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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New York-based indoor ag company Gotham Greens raises $87 million

Lettuce celebrate the rise of indoor agriculture.

In the past few months AppHarvest, a developer of greenhouse tomato farms went public through a special purpose acquisition vehicle, vertical farming giant Plenty raised $140 million, and now Gotham Greens, which is developing its own network of greenhouses, is announcing the close of $87 million in new funding.

These new agriculture companies certainly have a green thumb when it comes to raising a cornucopia of capital.

Gotham Greens latest round takes the company to a whopping total of $130 million in funding since its launch. Investors in the round included Manna Tree and The Silverman Group.

While App Harvest has taken to tomatoes in its attempt to ketchup with the leading agricultural companies, Gotham Greens has decided to let its hydroponically grown leafy greens lead the way to riches.

The company said it would use the latest funding to continue developing more greenhouse across the U.S. and bring new vegetables to market.

“Given increasing challenges facing centralized food supply chains, combined with rapidly shifting consumer preferences, Gotham Greens is focused on expanding its regional growing operations and distribution capabilities at one of the most critical periods for America,” said Viraj Puri, the co-founder and chief executive of Gotham Greens, in a statement. 

The company already sells its greens in over 40 states and operates greenhouses in Chicago, Providence, R.I., Baltimore and Denver. From those greenhouses the company distributes to 2,000 retail locations including Whole Foods Markets, Albertsons stores, Meijer, Target, King Soopers, Harris Teeter, ShopRite and Sprouts. 

And Gotham Greens has already begun to expand its product portfolio. The company now sells packaged salads, cooking sauces, and salad bowls in addition to its greens.

Assorted packages of Gotham Greens lettuces on a white field. Image Credit: Gotham Greens

#agriculture, #albertsons, #america, #baltimore, #chicago, #denver, #gotham-greens, #greenhouse, #greens, #hydroponics, #king, #plenty, #providence, #rhode-island, #target, #tc, #united-states, #urban-agriculture, #whole-foods

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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

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Businesses reducing trash and plastic consumption are beginning to look like treasure to some VCs

Zuleyka Strasner didn’t set out to become an advocate for zero-waste consumption.

The former manager of partner operations at Felicis Ventures had initially pursued a career in politics in the UK before a move to San Francisco with her husband. It was on their honeymoon on a small island in the Caribbean that Strasner says she first saw the ways in which plastic use destroyed the environment.

That experience turned the onetime political operative into a zero-waste crusader — a transformation that culminated in the creation of Zero Grocery, a subscription-based grocery delivery service that sells all of its goods in zero-waste packaging.

Strasner returned from Corn Island with a purpose to reduce her plastic use and found inspiration in the social media posts and work of women like Anamarie Shreves, the founder of Fort NegritaLauren Singer, who became known for her TedX Teen talk on living waste free and launched Package Free; and Bea Johnson, who became a social media celebrity for her work reducing consumption and living waste-free.

Following in the zero-waste footsteps of others eventually led Strasner from her home in Redwood City, Calif. to San Francisco’s Rainbow Grocery, a food co-op dedicated to sustainable business practices. That 45 minute drive and hour spent in a store juggling jars, bottles, and shakers to perform basic shopping tasks convinced Strasner that there had to be a better way to shop zero-waste — especially for busy parents, professionals, and singles.

So she built one.

“I may have had no team and no money, but I had data. I spent 6 months alpha testing the early version of Zero. I was working from my apartment (cue cliché) getting real sign-ups, servicing real customers and doing a lot of growth hacking,” Strasner wrote in a post on Medium about the company’s early fundraising efforts. “It was really janky, but going between research reports, market data and the data I was collecting from real-people, I had something tangible to put under investors noses to back up how Zero looks at scale.”

Living through COVID-19 is a literal trash heap 

Strasner’s push to create alternatives to single-use plastic in grocery delivery comes as the use of single use plastics skyrockets and grocery delivery services surge — putting her new company in the enviable position of solving an obvious problem that’s becoming more apparent to everyone.

An August study from the investment bank Jefferies on single-use plastic identified the surge in plastic use and laid the blame at the feet of the pandemic.

“Bans and taxes have been rolled back, physical and chemical recycling activity has decreased, and virus concerns may have reduced consumers’ desire to minimize consumption of single-use plastics,” said the report, entitled “Drowning in Plastics,” which was quoted in Fortune.

While much of the use in home delivery and consumer goods has been offset by reductions in the use of plastics in manufacturing as industries slowed down production, the reopening of international economies means that there’s the potential for renewed industrial use even as consumers renew their love affair with plastic.

