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Sent Items #101: Sunday, September 13, 2020

With Labor Day in our rearview, those of us in ecomm are thinking about peak (*peak*!) season. Next major holiday is Thanksgiving, and my gosh how things will look different this year. Please reach out if you care to chat, ask questions about your 3PL or shipping carriers. Eager to support however I can during this final sprint of the year!

One thing I am excited to share is the website re-launch of Second Marathon! I am a little sad that I can no longer claim it as “built by two ops guys”, but the modernity should help better align with the many exciting ecommerce brands we support. Please take a look and reply with any feedback!

Before we get into the meat and potatoes of this issue, I do often get asked about new apps or platforms that can help ecommerce brands. So I want to give a quick shout out to Parabola, a company I’ve gotten to know over the past year or two. They are focused on automating manual, repetitive data tasks and have some great integrations with platforms like Airtable, Shopify, Stripe, Shipstation, Google Sheets/Analytics among others. Check them out, and I’d be glad to make a warm intro if you’re interested in taking it for a spin.

Hope y’all are staying well, healthy, and hopeful. An extraordinary few months ahead. 

- Matt

Amazon Fresh brings smart grocery carts and Alexa to an LA supermarket - CNet

  • The future of in-store grocery shopping is coming, and Amazon is leading the way. The store will have Amazon's stamp on it in a few noticeable ways. It'll debut the Dash Cart, which uses weight sensors and cameras that scan your items as you're placing them in the cart, so you can skip the checkout line. 

  • Echo Show devices will be available for people to ask Alexa where certain items are located. Plus, there'll be a service counter for people to pick up orders from Amazon.com, and they can also complete returns there without having to package their items in boxes.

  • Amazon Fresh, a 35,000-square-foot store, is part of the e-retailer's growing array of grocery offerings, both digital and in the physical world, that the company is hoping to use to expand in the over $1 trillion US grocery market. Doing that will help Amazon keep up its revenue growth, build loyalty with weekly food shoppers and increase its footprint in one of the few areas of retail where it's a tiny player. As a bonus, this work will help Amazon compete against Walmart, by far the biggest grocer in the US.

  • I’ve been tweeting recently of Amazon’s foray into its own line of foods products including Hummus, Bakery, Wine, and mustards, among many other SKUs.

Uber Freight moves into SaaS territory - Journal of Commerce

  • Truckload broker Uber Freight released two transportation management products aimed at large shippers that moves the company into the realm of a SaaS provider.
  • The first product, Uber Freight Enterprise, is “an extension of our self-serve shipper platform for [small and medium-sized businesses],” the company said in a statement. The tool allows large-volume shippers to source capacity through Uber Freight’s freight rate marketplace, while also getting visibility into truck ETAs and digital access to load documentation.

  • The second product, Uber Freight Link, allows large-volume shippers to use the Enterprise product to manage and execute loads outside the Uber Freight capacity network. This would represent a true move into SaaS in that it would allow shippers to essentially use Uber Freight’s software as their platform to manage all truckload freight.

Beer, Band-Aids And Ben & Jerry’s: Why Venture Capitalists Gave Two 27-Year-Olds $1 Billion To Build The Ultimate Online Convenience Store - Forbes

  • With its flat $2 fee for 30-minute deliveries of junk food and booze, GoPuff is having a very good pandemic. Orders are up four-fold at the SoftBank-backed startup but hypergrowth comes with problems: high costs, low margins and unreliable drivers.

  • But GoPuff has hardly been idled by the pandemic. The real action is unfolding at more than 200 miniature fulfillment centers across the country —half of which were set up in the past year—where some 3,500 employees work around-the-clock shifts, jostling past one another to grab, pack and send out the overpriced impulse buys that customers in 500 cities are punching into their iPhones.

  • Founded in 2013 as a late-night service for college students to order junk food, GoPuff has gone mainstream, and now offers 3,000 items ranging from over-the-counter medicine and laundry detergent to pet food and nail polish—all delivered in around 30 minutes for a flat $2 fee.

  • Its warehouses, set up in rented spaces of 10,000 to 15,000 square feet, are the key to how it competes in the crowded, cutthroat delivery business. Unlike other middlemen like Instacart and Uber Eats, GoPuff acts more like a retailer, buying directly from giants like Anheuser-Busch, PepsiCo and Unilever. It generates revenue not so much from the nominal delivery fee, but from slapping a hefty markup on the stuff and, increasingly, selling better placement on its app.

  • Business has been booming since the pandemic hit. Sales reached an estimated $250 million in 2019, and orders are up 400% this year, but it is not profitable and admits it’s still not making money on a fourth of its centers.

  • I must admit, I personally love the App, I find it to be super convenient (and convenience you surely pay for!) and is one of the fastest delivery experiences I’ve come across, with delivery times often < 20 minutes.  Note: Download the app here and you’ll get free credit. 

 

Walmart's Fulfillment Service For Sellers Not Seeing Adoption - Marketplace Pulse

  • Walmart Fulfillment Services (WFS) that allows third-party sellers to store and fulfill inventory from Walmart’s warehouse is powering less than 0.1% of the two-day enabled products. Only 150 sellers out of the 54,000 total have started using the service launched six months ago.

