania Smith.

Updated with additional comment from TaskRabbit.

#data-breach, #data-security, #ecommerce, #ikea, #online-marketplace, #retailers, #security, #taskrabbit

0

After lockdowns boost gaming marketplace Eneba, it raises $8M from Practica and InReach

Eneba, a marketplace for gamers that sells games and other products, has raised a $8M round of funding from Practica Capital and InReach Ventures. The funding is described as a ‘combination’ of a Seed and Series A round. Also participating in the funding for the Lithuanian startup was FJ Labs and a group of Angel investors including Mantas Mikuckas, COO of Vinted. The investment highlights once again the strength of the Baltics region as tech ecosystem, after Lithuania produced its first Unicorn in the shape of Vinted, and Estonia’s added Pipedrive to its unicorns list.

With the increased shift to digital entertainment during the pandemic, the startup has managed to garner much more US traffic. Launched in 2018 by two Lithuanian school friends, Vytis Uogintas and Žygimantas Mikšta, Eneba says it has attracted 26 million unique users because of its security features, ‘one-click to buy’ gamer experience and fingerprinting technology. The site also optimizes its localized gaming experiences to show locally trending gaming products. Eneba’s platform is designed to reduce risky transactions, simplifies the refunding process, and deals with fraud threats.

Co-founder and CMO, Žygimantas Mikšta said: “We had a lot of new users coming to Eneba during these uncertain times. While it was extremely satisfying to see our numbers increasing tenfold, there was a challenge to meet the demand. To better reflect our user numbers, we had to quickly expand our team to 130.”

Security has risen up the agenda in online gaming as virtual goods and services connected to games can be highly susceptible to fraud or theft. Although it competes with outlets like Amazon, eBay, and retailers like Gamestop, Game.co.uk, Eneba think they’ve found a better, tailored online pre/post-buying experience for gamers, while addressing the risk problems for sellers and buyers in the gaming world.

Donatas Keras, partner at Practica Capital said: “We are thrilled to be backing Vytis and Žygimantas. We’ve been impressed by their ability to execute at such speed as their company quickly scales, and to drive an incredible product with a unique value proposition for gamers.”

Co-founder of InReach Ventures, Roberto Bonanzinga, said: “In Europe we have a tradition of building successful companies in the gaming space. We are very excited to have discovered Eneba thanks to our AI platform when the company was unknown and under the radar. We have been extremely impressed by what the founders have been able to build in such a short amount of time.”

#amazon, #artificial-intelligence, #co-founder, #companies, #coo, #ebay, #estonia, #europe, #fj-labs, #game-co-uk, #gamestop, #inreach-ventures, #lithuania, #online-gaming, #partner, #pipedrive, #retailers, #tc, #unicorn, #united-states, #vinted

0

Walmart+ takes on Prime by dropping $35 minimum on Walmart.com purchases

Walmart+, the retailer’s lower cost alternative to Amazon Prime offering same-day delivery of groceries and other items, is making its service more appealing with today’s launch of a new perk. The company says that starting on Friday, December 4, it will remove the $35 shipping minimum on orders from Walmart.com for its members. However, this doesn’t apply to the same-day orders of groceries or other items fulfilled by Walmart stores, but rather online shopping where orders are placed through Walmart’s traditional e-commerce channels.

That means there’s no longer a minimum order requirement on the next-day and two-day shipping that’s offered on items shipped from Walmart.com, no matter the basket total. The change, arriving only a couple of months after Walmart+’s launch, positions the new program as more of a true alternative to Amazon Prime, as Prime’s biggest perk has always been its free fast shipping service that encourages consumers to shop online without worrying about minimum order sizes.

Meanwhile, Walmart+’s biggest perk until now had been its same-day delivery service, with a particular focus on groceries — similar to Instacart or Amazon Fresh. The service didn’t charge fees on same-day grocery if the orders were at least $35, and this aspect continues today.

The Walmart+ program itself grew out of Walmart’s Delivery Unlimited, an earlier version of the service that had also involved having Walmart store staff pick orders which are handed off to delivery partners. In the past, those partners have included Postmates (now acquired by Uber), DoorDash, Roadie, and Point Pickup, among others. More recently, Walmart acquired last-mile delivery operation JoyRun, to bring more of its delivery logistics business in-house. 

Unlike some grocery delivery services, Walmart’s advantage in same-day is that it could also fulfill orders of other everyday items from its store shelves, not just food and household goods. When Walmart+ launched in mid-September, it promised same-day delivery of over 160,000 items.

The program also includes a small handful of other perks like fuel discounts at nearly 2,000 Walmart, Murphy USA and Murphy Express stations and access to Scan & Go to skip the checkout lines when shopping in-store.

Today, Walmart said it’s also expanding the fuel savings to over 500 Sam’s Club gas stations, too.

While Amazon Prime has expanded over the years to include all sorts of benefits, like free music and streaming video, e-books, audiobooks, gaming perks, and more, Walmart+ so far remains focused on its core features — like shipping benefits and cost savings. And coming in at $98 per year (or $12.95/mo), it’s cheaper than Prime’s $119 per year membership, which could appeal to consumers only interested in free delivery.

Walmart, like many large retailers, has benefitted by the acceleration of e-commerce driven by the pandemic. The company, in its third quarter earnings, reported U.S. e-commerce sales were up by 79% in the quarter, with earnings of $1.34 a share on revenue that was up 5.2% year-over-year to $134.7 billion.

So far, Walmart has declined to share how many customers have signed up for Walmart+ much to investors’ dismay. (One third-party estimate puts it at 19M members, however). The retailer notes the program is available at over 4,700 stores, including 2,800 stores that offer delivery — the latter which reaches 70% of the U.S.

#amazon-prime, #e-commerce, #ecommerce, #online-shopping, #retail, #retailers, #sams-club, #united-states, #walmart

0

Amazon launches its first Amazon Air regional hub in Europe

Amazon has officially started operations at its first European Amazon Air hub, based out of the Leipzig/Halle Airport in Germany. The new facility spans 20,000 square meters (65,600 square feet) and will host two Amazon-branded Boeing 737-800 aircraft, brining the company’s total operational air fleet to over 70 aircraft.