Companies like Strasner’s present a way forward for consumers willing to pay a premium for the waste reduction — and she’s not alone.

Changing the supply chain for food and consumer packaged goods 

Lauren Singer was already two years into operating her (profitable and cash-flow positive since “day one”) Brooklyn-based and e-commerce stores when she raised $4.5 million for her plastic free and zero-waste wares last September.

The image of the years worth of waste she claimed to be able to fit into a single jar had made her a viral sensation on Instagram and she’d managed to turn that post, and her celebrity, into a business. She wasn’t alone. Bea Johnson, another star of the zero-waste movement wrote the book on going zero waste and has turned that into a business of her own.

At Package Free, products range from a line of plastic-free and zero-waste lifestyle products like bamboo toothbrushes and mason jars, to natural tooth powder alongside natural pacifiers, and a dog shampoo bar. The company’s packaging is composed of 100% up-cycled post-consumer box with paper wrapping and paper tape, according to the company.

Meanwhile, another New York-based startup, Fresh Bowl, raised $2.1 million in January to bring zero-waste packaging and circular economic principles to the bowl business. The company, founded by Zach Lawless, Chloe Vichot and Paul Christophe, uses vending machines around New York that could hold roughly 220 prepared meals with a five-day shelf-life. Those meals were distributed in reusable containers that customers could return for a refund of a deposit.

Before the pandemic hit in the early months of the company’s financing each of its machines were on track to bring in $75,000 in revenue — and roughly 85% of the company’s containers were being returned for re-use according to a January interview with chief executive officer Zach Lawless.

Roughly 40% of landfilled material is food or food packaging, Lawless said. “For consumers it’s hard to make that trade-off between convenience and sustainability,” he said. Companies like Fresh Bowl and Strasner’s Zero Grocery are each trying to make that tradeoff a little easier.

Designing a zero-waste delivery service

Zero Grocery currently counts around 850 unique items in stock and expects to be over 1,000 items at the end of the year — and all delivered in reusable or compostable packaging, according to Strasner.

“Our aim is to not create anything that would go into the landfill and really limit what would need to be recycled. For the products that are single use… they are banded toilet rolls and they’re wrapped in a single sheet of paper. It’s all compostable,” said Strasner. 

Zero Grocery’s current operations are confined to the Bay Area, but the company has seen its growth triple when the pandemic hit in March and then grow twenty times over the ensuing months, according to Strasner. And unlike companies like Singer’s and Lawless’, Strasner didn’t have the luxury of reaching out to a handful of investors for a small cap table.

“I have continuously raised throughout this period to get to this moment in time. Initially i believed that we would have a more typical round structure, maybe myself misunderstanding that I’m an atypical founder,” Strasner said. As a Black, trans, woman, the path to “yes” from investors involved over 250 pitches and an undue amount of “no’s”. 

An early champion was Charles Hudson, the founder of Precursor Ventures, who helped lead a seed round for the company back in 2019. Hudson’s investment allowed the company to launch its first service, an exclusive, á la carte, home delivery service. It was basically Strasner wheeling a cart brimming with produce, grains and compostable items into customers’ homes and filling their own jars.

Zero Grocery chief executive Zuleyka Strasner on an early delivery run for her company. Image Credit: Zero Grocery

Ultimately untenable, the first service gave Strasner a view into the ways in which grocery delivery worked, and allowed her to create the second version of the service.

That was more like a latter day milkman service, where the company would deliver next-day, door-to-door delivery of over 100 zero-waste products. These were pre-packaged goods that the company just dropped off and then had customers return (a similar thesis to Fresh Bowl’s retail strategy).

That was around November 2019, when the company launched publicly across the Bay Area with our new offering. The initial traction allowed Strasner to raise another $500,000 from existing investors and new firms like Chingona Ventures and Cleo Capital.

“At that point we had sixty members on the platform and had done four figures of revenue of that month,” Strasner said.

Then COVID-19 hit the Bay Area and sales started soaring. To meet the needs of a strained supply chain — since the company doesn’t use any third-party services for delivery and involves a heavy bit of sanitization of containers so they can be re-used — Zero Grocery raised another $700,00 from Incite.org, Gaingels, Arlan Hamilton and MaC Ventures.

As Strasner wrote in a Medium post:

When COVID-19 hit the US, our team was among the first companies to go into lockdown. By late February, only essential personnel were on the warehouse floor for order preparation and delivery in head-to-toe PPE. Soon after that, the Bay Area went into full shelter-in-place.