The retail giants says that the new hub will generate more than 200 jobs locally in the Leipzig area, where it already employs over 1,500 thanks to the presence of a large regional fulfilment center. Amazon also notes that this will help the company continue to offer timely delivery in Europe as the pandemic continues.

Amazon has steadily grown its Air cargo logistics operations since debuting the expansion of its delivery and shipping network in 2016. It has regional air hubs at airports in Texas, Puerto Rico, and Florida in the U.S., and plans to expand to Sand Bernardino International Airport in California and Cincinnati/Northern Kentucky International Airport in 2021.

Back in June, it added a dozen new aircraft to its fleet in a move that was said to help it handle extra demand as a result of COVID. The addition of its European hub indicates it’s still prioritizing growing this aspect of its operations, which makes sense given demand for its services are likely spiking amid the current second virus wave in Europe and elsewhere globally.

#aerospace, #amazon, #amazon-air, #california, #cincinnati, #companies, #ecommerce, #europe, #florida, #germany, #leipzig, #publishing, #puerto-rico, #retailers, #tc, #texas, #transportation, #united-states

0

Walmart’s new test stores will experiment with AR, mobile, revamped checkout and more

Walmart over the years has been working to turn its physical retail stores into online fulfillment centers, and now, with its latest set of test stores announced today, the retailer will try out ideas to make that transition more seamless. Walmart says it will deploy personnel to four test stores across the U.S., where they’ll prototype and iterate on new technology and tools that will serve the needs of Walmart’s in-store shoppers and online shoppers alike, including changes involving augmented reality, handheld mobile devices, new apps, in-store signage, omni-assortment, and revamped checkout stations.

The idea is to turn these four test locations into rapid prototyping environments, where teams can test solutions in real-time, make changes, scale what works and scrap what doesn’t. Some of the changes being put into place will be visible to the customer, while others will be more behind-the-scenes.

At launch, Walmart has identified four areas where it’s looking to test new ideas across assortment, inventory, picking and checkout process.

In one store, it will test moving the majority of the in-store apparel assortment online — meaning the same exact items can be found both in the store and online. This isn’t always the case today, as not everything stocked in the stores are also on the Walmart website, and vice versa. This test will focus on determining what has to take place to make all the eligible items in a store “omni-available,” Walmart says, a reference to its desire to be a true “omni-channel” retailer.

Image Credits: Walmart

A second test will involve a new app that aims to speed up the time it takes to get items from the back room to the sales floor, using augmented reality (AR). In this test, instead of scanning the barcode on boxes that are ready to go, the app will use AR technology to highlight those boxes. The hope is that this will help to move the product to shelves, and in front of customers, faster than before.

Image Credits:

Another experiment uses a combination of handheld devices and in-store signage to help associates better navigate to the right locations when picking items for online orders. In early tests, Walmart says the percentage of time it takes associates to find the items has already gone up by 20% in some of the categories that tend to be more difficult to find.

The fourth test will expand and build on an experimental checkout experience Walmart previously announced in June. In this store, Walmart does away with individual checkout lanes, and transitions cashiers into the role of “hosts” in a new area of the store that resembles a self-checkout destination. Here, customers can opt to check out themselves or have a “host” offer full-service checkout. In either case, store staff are around to help with any issues that arise.

Image Credits: Walmart

The expectation is that checkout lanes will move more quickly than the old style of individual checkout lanes. With the latter layout, a surge of new customers coming to the registers could cause bottlenecks if there weren’t enough lanes staffed. In the long run, the new layout could free up cashiers to help with other tasks in store as a checkout station may not need as many “hosts” on hand to run things.

The four stores may test other technology and digital solutions in the future, as well, but Walmart didn’t expand on its roadmap plans. Two of the stores in Northwest Arkansas, including a Bentonville location, are up and running. Two more are planned to be up and running soon.

Each store will have four new employees staffed to aid with the prototypes — a product manager, a technologist, a business owner, and a designer.

“We’re moving quickly to use our physical retail stores to not only serve in-store shoppers, but to flex to meet the needs of online shoppers, too, in ways that only Walmart can,” said John Crecelius, Walmart U.S. SVP of Associate Product and Next Generation Stores, in a statement. “That’s where our new test stores come in. Their purpose is to find solutions that continue to help our stores operate as both physical shopping destinations and online fulfillment centers in a way that has yet to be seen across the retail industry,” he added. 

#e-commerce, #ecommerce, #fulfillment, #mobile-devices, #omnichannel, #online-shopping, #point-of-sale, #retail, #retailers, #shopping, #walmart

0

Instacart, in partnership with ALDI, will support SNAP EBT for online groceries

Instacart is making its grocery delivery and pickup services more accessible to lower-income customers by offering customers the ability to pay for groceries using their SNAP (Supplemental Nutrition Assistance Program) benefits. This is the first time Instacart shoppers have been able to use government assistance programs when paying for groceries, and follows earlier moves by larger retailers, including Amazon, Walmart, and others in extending SNAP EBT to online grocery.

In Instacart’s case, the option is being made available in partnership with ALDI, which will offer the ability for SNAP EBT participants to access fresh food and other staples using the online service.

When shopping, Instacart users will be able to add ALDI’s EBT SNAP-eligible items to their cart, then select how much of their benefits they want to allocate to their order before checking out.

Image Credits: Instacart

The program will launch over the new few weeks, and will first arrive at ALDI’s over 60 Georgia stores before expanding to over 570 stores across Illinois, California, Florida and Pennsylvania in the months ahead.

Instacart says it runs its Customer and Shopper Care team from Atlanta, which one reason why it selected Georgia as the debut market — adding it was important to first support the communities where its own employees live and work.

Today, online grocery shopping is often seen as a luxury service, but that should not be the case. Often, it’s just as affordable to shop online than in-store (if using the pickup option, at least), as customers can more easily compare prices with other retailers online. For some lower-income customers, online shopping can also save time when they’re stretched between jobs and family commitments.

The pandemic has now further complicated access to food for those on SNAP benefits, and in particular, for high-risk individuals. These customers now have to take risks with their lives and health to shop in-store, making online grocery more of a necessity.