Much like other companies in the grocery delivery space, our demand skyrocketed. To keep up, we grew our team in half the time we anticipated and launched features that were half-baked. Customer experience is tantamount, and our underdog team fought tooth-and-nail to preserve that despite long hours, little sleep, and no time for planning. We abandoned our notions of roles and split up the responsibilities of customer service, order packing, feature development, and more.

Strasner’s experiences as an immigrant, Black, trans founder mean that she thinks about sustainability not just in environmental terms, but also social sustainability. That’s why she works with the staffing service R3 Score to provide opportunities for people who had criminal records. The service provides a risk analysis for employers of job applicants who have a criminal record, to give employers a better sense of their viability as an employee.,

As she told Fast Company, “This is a highly capable, untapped labor force who is ready to work and is actively looking for opportunities… This is not merely a COVID stopgap measure for us; it’s something we’re incorporating into our business for the long-term.”

More money, fewer problems? 

Zero Grocery now counts many thousands of customers on its service and has just raised another $3 million, led by the investment firm 1984, to grow the business. The company charges $25 for a membership that includes free deliveries and collects empty containers. Non-members pay a $7.99 delivery free for groceries priced competitively with Whole Foods and other higher end grocery options.

Right now, Zero Grocery occupies the as the only fully zero-waste online grocery store in the U.S., and its numbers are growing quickly.

But that kind of success can breed competition, and there are certainly no shortage of would-be competitors waiting in the wings.

Already some of the largest consumer packaged goods companies in the U.S. have rolled out a version of zero-waste delivery services for their products. These are companies like Procter & Gamble and Froneri, the owner of ice cream brand Haagen Dazs (and others). In April, their reusable, no-waste delivery service Loop launched nationwide to provide customers across the country with recyclable and reusable packaged containers.

The commercialization of new kinds of packaging technologies from companies like NotPla, Varden, and Vericool mean that compostable material packaging could become a wider solution to the waste dilemma.

Still, these solutions to packaging waste come with their own issues, like the sustainability of the supply chain used to make them and the carbon footprint of the manufacturing processes. In instances like these reducing the need to manufacture new material is likely the most sustainable option.

And, in many cases, companies like Zero Grocer help their vendors do a lot of the work to reduce the footprint of their own supply chains.

“A lot of work is to enable them to exist within a plastic free supply chain using our technology,” said Strasner of the work she’d done with vendors. 

“I started Zero to make zero-waste grocery shopping effortless and empower people to protect the planet while shopping conveniently,” she said. That’s a notion everyone can treasure. 

#arlan-hamilton, #charles-hudson, #cleo-capital, #economy, #felicis-ventures, #food, #grocery-store, #haagen-dazs, #lauren-singer, #mac-ventures, #precursor-ventures, #procter-gamble, #tc, #varden, #vericool, #whole-foods

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Beyond Meat is introducing pre-packaged meatballs at stores across America

Indulging in American food companies’ favorite pastime of marketing innovations that no one needs but potentially everyone wants, Beyond Meat is launching Beyond Meatballs in grocery stores nationwide this week.

The new product can be put on top of spaghetti, all covered with cheese, and comes pre-spiced with a blend of Italian spices, according to a company statement.

The company’s meatballs have 30% less saturated fat and sodium than real meat and will be available at Whole Foods, Stop & Shop, Sprouts, Harris Teeter, Kroger and Albertsons, and more by early October, according to the statement.

The suggested retail price for these pre-spiced and pre-rolled protein replacement balls of soy is $6.99 for 12 meatballs.

For Beyond Meat, which already has a line of breakfast sausages and pre-made burgers under the “Cookout Classic” brand, the new product is the latest effort to win more of the meat aisle at the 26,000 outlets across the U.S. that stock the company’s products.

“We’re thrilled to introduce Beyond Meatballs as they deliver on consumers’ growing demand for delicious and nutritious plant-based meat options without GMOs or synthetic ingredients,” said Stuart Kronauge, Chief Marketing Officer, Beyond Meat. “We are proud to introduce our newest innovation at retailers nationwide and know our fans will be excited about the great taste and convenience of Beyond Meatballs.”

As part of the marketing campaign the company is offering free meatballs and spaghetti or a meatball hero at Beyond Meatball pop-up shops in New York and Los Angeles on Wednesday.

Would-be Beyond Meatball eaters will have to reserve their complimentary meal and pick-up time in advance via The Beyond Meatball Shop’s LA and NY pages on Resy, while supplies last.