“The introduction of Instacart’s EBT SNAP payments comes at a time when food insecurity in the U.S. has compounded as the nation continues to be impacted by COVID-19,” Instacart stated in its announcement. “According to Feeding America, due to the effects of the pandemic, more than 54 million people may experience food insecurity in 2020, which includes a potential 18 million children. In Georgia specifically, food insecurity impacts 12.5% of the population and disproportionately affects communities of color,” it noted.

Instacart is now one of several online retailers supporting SNAP EBT for groceries.

Before the coronavirus outbreak, the U.S. Dept. of Agriculture had been working to make online grocery more accessible to SNAP recipients through an online purchasing pilot program with support of retailers including Amazon, Walmart, ShopRite, and others. The pilot retailers  have made it possible to shop for groceries online, then pay using SNAP EBT.

ALDI and Instacart are not listed on the USDA’s website as program participants, however.

#e-commerce, #ecommerce, #georgia, #grocery-store, #instacart, #online-grocery, #online-shopping, #retailers, #supplemental-nutrition-assistance-program

0

Amazon launches a program to pay consumers for their data on non-Amazon purchases

Amazon has launched a new program that directly pays consumers for information about what they’re purchasing outside of Amazon.com and for responding to short surveys. The program, Amazon Shopper Panel, asks users to send in 10 receipts per month for any purchases made at non-Amazon retailers, including grocery stores, department stores, drug stores and entertainment outlets (if open), like movie theaters, theme parks, and restaurants.

Amazon’s own stores, like Whole Foods, Amazon Go, Amazon Four Star and Amazon Books do not qualify.

Program participants will take advantage of the newly launched Amazon Shopper Panel mobile app on iOS and Android to take pictures of paper receipts that qualify or they can opt to forward emailed receipts to receipts@panel.amazon.com to earn a $10 reward that can then be applied to their Amazon Balance or used as a charitable donation.

Amazon says users can then earn additional rewards each month for every survey they complete. The optional surveys will ask about brands and products that may interest the participant and how likely they are to purchase a product. Other surveys may ask what the shopper thinks of an ad. These rewards may vary, depending on the survey.

The program is currently opt-in and invite-only, and is also only open to U.S. consumers at this time. Invited participants can now download the newly launched Shopper Panel app and join the panel. Other interested users can use the app to join a waitlist for an invite.

Image Credits: Amazon

Amazon claims it will delete any sensitive information from the receipts users upload, like prescription information. But it doesn’t delete users’ personal information, instead storing it in accordance with its existing Privacy Policy. It will allow users to delete their previously uploaded receipts, if they choose, but it’s not clear that will actually remove collected data from Amazon’s systems.

Consumer research panels are common operations, but in Amazon’s case, it plans to use the data in several different ways.

On the website, Amazon explains it “may use” customer data to improve product selection at Amazon.com and Whole Food Market, as well as to improve the content selection offered through Amazon services, like Prime Video.

Amazon also says the collected data will help advertisers better understand the relationship between their ads and product purchases at an aggregate level and will help Amazon build models about which groups of customers are likely to be interested in certain products.

And Amazon may choose to offer data to brands to help them gain feedback on existing products, the website notes.

Image Credits: Amazon

The program’s launch follows increased scrutiny over Amazon’s anti-competitive business practices in the U.S. and abroad when it comes to using consumers’ purchase data.

Amazon came under fire from U.S. regulators over how it had leveraged third-party merchants’ sales data to benefit its own private label business. When Amazon CEO Jeff Bezos testified before Congress in July, he said the company had a policy against doing this, but couldn’t confirm that policy hadn’t been violated. The retailer may also be facing antitrust charges over the practice in the E.U..

At the same time, Amazon has been increasing its investment in its advertising business, which grew by 44% year-over-year in Q1 to reach $3.91 billion. That was a  faster growth rate than both Google (13%) and Facebook (17%), even if tiny by comparison — Google ads made $28 billion that quarter and Facebook made $17.4 billion, Digiday reported.

As the pandemic has accelerated the shift to e-commerce by 5 years or so, Amazon’s need to better optimize advertising space has also been sped up — and it may rapidly need to ingest more data that what it can collect directly from its own website.

In a message to advertisers about the program’s launch, Amazon positioned its e-commerce business as a small piece of the overall retail market — a point it often makes in hopes of avoiding regulation:

“In this incredibly competitive retail environment, Amazon works with brands of all sizes to help them grow their businesses not just in our store, but also across the myriad of places customers shop. We also work hard to provide our selling partners—and small businesses in particular—with tools, insights, and data to help them be successful in our store. But our store is just one piece of the puzzle. Customers routinely use Amazon to discover and learn about products before purchasing them elsewhere. In fact, Amazon only represents 4% of US retail sales. Brands therefore often look to third-party consumer panel and business intelligence firms like Nielsen and NPD, and many segment-specific data providers, for additional information. Such opt-in consumer panels are well-established and used by many companies to gather consumer feedback and shopping insights. These firms aggregate shopping behaviors across stores to report data like average sales price, total units sold, and revenue on tens of thousands of the most popular products.”

The retailer then explained that the Shopper Panel could help it to support sellers and brands by offering additional insights beyond its own store.

Amazon doesn’t say when the program waitlist will be removed, but says anyone can sign up starting today.

#advertising, #amazon, #amazon-com, #business-intelligence, #e-commerce, #ecommerce, #online-shopping, #retailers, #united-states, #whole-foods

0

Kroger, one of America’s largest grocery chains, experiments with ghost kitchens and delivery in the Midwest

The Kroger Co., one of the biggest grocery chains in the Midwest is dipping its toe into on-demand delivery and the ghost kitchen craze through a partnership with an Indianapolis-based startup, ClusterTruck.

Supermarkets would seem to be logical places to site the kinds of ghost kitchens that have caught investor’s eye over the past few years and it wouldn’t be the first time that business models from startup companies bubbled up into large national brands, who are better positioned to capitalize on the trends.

Think about the various meal prep kits that launched and raised millions of dollars before being taken over or copied by big retail groceries. Meal prep kits are everywhere in the grocery store these days and supermarkets have had hot food counters dating back decades at least.