#albertsons, #beyond-meat, #food, #food-and-drink, #kroger, #los-angeles, #louisiana, #meatballs, #new-york, #tc, #united-states, #whole-foods

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That Whole Foods is an Amazon warehouse; get used to it

Earlier this week, in Brooklyn, near the waterfront, Amazon opened what looks from the outside like a typical Whole Foods store. It isn’t open to the public, however; it’s a fulfillment center.

“Grocery delivery continues to be one of the fastest-growing businesses at Amazon,” the company said in a statement about the location, noting that it has hired hundreds of new employees to aid in its operations. “We’re thrilled to increase access to grocery delivery.”

Americans sort of knew this was coming. Still, the pace at which retail spaces of all sizes are being converted into e-commerce fulfillment centers has become a bit breathtaking. According to the commercial real estate services firm CBRE, since 2017 at least 59 projects in the U.S. have centered on converting 14 million square feet of retail space into 15.5 million square feet of industrial space, and that trend is “absolutely going to continue,” says Matthew Walaszek, an associate director of industrial and logistics research at CBRE.

It has played out fairly quietly to date, save for the occasional headline about, well, Amazon, typically. Last month, for example, the Wall Street Journal reported that the ever-expanding conglomerate is in talks with the largest mall owner in the U.S., Simon Property Group, about converting both former and current JCPenney and Sears stores into distribution hubs from which it can deliver packages.

Amazon needs the space. Meanwhile, Simon needs a tenant that can pay its bills. That’s a tall order right now for many brick-and-mortar retailers that were already under pressure and watched foot traffic disappear entirely with as the country largely shut down in March in response to the pandemic threat.

In fact, despite that Simon and an apparel licensing firm, Authentic Brands, recently partnered to buy apparel retailers Brooks Brothers and Lucky Brand out of bankruptcy (Simon and fellow mall operator Brookfield Property Partners are also in advanced talks to buy J.C. Penney), some reportedly view the moves as a means to buy time as these real estate companies reconfigure their properties to accommodate one anchor tenant.

That exact scenario has already played out at Randall Park Mall in a Northeast Ohio suburb (a mall, incidentally, that this editor occasionally frequented as a teenager growing up in Cleveland).

Once filled with gaudy stores like Piercing Pagoda and Spencer’s Gifts, the mall — which featured marbled columns and was among the world’s largest enclosed shopping centers when it opened in 1976 —  is now the site of an 855,000-square-foot facility filled with mobile robotic fulfillment systems that make it easier for Amazon to more quickly deliver packages.

A local outlet reported its conveyor belts would stretch farther than 10 miles if laid in a straight line.

Yet it isn’t always Amazon that’s snapping up these properties. There are a number of other large e-commerce players that are rapidly expanding their physical footprint right now, along with opportunistic developers betting the U.S. will also focus more on domestic manufacturing facilities in a post-COVID world.

That’s saying nothing of big grocery chains that, like Amazon’s Whole Foods, are increasingly focused on developing fulfillment centers — sometimes right inside a store that sees foot traffic. At an Albertson’s in South San Francisco, for example, customers blithely shop around an automated rack-and-tote system at the store’s center that preps orders for pickup and delivery.

To a certain extent, this ongoing shift in use was inevitable. The U.S. has the strange distinction of featuring 24 square feet of retail space per capita. By comparison, Canada and Australia have 16.8 square feet and 11.2 square feet per capita, respectively.

“We just have a lot of retail — we are over-retailed — so it’s not surprising that properties are struggling,” Walaszek says.

The pandemic has only poured figurative fuel on fire.

Forbes estimates that upwards of 14,000 real-world retail stores will close in the U.S. this year. Meanwhile, during the first six months of the year, consumers spent $347.26 billion online with U.S. retailers, up 30.1% from $266.84 billion for the same period in 2019, according to U.S. Department of Commerce data parsed by the news and research outfit Digital Commerce. That’s up from the 12.7% upswing seen during the first half of 2019.

Retail properties converted to industrial use remains a niche trend when considering there is 14.5 billion square feet of industrial real estate in the U.S. and it won’t transform life as we know it overnight.

For one thing, retail-to-industrial conversions involve buy-in from local zoning officials whose constituents are often concerned about congestion, noise and pollution, among other things.

Retail rents are also significantly higher than industrial rents — more than double in some markets — so it’s “a hard sell to a retail landlord to convert to industrial where revenues aren’t going to be as high,” notes Walaszek.

Still, thanks to a confluence of events — including the runaway growth of Amazon specifically —  both big and small fulfillment centers are beginning to spring up fast.

As Amazon’s first “permanent online-only” Whole Foods in Brooklyn underscores, they may wind up in what seem like the unlikeliest of places, too

#amazon, #cbre, #ecommerce, #fulfillment, #real-estate, #tc, #warehouses, #whole-foods

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From farm to phone: A paradigm shift in grocery

In the blink of an eye, millennials, moms and grandparents alike have abandoned the decades-old practice of wandering dusty grocery aisles for the convenient and novel use of online grocery. While Instacart, Amazon Fresh and others have been offering an alternative to brick-and-mortar grocery for years, it is the pandemic that has classified them as essential businesses and more than ever afforded them a clear competitive advantage.

But these past couple months have seen not only drastic changes in consumer behavior, but also fundamental shifts in the business models adopted by grocers worldwide. These shifts are not temporary — indeed, they are here to stay, corona-catalyzed and permanent.

Fulfillment innovation can drive efficiency and cost savings

For the consumer, online grocery generally starts and ends the same way: They place their order on an app or website, and hours later it shows up at their door. But the ways those orders are being fulfilled run the gamut.

The most widely known approach comes from Instacart, which relies on hundreds of thousands of human shoppers fulfilling customers’ online grocery orders by shopping side-by-side with regular brick-and-mortar customers. The model clearly works for Instacart, which is valued at nearly $14 billion after its latest raise.

However, this model is far from ideal. Even pre-COVID, shoppers were known to crowd out regular customers, not to mention introduce high delivery costs and the element of human error to the fulfillment process.

One obvious solution has become the central fulfillment center, or CFC. CFCs are large, standalone warehouses — often serving distinct geographies — that can supply both brick-and-mortar stores and online grocery deliveries. As order volumes rise and consumers demand faster and faster delivery times, innovation has already been infused into the CFC model.

Some grocers, notably Kroger, believe that introducing robotic automation into CFCs via solutions such as Ocado can create economies of scale for fulfillment. These CFCs deploy fulfillment robots, controlled by air-traffic control tech, that run along a grid system and move goods via categorized crates. Kroger is continuing its investment in the model, recently announcing three new Ocado-automated CFCs in the West, Pacific Northwest and Great Lakes regions of the United States. The smallest location is over 150,000 square feet.

While Kroger remains uniquely attached to the CFC model, Albertsons/Safeway, Walmart and many others prefer the microfulfillment center (MFC). MFCs, typically far smaller in size (think ~10,000 square feet), are automated warehouses carved out of the back of existing stores that drive faster fulfillment times in a smaller geographic area, allowing chain stores to use their numerous geographic locations to act as effective fulfillment/delivery hubs for e-grocery coverage.

#advertising-tech, #albertsons, #amazon, #automation, #column, #e-grocery, #ecommerce, #extra-crunch, #food, #grocery-store, #instacart, #kroger, #logistics, #market-analysis, #merchandising, #michael-moritz, #natural-language-processing, #ocado, #online-grocery, #robotics, #safeway, #signia-venture-partners, #startups, #walmart, #whole-foods

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Nuggs rebrands as Simulate with new cash, a new CTO and an expanded line of faux-meat foods

Nuggs, the alternative-meat company founded by serial entrepreneur Ben Pasternak (who previously co-founded the social media app Monkey), has raised $4.1 million and gotten itself a new name and a new CTO as it looks to move beyond chicken nuggets.

Now called Simulate, Pasternak’s startup is readying the launch of new products including spicy nuggets, a “chicken burger product” and, eventually, a hot dog, that required a branding change to befit its newly broadened ambitions in the ultra-competitive industry out to reform consumers’ carnivorous impulses.

Since Pasternak first began pitching his direct to consumer chicken nugget replacements a bit over a year ago, the company has sold 1 million pounds of nuggets. Over the next week, Simulate’s frozen nuggets will make their debut in around 30 Gelson’s supermarkets in California. The company has plans to release its chicken patty within the next few months and a hot dog replacement, DOGGS, in the fourth quarter.

Pasternak began to rebrand earlier this summer when his company launched the second iteration of its nuggets in June.

In addition to his new brand, and new investors including Lerer Hippeau,<span style=”font-weight: 400;”> AgFunder, Reddit co-founder Alexis Ohanian; former Whole Foods chief executive Walter Robb, and model Jasmine Tookes; Pasternak also has a new chief technology officer. 