Through the partnership with ClusterTruck, Kroger is expanding on a pilot conducted last year, where the grocer set aside 1,000 square feet at participating stores in Carmel and Indianapolis, Indiana and Columbus, Ohio for ClusterTruck staff to cook meals for delivery and in-store pickup.

“Kroger remains focused on providing our customers with fresh food and experiences enabled by industry-leading insights and transformative technology,” said Dan De La  Rosa, Kroger’s group vice president of fresh merchandising, in a statement. “The new on-premise  kitchen, in partnership with ClusterTruck, is an innovation that streamlines ordering,  preparation and delivery, supporting Kroger as we meet the sustained customer demand for quick, fresh restaurant-quality meals, especially as we navigate an unprecedented health crisis that has affected every aspect of our lives, including  mealtime.” 

The idea, according to Kroger, is to continue to capitalize on the shift to digital deliveries and sales. In the second quarter of the year, the company said it saw over 100% growth in its digital sales.

Ghost kitchens (or cloud kitchens) caught investors’ attention when Uber co-founder and former chief executive Travis Kalanick raised over a hundred million dollars to make the idea his next big bet after Uber. Interest and investment into the model, which sees companies offer food prep and storage spaces for would-be food truck and delivery entrepreneurs, soared. Kalanick’s CloudKitchens have gone on to raise several hundreds of millions of dollars and spawned competitors like the Pasadena, Calif.-based company Kitchen United.

Not everyone is convinced that the dark kitchen or cloud kitchen trend is all that it’s made out to be. My colleagues at TechCrunch have taken the idea to task for its reliance on some WeWork -ian assumptions around margins.

But if anything could make the model go, it’s the combination of existing infrastructure and digital efficiencies. That’s likely what Kroger is hoping to leverage.

It’s an interesting experiment at least and one worth tracking.

#california, #co-founder, #columbus, #indiana, #indianapolis, #industries, #kitchen-united, #kroger, #meals, #ohio, #online-food-ordering, #retailers, #tc, #travis-kalanick, #uber, #wework

0

This is how police request customer data from Amazon

Anyone can access portions of a web portal, used by law enforcement to request customer data from Amazon, even though the portal is supposed to require a verified email address and password.

Amazon’s law enforcement request portal allows police and federal agents to submit formal requests for customer data along with a legal order, like a subpoena, a search warrant, or a court order. The portal is publicly accessible from the internet, but law enforcement must register an account with the site in order to allow Amazon to “authenticate” the requesting officer’s credentials before they can make requests.

Only time sensitive emergency requests can be submitted without an account, but this requires the user to “declare and acknowledge” that they are an authorized law enforcement officer before they can submit a request.

The portal does not display customer data or allow access to existing law enforcement requests. But parts of the website still load without needing to log in, including its dashboard and the “standard” request form used by law enforcement to request customer data.

The portal provides a rare glimpse into how Amazon handles law enforcement requests.

This form allows law enforcement to request customer data using a wide variety of data points, including Amazon order numbers, serial numbers of Amazon Echo and Fire devices, credit cards details and bank account numbers, gift cards, delivery and shipping numbers, and even the Social Security number of delivery drivers.

It also allows law enforcement to obtain records related to Amazon Web Services accounts by submitting domain names or IP addresses related to the request.

Assuming this was a bug, we sent Amazon several emails prior to publication but did not hear back.

Amazon is not the only tech company with a portal for law enforcement requests. Many of the bigger tech companies with millions or even billions of users around the world, like Google and Twitter, have built portals to allow law enforcement to request customer and user data.

Motherboard reported a similar issue earlier this month that allowed anyone with an email address to access law enforcement portals set up by Facebook and WhatsApp.

#amazon-web-services, #computing, #law-enforcement, #neighbors, #officer, #privacy, #publishing, #retailers, #security, #web-portal

0

Walmart expands drone delivery tests to Arkansas with new Zipline partnership

Walmart now has two tests for drone delivery running in the US.

Early Monday morning the company announced a new drone delivery program with Zipline, a startup that made its name delivering medical supplies across Africa.

The partnership with Zipline comes on the heels of another newly announced drone partnership with Flytrex, which started delivering packages to Walmart customers in North Carolina last week.

Zipline’s work with Walmart in Arkansas compliments a pilot delivery program that the company began in North Carolina earlier this year. Working with Novant Health, Zipline has been delivering medical equipment and personal protective gear via drone to regions of North Carolina since May.

The drone operation with Walmart will deliver health and wellness products initially, with the potential to expand to general merchandise.

A movement into the delivery of general goods would be something of a pivot for Zipline, which has touted its ability to handle medical supplies and equipment since the launch of its services across Africa in 2016.

 

Trial deliveries for the new service will begin in Northwest Arkansas and cover a 50-mile radius, according to a statement from Walmart.

Walmart’s forays into drone delivery come as its largest competitor, Amazon, also picks up activity in the drone aviation industry.

In late August, Amazon’s Prime Air drone delivery fleet received approval from the FAA to begin trialing commercial deliveries. It’s similar to the certification that logistics companies like UPS received to test their own drone delivery networks.

Rather than operate its own drone fleet, Walmart seems content to partner with existing companies working in the space — for now.

#africa, #amazon, #arkansas, #articles, #delivery-drone, #emerging-technologies, #federal-aviation-administration, #north-carolina, #novant-health, #partner, #prime-air, #retailers, #tc, #united-states, #unmanned-aerial-vehicles, #ups, #walmart, #zipline

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As it delists, Rocket Internet’s ill-fated experiment with public markets is over

It was all supposed to be so different. When Rocket Internet IPO’d in 2014 it was the largest tech company floatation in Europe for 7 years. A year later it had lost $46m and it’s valuation had dropped by 30%. Since then the German start-up factory behind internet companies such as Delivery Hero, Zalando and Jumia has languished, in part because the reason for it’s existence – to provide growth capital for ‘rocket-fuelled’ startups – has ebbed away, as the tech market was flooded with capital in recent years. Today the company said it was delisting its shares from the Frankfurt and Luxembourg Stock Exchanges for just that reason.

Rocket’s market value has fallen from its high of 6.7 billion euros ($8 billion) on the day of its IPO on the Frankfurt Stock Exchange to just 2.6 billion euros and is now offering investors 18.57 euros ($22.23) for each of their shares, lower than Monday’s closing price of 18.95 euros.