Bringing Thierry Saint-Denis, the former senior director of research and innovation at Danone, on as CTO is a coup for the company. As a business Nuggs seemed to be more of a marketing play backed by a savvy founder and a frozen food giant that wanted to make a play for the burgeoning market for meat substitutes and replacements. Now, with Saint-Denis, the company brings on a developer of food products that have reached nearly $1 billion in sales who holds over 14 patents related to functional ingredients, probiotics, and enzymes. 

With the new executive in place, new and previous investors like McCain Foods, Rainfall Ventures, Maven Ventures, NOMO Ventures, MTV founder Bob Pittman, and Casper founder Neil Parikh are now backing a company with a bit more technical heft behind it.  

Not that Nuggs wasn’t improving its product line over the past year. Pasternak touts the company’s iterative approach to product development, embodied in its different “release notes” as the company toyed with different formulations.

That software driven approach may also yield other sales options, like a subscription service, Pasternak said. “We have seen this core community of people obsessively purchasing the new versions. We are looking at launching some kind of beta testing subscription thing shortly.”

#alexis-ohanian, #bob-pittman, #casper, #chief-technology-officer, #co-founder, #cto, #initialized, #lerer-hippeau, #tc, #whole-foods

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Amazon replaces COVID-19 “hazard pay” with one-time $500 bonus

A uniformed woman lifts a small parcel.

Enlarge / An Amazon worker in a fulfillment center in the Orlando area, April 2019. (credit: Paul Hennessy | NurPhoto | Getty Images)

After eliminating temporary “hazard” pay raises, Amazon is saying “thank you” to its hourly workers with a one-time bonus of $500, while at least one Amazon warehouse has been found to have a COVID-19 rate four times higher than the general population nearby.

Amazon yesterday announced its one-time bonuses for “front-line” employees. Full-time workers in warehouses and Whole Foods stores, as well as full-time delivery drivers, will receive $500. Part-time workers in those roles will get $250, and Amazon Flex drivers who worked 10 hours or more will get $150. Managers on-site in distribution centers or Whole Foods stores will get $1,000, and owners of the third-party firms that handle delivery for Amazon will get $3,000.

The company saw a massive spike in consumer demand as in-person retail shuttered around the nation and the world this spring due to the COVID-19 pandemic. Amazon hired an additional 175,000 employees in its warehouses, logistics, and grocery businesses since early March to meet increased demand. The company also increased wages by $2 in warehouses, to a minimum of $17 per hour, to get new workers in the door.

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#amazon, #biz-it, #coronavirus, #covid-19, #hazard-pay, #labor, #policy, #whole-foods

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Why are unicorns pushing back IPOs when the Nasdaq is near record highs?

The unicorns are still at it, Vision Fund 2 or no Vision Fund 2.

This week, Instacart announced that it has raised fresh capital at a valuation north of $13 billion. And, on the tail of that news item, DoorDash is looking to add more cash at a valuation that could stretch to a pre-money valuation that exceeds $15 billion, according to The Wall Street Journal.

Both announcements make it plain that late-stage unicorns are still able to attract huge sums despite a putatively uncertain, if recently excitable IPO market.

It’s an interesting state of affairs, as the prices that super-late-stage unicorns are able to charge private investors push their valuations so high that only the largest and richest companies might be able to afford buying them. The result could be a closed M&A window that leaves only an exit hatch marked “IPO.”

Amazon, for example, paid around $13.7 billion for Whole Foods, a chain of U.S. grocery stores that the technology giant also uses as distribution points for parcel delivery. Instacart, the grocery delivery service, is now worth $13.7 billion as well.

As the private company’s final investors won’t want to merely break even on their investment, Instacart

#amazon, #chime, #doordash, #earnings, #extra-crunch, #finance, #food-delivery, #fundings-exits, #initial-public-offering, #instacart, #market-analysis, #robinhood, #startups, #the-exchange, #unicorn, #vision-fund, #whole-foods

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In a letter to Amazon, 13 AGs call for increased transparency and stronger worker protections

In an open letter to Jeff Bezos and Whole Foods CEO John Mackey, a coalition of 13 CEOs have jointly called on Amazon to strengthen protections for a strained workforce amid the COVID-19 pandemic. The letter, penned by Massachusetts state AG Maura Healey — along with attorneys general from  Connecticut, Delaware, Illinois, Maryland, Michigan, Minnesota, New Mexico, New York, Oregon, Pennsylvania and D.C. — follows a similar note sent by the members in late March.