The company said it was “better positioned as a company not listed on a stock exchange” as this would allow it to focus on long-term bets.

In a statement, the company said: “The use of public capital markets as a financing source as essential [sic.] parameter for maintaining a stock exchange listing is no longer required and adequate access to capital is secured outside the stock exchange. Outside a capital markets environment, the Company will be able to focus on a long-term development irrespective of temporary circumstances capital markets tend to put emphasis on.”

Delisting, it said, will also reduce operational complexity when setting up new companies, “freeing up administrative and management capacity and reducing costs”.

Its investment division, Global Founders Capital, and CEO Oliver Samwer, will retain their stakes of 45.11% and 4.53% respectively, meaning the virtual shareholder meeting on Sept. 24 ask for shareholder approval to delist will be largely a formality. It has also launched a separate buyback program to secure 8.84% of its shares from the stock market. Although the decision to de-list makes sense, smaller shareholders will be burned, especially as Rocket is using its own cash for the buy-back.

The bets Rocket took, however, have of course paid off. For some. According to Forbes, Samwer and his brothers and co-founders Alexander and Marc are worth at least $1.2 billion each.

The Berlin -based firm became quickly known as a “clone factory” after Samwer famously conceded during his PHD that Silicon Valley had got innovation wrong by comping up with new ideas, and the ‘innovation’ would simply be to make existing models more efficient. The fact those existing models were usually dreamt up by other people never seemed to phase him.

Almost like clockwork Rocket produce clones of various guess for Amazon, Uber, Uber Eats and Airbnb. Its defence for this rapacious strategy was that it was simply adapting proven models for other markets.

Rocket would say it was merely adapting proven models for untapped local markets. Of course, the kicker was usually that the company would either scale faster globally than the original US-based startup, thus forcing some kind of acquisition, or that it would have its clones IPO faster. It did however produce some big, global, companies, even if they were not particularly original, including e-commerce firm Zalando, food delivery service Delivery Hero and meal-kit provider HelloFresh .

There have been successes. Jumia, the African e-commerce company, listed in April last year and when Rocket sold its stake earlier this year, it contributed tp Rocket’s net cash position of €1.9bn at the end of April.

But it has not benefitted from the recent stock market rally for tech companies, as it is overly exposed to e-commerce rather than pandemic-proof companies like Zoom .

For nostalgia sakes, here’s that interview I did with Oliver Samwer in 2015, just one more time.

#airbnb, #alexander, #amazon, #berlin, #ceo, #companies, #delivery-hero, #e-commerce, #europe, #food, #forbes, #frankfurt, #global-founders-capital, #hellofresh, #internet, #jumia, #kicker, #listing, #marc, #oliver-samwer, #retailers, #rocket-internet, #tc, #uber, #zalando, #zoom

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With technology to perfect product pitches in digital marketplaces Pattern raises $52 million

Pattern, a Lehi, Utah-based reseller that offers large and small brands a way to optimize their sales on marketplaces like Amazon, eBay, Walmart and Google Shopping, has raised $52 million in growth funding, the company said.

The money, from Ainge Advisory and KSV Global, will be used to expand the company’s business worldwide.

Founded in 2013, the e-commerce reseller uses analytics to lock down market specific keywords in advertising and has managed to reach a run-rate that should see it hit $500 million in annual revenue by the end of 2020, according to Pattern co-founder and chief investment officer, Melanie Alder.

Brands like Nestle, Pandora, Panasonic, Zebra and Skechers sell their goods to Pattern in an effort to juice sales on digital marketplaces.

“Pattern represents our brands in the US, across Europe, and in select markets in Asia, selling for us on global marketplaces such as Amazon, Walmart, Tmall, and JD as well as building and managing three of our direct-to-consumer sites,” said Kyle Bliffert, CEO and president of Atrium Innovations, a Nestle Health Science company, in a statement. “The global e-commerce growth we have experienced by leveraging Pattern’s expertise is extraordinary.”

Pattern places bets on where a product is likely to receive the most attention using specific keywords, according to the company’s chief executive, Dave Wright. The company buys products from its brand partners and then sells them widely across marketplaces in the US, Europe and Asia. These markets represent $2.7 trillion in total sales and Wright expects it to reach $7 trillion by 2024.

As Wright noted, a majority of searchers for sales begin on Amazon . The company just opened its eighteenth location in Germany. Pattern has grown sales for brands from $3 million to $26 million and the company makes money off of the margin on the sales of products. With the new funding, the company intends to expand into other geographies like Japan and India.

Wright says his company addresses one of the fundamental problems with advertising technology — the proliferation of tools hasn’t meant better optimization for most brands, because they’re teams aren’t equipped to specialize.

While there may be hundreds of different advertising and marketing folks working at a company, each company may have hundreds of brands that it sells and the dedicated teams to specific brands may only have one or two  people on staff.

“Data makes all the difference,” said co-founder and CEO Dave Wright. “I’ve spent the bulk of my career in data science and data management, and our ability to detect and act on ‘patterns’ on ecommerce platforms has allowed the brands we represent to be incredibly successful.”

#amazon, #asia, #brand, #data-management, #e-commerce, #ebay, #europe, #germany, #google, #india, #japan, #nestle, #panasonic, #retailers, #tc, #tmall, #united-states, #utah, #walmart, #zebra

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Abandoned mall department stores may become Amazon’s next fulfillment center

One of the largest owners of shopping mall real estate in the United Stages, Simon Property Group, has been talking to Amazon about transforming its anchor department stores into Amazon distribution hubs, according to the Wall Street Journal.

In the case of Simon Property, the anchor tenants like J.C. Penney and Sears that used to be stable sources of revenue are now weights around the neck of the retail real estate manager, and transforming their ghostly halls of pale mannequins into warehouses for Amazon orders simply makes sense.

The transformation from showroom to storehouse for everything from books and sweaters to kitchenware and electronics won’t be too much of a stretch for the vacant storefronts of businesses that hvae both filed for Chapter 11 bankruptcy protection.