“Amazon and Whole Foods must take every possible step to protect their employees and customers during the COVID-19 pandemic,” Healey said in a release tied to the letter. “We again call on these companies to provide assurances that they are complying with state laws and federal guidance aimed at keeping essential workers safe during this crisis.”

In particular, the note addresses questions about sick leave, safety measures, Amazon’s policies around notifying workers and a recent string of high-profile firings. That last bit was enough to warrant a similarly-themed letter from nine prominent Democratic Senators, inquiring whether the company had fired employees in retaliation for whistleblowing around unsafe work conditions.

“Such conduct, if proven, may violate Section 11(c) of the Occupational Safety and Health Act [29 U.S.C. §660(c)], as well as laws in certain of our States that forbid retaliation,” the AGs write. “Even the perception of retaliation during this public health emergency can serve to silence employees who raise legitimate concerns about health and safety measures, and place those employees, their co-workers, customers, and the public at grave risk.”

The new letter takes the extra step of singling out the behavior of Amazon-owned Whole Foods. “We are concerned that our Offices and the public are learning of these serious developments through secondhand media reports, rather than hearing directly from Whole Foods,” the letter adds. “Accordingly, we request that Whole Foods provide a description of its policies and processes, if any, that relate to notifying consumers, the public, and public health authorities of serious COVID-19 developments at Company stores.”

Amazon has, of course, denied allegations of firing whistleblowers and insisted that it has taken the necessary action as employees continue to work through the pandemic. The letter closes by noting that both Amazon and Whole Foods “are seeing a significant increase in sales as well, as consumers rely even more on online shopping and buy more groceries as they stay at home.”

#amazon, #coronavirus, #covid-19, #health, #whole-foods

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Workers prepare to strike May 1, amid strained pandemic working conditions

The global pandemic has tested the bounds of businesses across the world and transformed the way many of us live our lives. For those among us who are unable to leave our homes at all as COVID-19 virus rages, online retail and food services have been a kind of lifeline.

But as contact-free delivery becomes the norm, it can be easy to forgot all the people working to provide those services at risk to their health. And more often than not, employees are working for low wages or tips.

A number of protests have been organized at companies like Amazon and Instagram in the intervening weeks and months, but a wide-scale, cross-company event hasn’t really surfaced. That could change on May 1, as employees mark the longstanding tradition of International Workers’ Day with a May Day general strike.

Material for the event has been circulating online, rebadged “Essential Workers’ Day,” as a nod to the exemptions to stay at home orders for retail and food delivery, among others. The event is framed as a combination strike and boycott, targeted at Amazon/Whole Foods, Instacart and Target/Shipt (as well as Walmart and FedEx, according to various sources). 

Specific demands differ from employer to employer, but workers have broadly asked for essential health protections, sick leave and hazard pay as the pandemic has continued to wear on and profits have spiked for many providers. 

Vice spoke to Christian Smalls, one of the organizers, the Staten Island Amazon employee who was fired after organizing a walkout at one of the company’s fulfillment centers. “We formed an alliance between a bunch of different companies because we all have one common goal which is to save the lives of workers and communities,” he told the site. “Right now isn’t the time to open up the economy. Amazon is a breeding ground [for COVID] which is spreading right now through multiple facilities.”

Amazon workers have been particularly vocal about the retail giant’s response to the pandemic. In addition to Smalls, two other employees who were publicly critical of the company were fired by Amazon — though the company denied the direct link. Instacart employees have also organized boycotts and strikes, including one in late March.

“We remain singularly focused on the health and safety of the Instacart community. Our team has been diligently working to offer new policies, guidelines, product features, resources, increased bonuses, and personal protective equipment to ensure the health and safety of shoppers during this critical time,” the company said in a statement. “We welcome all feedback from shoppers and we will continue to enhance their experience to ensure this important community is supported.”

Other companies have previously issued similar statements regarding employment during the crisis. We’ve reached out to them for additional comment on the planned protests.

Update: An Amazon spokesperson offered TechCrunch the following statement,

While we respect people’s right to express themselves, we object to the irresponsible actions of labor groups in spreading misinformation and making false claims about Amazon during this unprecedented health and economic crisis. The statements made are not supported by facts or representative of the majority of the 500,000 Amazon operations employees in the U.S. who are showing up to work to support their communities. What’s true is that masks, temperature checks, hand sanitizer, increased time off, increased pay, and more are standard across our Amazon and Whole Food Market networks already. Our employees are doing incredible work for their communities every day, and we have invested heavily in their health and safety through increased safety measures and the procurement of millions of safety supplies and have invested nearly $700 million in increased pay. Working globally with our teams and third parties we have gone to extreme measures to understand and address this pandemic with more than 150 process changes to-date. We spend every day focused on what else Amazon can do to keep our people and communities safe and healthy.