Simon’s holdings include some 63 JC Penney and 11 Sears stores, according to the Journal’s reporting citing a May public filing from the real estate developer.

This wouldn’t be the first time that Amazon had turned to mall real estate for fulfillment centers. in 2019, the online retailer acquired a massive physical footprint in Akron, Ohio that it turned into a distribution center.

Gone are the days when gum smacking tweens and teens and their beleaguered parents would head to the local mall for a stroll around the retail block. Now shoppers prefer to peruse online and kids find Fortnite to be the Hot Topic to hang in. 

The deal, if it goes through, would be another nail in the coffin for a staple of late twentieth century culture that now mostly exists in the memory of baby boomers and Gen X consumers (thanks millennials and Gen Z).

Malls these days are lifestyle affairs that promise boutique branded shops than the sprawling department stores that had something for everyone. The big-box spaces that the Journal reported Amazon is negotiating for are the 100,000 square foot, multi-story behemoths, that are likely not long for the long tail world of niche commerce anyway.

These days, consumers are looking for brands that appeal to a persona or the bottom line of a pocketbook, and not the mass casual one-stop-shop of late twentieth century department store off-the-rack identities.

The Journal reported that, if the deals went through, Simon would like rent the space at a considerable discount to what it would charge another retailer. The paper estimated that rents could be as low as $4 per square foot to $19 per square foot, while warehouse rents average about $10.

At this point, shopping malls are looking for anything to bring in money. They’ve already tried schools, medical offices and senior living facilities, but the COVID-19 epidemic has thrown all of those plans into the abyss.

And, as the Journal notes, malls are already located in places that make them attractive distribution hubs. Amazon has bought some sites already and FedEx and DHL have done the same, according to the paper.

At this point, Amazon ownership may be a better fate for the real estate than totally abandoning it to empty space and the lingering soundtrack of 80s rock.

 

#amazon, #dhl, #electronics, #fedex, #hot-topic, #ohio, #online-retailer, #real-estate, #retailers, #sears, #shopping-malls, #tc, #the-wall-street-journal

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LA’s consumer goods rental service, Joymode, sells to the NYC retail investment firm, XRC Labs

After raising $15 million in financing from one of technology’s most successful global investment firms, the Los Angeles-based consumer goods rental company Joymode is selling itself to an early-stage retail investment firm out of New York, XRC Labs.

Joymode’s founder Joe Fernandez will continue on as an advisor to Joymode as the company moves to pivot its business to focus on retail partnerships.

The relationship with XRC Labs’ Pano Anthos began after a small pilot integration between Joymode and Walmart launched in late 2019. “[It] became obvious that we should go all in on retail partnerships,” according to Fernandez. And as the company cast about for partners to pursue the strategy, Anthos and his firm, XRC, kept being mentioned, Fernandez said.

The precise terms of the deal with XRC Labs were undisclosed, but Joymode will become a wholly owned business of XRC and could potentially return to market to raise additional funds from additional investors, according to Fernandez.

“We could never crack growth at the scale we needed,” said Fernandez of the company’s initial business. “From day one, my belief was Joymode was going to be huge or dead. We grew, but given the cost structure of our business it put a lot of pressure on the business to grow exponentially fast. Everyone loved the idea but the actual growth was slower than we needed it to be.”

Though Joymode wasn’t a success, Fernandez said he can’t fault his investors or his team. “We got to iterate through every possible idea we had. Literally every idea we had was exhausted… We failed and that’s a bummer, but we got a fair shot,” he said.

What remains of the company is an inventory management system on the back end and a service that will allow any retailer to get involved in the rental business going forward.

“Part of the thesis was that by making things available for rental, people would want to do more stuff,” said Fernandez, but what happened was that consumers needed additional reasons to use the company’s service, and there weren’t enough events to drive demand.

“I believe that the inventory management system we made was incredible and it will be a standard for retailers doing rentals going forward,” he said. 

 As the company turned to retailers, the rental option became a way to generate revenue through additional products. “All the accessories that made the event even better,” said Fernandez. “Add-ons, try before you buy, experiential things that are just much more complete in a retail environment.”

At Joymode, the problem was that the company was owning the inventory, which created a high fixed cost. “We never felt confident with the growth in LA to justify the expense of opening in another city,” Fernandez said. “If we had cracked user acquisition in LA we would have rolled it out in a bunch of places.”

Ultimately, Joymode members saved $50 million by using Joymode to rent products rather than buying them. In all, the company acquired 2,000 unique products — from beach and camping equipment to video games, virtual reality headsets to cooking appliances. On a given weekend, roughly 30,000 products would ship from the company’s warehouse to locations across Southern California.

At XRC Labs, a firm launched in 2015 to support the consumer goods and brand space, Joymode will complement an accelerator that raises between $6 million and $9 million every two years and manages a growth fund that could reach $50 million in assets under management.

For Anthos, the best corollary to Joymode’s business could be the rental business at Home Depot. “Home Depot’s rental business is over $1 billion per year,” Anthos said. “There’s going to be this enormous component of our society and for them renting will be not just a more sustainable but reasonable option. They’re going to want to rent because they don’t want to own it.”

Joymode was backed by TenOneTen, Wonder, Struck Ventures, Homebrew and Naspers (now Prosus).

#advisor, #exit, #home-depot, #investment-banking, #joe-fernandez, #joymode, #los-angeles, #louisiana, #ma, #naspers, #new-york, #retail, #retailers, #startups, #tc, #virtual-reality, #walmart, #xrc-labs

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Shelf Engine has a plan to reduce food waste at grocery stores, and $12 million in new cash to see i

For the first few months it was operating, Shelf Engine, the Seattle-based company that optimizes the process of stocking store shelves for supermarkets and groceries, didn’t have a name.

Co-founders Stefan Kalb and Bede Jordan were on a ski trip outside of Salt Lake City about four years ago when they began discussing what, exactly, could be done about the problem of food waste in the US.

Kalb is a serial entrepreneur whose first business was a food distribution company called Molly’s, which was sold to a company called HomeGrown back in 2019.

A graduate of Western Washington University with a degree in actuarial science, Kalb says he started his food company to make a difference in the world. While Molly’s did, indeed, promote healthy eating, the problem that Kalb and Bede, a former Microsoft engineer, are tackling at Shelf Engine may have even more of an impact.