#amazon, #coronavirus, #covid-19, #health, #instacart, #shipt, #strikes, #target, #whole-foods

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Amazon puts new online grocery shoppers on a waitlist

Amazon is putting new online grocery customers on a waitlist due to rising demand for its grocery pickup and delivery services amid the COVID-19 pandemic. The retailer on Monday announced it will ask new Amazon Fresh and Whole Foods Market delivery and pickup customers to sign up for a waitlist if they’re interested in either service, with some number of waitlisted customers invited to shop every week as Amazon increases its capacity for these online orders.

The company also said it will adjust store hours for some of its Whole Foods locations in order to focus its staff’s attention online on fulfilling online grocery orders during this time. One of its Whole Foods stores, located in Woodland Hills, California, is also now being used temporarily as an online-only store, meaning it will be closed to foot traffic.

Amazon has been working to address increasing consumer demand for online grocery in several ways since the health crisis began. It expanded online grocery pickup from 80 stores to over 150 in the last several weeks, and is continuing to grow that service’s footprint. It has also been releasing delivery windows throughout the day to make it easier for customers to see their options from both the Amazon Fresh and Whole Foods Market homepages. And it’s been working with the U.S. Department of Agriculture to expand online access to SNAP (commonly known as food stamps) in states including Alabama, Iowa, Nebraska, New York, Oregon, and Washington, with plans for further expansions.

This rise in demand for online grocery is not unique to Amazon, however.

As now millions of Americans are being asked to stay home amid the COVID-19 outbreak, they’ve turned to online grocery providers as a safer alternative to shopping in stores. Last week, for example, grocery delivery service Instacart rolled out several new features aimed at opening up more delivery windows as demand reached record levels. Meanwhile, Walmart’s Grocery app saw its highest-ever number of downloads to date, boosting its app’s ranking even higher than Amazon’s for a time. 

This record growth has strained these businesses, which have even seen some workers walking off the job in protest at both Instacart and Shipt. But their ability to get their demands heard has been more difficult as there are now many unemployed ready to sign up to work.

Amazon in March announced it planned to hire at least 100,000 more people to help it meet its growing customer demand, including for grocery delivery, and would invest over $350 million to support employees and partners during the COVID-19 crisis. The new hires will help Amazon to more quickly receive inventory, restock and deliver products to customers, it said, while also increasing the delivery window availability.

Today, Amazon announced its original 100,000 jobs pledge has been filled with those new employees now working at sites across the U.S. The retailer today says it’s creating an additional 75,000 jobs as demand continues to grow. The company noted, too, that anyone is welcome to apply — including those who lost their jobs in industries like hospitality, restaurants, and travel — not just those who have retail or warehouse experience.

In addition, Amazon said its original estimate of $350 million it planned to spend to increase wages will likely now be over $500 million.

#amazon, #amazon-fresh, #ecommerce, #grocery-delivery, #online-grocery, #whole-foods

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Amazon to hire 75,000 more to address increased demand due to coronavirus crisis

Amazon has already hired over 100,000 new employees in the past four weeks as a result of the uptick in demand it’s seeing due to the global coronavirus pandemic, but it’s looking to add 75,000 more workers in the U.S., across both full- and part-time positions. The company revealed the expanded hiring efforts in a blog post on Monday, where it also announced that it will be upping its total spend on pay increases to over $500 million in light of growing need.

The company says that it hopes its hiring efforts can help mitigate some of the job loss and furloughing that has resulted from the economic crisis that is also occurring as part of the COVID-19 pandemic. Amazon positioned its openings as an option for anyone looking to seek work “until things return to normal and their past employer is able to bring them back.”

The company says it’s going to continue to bolster its investment in “safety, pay and benefits” for all new and existing employees. The online retail giant has detailed some of its efforts in this regard, including rolling out temperature checks across fulfillment centers and Whole Foods stores, as well as distributing masks to employees and conducing daily audits of these practices.

Workers at Amazon facilities have undertaken various actions to protest conditions and demand better health and safety practices from their employer. Employees at a number of warehouses have tested positive for COVID-19 already, including at a facility where CEO Jeff Bezos recently toured in a bid to show solidarity with the company’s fulfillment workforce.

#amazon, #ceo, #coronavirus, #covid-19, #ecommerce, #health, #hiring, #jeff-bezos, #publishing, #tc, #united-states, #whole-foods

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