Food waste isn’t just bad for its inefficiency in the face of a massive problem in the US with food insecurity for citizens, it’s also bad for the environment.

Shelf Engine proposes to tackle the problem by providing demand forecasting for perishable food items. The idea is to wring inefficiencies out of the ordering system. Typically about a third of food gets thrown out of the bakery section and other highly perishable goods stocked on store shelves. Shelf Engine guarantees use for the store and any items that remain unsold the company will pay for.

Image: OstapenkoOlena/iStock

Shelf Engine gets information about how much sales a store typically sees for particular items and can then predict how much demand for a particular product there will be. The company makes money off of the arbitrage between how much it pays for goods from vendors and how much it sells to grocers.

It allows groceries to lower the food waste and have a broader variety of products on shelves for customers.

Shelf Engine initially went to market with a product that it was hoping to sell to groceries, but found more traction by becoming a marketplace and perfecting its models on how much of a particular item needs to go on store shelves.

The next item on the agenda for Bede and Kalb is to get insights into secondary sources like imperfect produce resellers or other grocery stores that work as an outlet.

The business model is already showing results at around 400 stores in the Northwest, according to Kalb and it now has another $12 million in financing to go to market.

The funds came from Garry Tan’s Initialized and GGV (and GGV managing director Hans Tung has a seat on the company’s board). Other investors in the company include Foundation Capital, Bain Capital, 1984 and Correlation Ventures .

Kalb said the money from the round will be used to scale up the engineering team and its sales and acquisition process.

The investment in Shelf Engine is part of a wave of new technology applications coming to the grocery store, as Sunny Dhillon, a partner at Signia Ventures, wrote in a piece for TechCrunch’s Extra Crunch.

“Grocery margins will always be razor thin, and the difference between a profitable and unprofitable grocer is often just cents on the dollar,” Dhillon wrote. “Thus, as the adoption of e-grocery becomes more commonplace, retailers must not only optimize their fulfillment operations (e.g, MFCs), but also the logistics of delivery to a customer’s doorstep to ensure speed and quality (e.g., darkstores).”

Beyond Dhillon’s version of a delivery only grocery network with mobile fulfillment centers and dark stores, there’s a lot of room for chains with existing real estate and bespoke shopping options to increase their margins on perishable goods as well.

 

#bain-capital, #correlation-ventures, #e-grocery, #engineer, #food, #food-waste, #foundation-capital, #ggv, #grocery-store, #hans-tung, #marketing, #microsoft, #molly, #packaging, #partner, #real-estate, #retail, #retailers, #salt-lake-city, #seattle, #serial-entrepreneur, #shelf-engine, #signia-ventures, #sunny-dhillon, #tc, #united-states

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How D2C brands are holding up during the pandemic

A lot has happened during the COVID-19 lockdowns in terms of human behavior.

E-commerce seems to have grown at the same rate in the last two months as it did in the last seven years. PipeCandy has been analyzing the segments within e-commerce that stand to gain the most with this “once in a generation” change.

Image Credits: PipeCandy

One segment that has dominated the news and the M&A cycles within e-commerce is direct-to-consumer. The segment moved from being a disruptor of old-guard CPG companies to a channel strategy that every CPG company is now embracing. With lackluster IPOs of the likes of Casper, the closing of disruptor brands like Brandless and Walmart’s decision to not pursue D2C acquisitions, the era of hyper-funded digital natives is over.

So what’s up with digital natives now? How has COVID-19 played out for the segment?

Firstly, a comparison that some of you may not take very kindly. We are comparing actual retail sales from the U.S. Census Bureau with unique visitors from our sample of nearly 1,000 digital native brands. The directionality alone tells the story, even if we can’t compare the same metrics.

Image Credits: PipeCandy

What’s interesting about furniture is that people are buying storage units and shelves and tables for their home offices. Also, they are spending on mattresses. The rest of the furniture categories aren’t finding traction. That said, this observation is limited to D2C.

Now let’s see some D2C categories and their traffic growth trends over different slices of time.

Image Credits: PipeCandy

What you see above is a set of D2C category median growth rates of April 2020 compared to average growth rates in various time slices in 2019. We took April 2020 as the anchor month and compared against (1) the monthly average for every brand in the previous year and, (2) the month where they had the peak traffic.

The idea was to see not just whether these brands grew in April 2020 but also to see if they hit their peaks they hit in 2019. We have a few other cuts in our report (Q1 2019 versus Q1 2020, accounting for launch PR-linked peaks, etc.).

Fitness, pets and grocery registered healthy growth compared to 2019 averages, while the declines in furniture, apparel and kids have been minimal (when compared to the carnage we see in retail). But, when we see the data cut for peak 2019 versus April 2020, we see fitness and pets as categories have been resilient. We are still not back to the glory days of D2C in several other categories. Several categories and companies have been having a second lease of life. So what seems like a jaded performance when compared to the peak of 2019 is actually good news for several brands. They’d have been counted out but for COVID-19.

One way to truly size up the impact of COVID-19 is to look at the traffic numbers of these brands in 2019 and project the trends for 2020 assuming it would be a normal world from the vantage point of December 2019 and compare them with how things actually panned out between January and April 2020. We did consider and account for blips in numbers due to launch/PR activities in our forecasting model. The more positive the deviation is of the actual from the forecast, the better the category is doing.

I can only hypothesize that a certain virus caused the change in the trajectory.

Without, further ado, here is what we found:

Image Credits: PipeCandy

Kids, cookware and kitchen tools, apparel, fine jewelry, fashion, women’s health, mattresses, furniture and skincare actually deviated negatively from the forecast. This is not to say that these categories declined. We are actually saying that these categories didn’t keep up with the growth trends they orchestrated in 2019. That said, the devil is in the details. For instance, within furniture, there is a category of D2C brands that sell shelves and office furniture. Consumers did invest in them heavily, presumably to allow participants in the Zoom call to absorb more the titles of the books stacked in those shelves than from the calls themselves.

Wine/spirits, grocery, fitness, baby care, pets and nutraceuticals did better than anticipated. Basically, anything that helped numb the reality (alcohol), sweeten the reality (food), distract from the reality (baby care and pets), survive the reality (fitness) or hallucinate an alternative reality (nutraceuticals) did well.

A summary of our findings (free) and a detailed report on the impact of COVID-19 on direct-to-consumer brands (behind paywall) can be found on PipeCandy’s website.

I will leave you with another interesting conclusion we arrived at, through further research that is currently underway: The spotlight category in e-commerce is not direct to consumer — it is the mid-market and large pure-play e-commerce companies. It is one segment where the compounded quarterly growth rate of active companies is better than the 2019 average.

We will have more to share in the coming weeks, so stay tuned!

#column, #coronavirus, #covid-19, #d2c, #e-commerce, #ecommerce, #retailers, #tc, #trade

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Nuro’s self-driving vehicles to deliver prescriptions for CVS Pharmacy

Nuro, the autonomous robotics startup that has raised more than $1 billion from Softbank Vision Fund, Greylock and other investors, said Thursday it will test prescription delivery in Houston through a partnership with CVS Pharmacy. The pilot, which will use a fleet of the startup’s autonomous Toyota Prius vehicles and transition to using its custom-built R2 delivery bots, is slated to begin in June.

The partnership marks Nuro’s expansion beyond groceries and into healthcare. Last month, the startup dipped its autonomous toe in the healthcare field through a program to delivery food and medical supplies at temporary field hospitals in California set up in response to the COVID-19 pandemic.

The pilot program centers on one CVS Pharmacy in Bellaire, Texas and will serve customers across three zip codes. Customers who place prescription orders via CVS’ website or pharmacy app will be given the option to choose an autonomous delivery option. These pharmacy customers will also be able add other non-prescription items to their order.

Once the autonomous vehicle arrives, customers will need to confirm their identification to unlock their delivery. Deliveries will be free of charge for CVS Pharmacy customers.

“We are seeing an increased demand for prescription delivery,” Ryan Rumbarger, senior vice
president of store operations at CVS Health, said in a prepared statement. “We want to give our customers more choice in how they can quickly access the medications they need when it’s not convenient for them to visit one of our pharmacy locations.”

Nuro is already operating in the Houston area. Walmart announced in December a pilot program to test autonomous grocery delivery in the Houston market using Nuro’s autonomous vehicles. Under the pilot, Nuro’s vehicles deliver Walmart online grocery orders to a select group of customers who opt into the service in Houston. The autonomous delivery service involves R2, Nuro’s custom-built delivery vehicle that carries products only, with no on-board drivers or passengers, as well as autonomous Toyota Priuses that deliver groceries.

Nuro also partnered with Kroger (Fry’s) in 2018 to test autonomous Prius vehicles and its first-generation custom-built robot known as R1. The R1 autonomous vehicle was operating as a driverless service without a safety driver on board in the Phoenix suburb of Scottsdale. In March 2019, Nuro moved the service with Kroger to Houston, beginning with autonomous Priuses.

nuro sleep train autonomous

Image Credits: Nuro

The company’s contactless delivery program shuttling medical supplies and food is also continuing. Under that program, which began in late April, Nuro’s R2 bots are used at two events centers — in San Mateo and the Sleep Train Arena in Sacramento — that have been turned into temporary healthcare facilities for COVID-19 patients. Nuro is delivering meals and equipment to more than 50 medical staff at both sites every week.

It’s unclear how long the field hospital program will continue. Last week, there were 25 patients across the two sites. The Sleep Train Arena is accepting patients through June 30 via California Office of Emergency Services. The hospital may be converted to a shelter for those affected by fires through the end of this year.

#automotive, #companies, #cvs, #cvs-health, #cvs-pharmacy, #dave-ferguson, #houston, #nuro, #pharmacy, #retailers, #select, #softbank, #toyota, #transportation, #walmart

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Impossible Foods rolls out to nearly 1,000 new grocery stores and supermarkets

Starting tomorrow, 777 supermarkets in California, Illinois, Indiana, Iowa and Nevada will begin stocking the Impossible Foods plant-based meat substitute.

Fueling the increased distribution and a push to expand its product suite and geographic footprint domestically and internationally is a $500 million round of funding the company closed in March.

Some of that money is supporting the company’s debut at stores like Albertsons, Jewel-Osco, Pavilions, Safeway and Vons.

In all, the company said it would be in nearly 1,000 grocery stores by tomorrow. That includes all Albertsons, Vons, Pavilions and Gelson’s Markets in Southern California; all Safeway stores in Northern California and Nevada; Jewel-Osco stores in Chicago, eastern Iowa and northwest Indiana; Wegmans stores on the East Coast and Fairway markets in and around New York.

Since its debut in September, the company said it was the number one item sold at the locations it was available on the East and West coasts.

The company’s 12-ounce packages are sold for somewhere between $8.99 and $9.99 and it plans to soon introduce the Impossible Burger at even more stores nationwide.

“We’ve always planned on a dramatic surge in retail for 2020 — but with more and more Americans’ eating at home, we’ve received requests from retailers and consumers alike,” said Impossible Foods’ president Dennis Woodside, in a statement. “Our existing retail partners have achieved record sales of Impossible Burger in recent weeks, and we are moving as quickly as possible to expand with retailers nationwide.”

Even as the company announced its expansion, it made moves to assuage any consumer concerns over the processes in place at its manufacturing facilities.

Impossible Foods said it had instituted mandatory work from home policies for all of its employees who can telecommute; restricted visitors to its facilities and those operated by co-manufacturers; banned all work-related travel; and implemented new sanitizing and disinfection procedures at its workplaces.

“Our No. 1 priority is the safety of our employees, customers and consumers,” Woodside said. “And we recognize our responsibility for the welfare of our community, including the entire San Francisco Bay Area, our global supplier and customer network, millions of customers, and billions of people who are relying on food manufacturers to produce supplies in times of need.”

The company said it was proceeding with its research and development initiatives; accelerating the ramp of its production facilities; and moving to broadly commercialize its Impossible Sausage and Impossible Pork products.

Impossible Foods has raised $1.3 billion from investors, including Mirae Asset Global Investments, Khosla Ventures, Horizons Ventures and Temasek.