  • WFS powers less than 5,000 of the four million products with two-day shipping on Walmart. Over the past twelve months, Walmart has nearly doubled the number of products with two-day shipping, from 2.1 million in August 2019. However, most of that increase came from the company enabling two-day shipping for its first-party selection.

  • WFS operates out of a single warehouse in Shepherdsville, Kentucky. One of the stated goals of WFS was combining Walmart’s retail selection with the marketplace in the same box, but it has many more warehouses across the country storing its first-party items. Thus most shopping carts with first-party and third-party items still come in separate boxes.

  • The service has no public pricing, but the company called it “one of the lowest on the market” when they announced the service on February 25th.

Stores Were Behind Q2 E-Commerce Growth - Marketplace Pulse

  • U.S. ecommerce grew 44.5% in the second quarter, the fastest growth in over two decades. While online platforms like Shopify and Etsy posted record-breaking numbers, big-box retailers ready for curbside pickup and delivery grew the fastest.

  • Major retailers like Best Buy, Target, Dicks Sporting Goods, Lowe’s, Home Depot, and Walmart outpaced the overall e-commerce market because they were deemed essential retailers and thus have remained open.

  • “Stores enabled more than three-quarters of Target’s digital sales,” said Brian Cornell, CEO at Target, discussing Q2 results. The company added that “More than 90% of our Q2 sales growth involved our stores, whether a guest’s order was purchased at the register, put in their car or shipped from a store.”

  • At Best Buy, Matt Bilunas, CFO, said, “Buy online and pick up in-store, or curbside, was 41% of online sales.” And Corie Barry, CEO at Best Buy, added that “Even when stores open for customer shopping, online sales growth continued to be extremely strong.” As a percentage of total sales, e-commerce share increased to 53.1% versus 16.1% in the same quarter last year.
        

Shippers turn to regional carriers to handle increased volume - Supply Chain Dive

  • Shippers are using regional carriers to handle increased volume as FedEx, UPS and USPS have experienced constrained capacity due to large upticks in volume, according to logistics experts and Convey data.

  • An average of 17% of retail volume went to regional carriers in the first seven months of the year, compared to 3.8% in 2019 and 6.2% in 2018, Convey's numbers show. This has become increasingly common throughout the year, with 24% of volume traveling with regional carriers in July.
      

How eCommerce Brands Are Preparing for Black Friday 2020 - Yotpo

  • Say hello to Cyber November and early holiday shopping. Black Friday has slowly been morphing into a multi-day affair, helpfully prodded by Amazon’s month-long online sales. This year though should firmly put an end to the chaotic optics of in-store shopping mania.

  • Not only are major retailers closing their physical doors on Thanksgiving, but many have announced earlier promotions this year. Target will be “stretching out the savings” to make shopping safer and more convenient, while Macy’s is starting deals right after Halloween. We expect many retailers to follow suit, especially as Amazon has pushed its Prime Day event to October.

  • According to a Salesforce prediction, holiday demand will be pulled earlier in the shopping season, not only due to the halo effect from Prime Day deals, but also because of consumers’ concerns about personal safety, delivery delays, and product availability. We expect retailers and brands to push holiday promotions and deals more heavily during this time to leverage the buzz and excitement.

  • “Our research showed that 51% of retailers and brands did a promotion during Prime Day last July,” says Rob Garf, VP of Strategy and Insights at Salesforce. “We anticipate that 10% of holiday sales will be pulled into October this season due to the manufactured shopping event. Marketers should not sit on the sideline during Prime Day this year”

  • It’s unsurprising to learn that mobile usage has increased considerably during the pandemic. According to a Yotpo consumer survey, time spent on mobile phones increased by 30%, and approximately 72% of online consumers are using mobile devices to shop. This will continue into the Black Friday season, making it more relevant than ever for brands to consider mobile-first experiences when building campaigns.

  • In Shopify’s May financial report, the eCommerce platform highlighted the rise of BOPIS: Buy online, pickup in store. Only 2% of Shopify merchants were using this feature before the pandemic, but within a matter of weeks that number grew to a staggering 26%.

  • Click and collect is an essential offering for brands with a physical presence, especially during Black Friday. Macy’s announced that curbside pickup would be “huge for this holiday season,” while a variety of smaller retailers are dabbling with “parking lot popups.” Any brand with a physical location should consider offering curbside pickup this Black Friday to make shoppers feel comfortable, while still giving them the option of immediate access to goods.

He delivers where Amazon and FedEx won't: USPS worker covers 'the last mile' to rural America - USA Today

  • For 30 years, Michael Miller has delivered mail on the same rural route in southern Ohio’s Gallia County. It’s 51 miles of country roads, gravel driveways and one-lane cow paths. It’s hot in the summer and cold in the winter, and it’s always loud as he rumbles around in his mail truck, a hand-me-down from a retired city fleet that he got five years ago.

  • Restructuring and other possible changes at the Postal Service, however, could severely affect rural carriers such as Miller and the millions of rural residents they serve. For one, Miller said, elderly customers are still dependent on the Postal Service. More than 1 in 5 older Americans live in rural areas, according to the Census Bureau.

  • Rural carriers shoulder deliveries for USPS competitors such as FedEx, UPS and Amazon. Every morning at the post office, Miller sorts through the five pallets Amazon delivers from Kentucky. A few more pallets will show up from FedEx and UPS throughout the week.

  • Because most major delivery companies won’t deliver to rural areas, postal workers carry their packages for what they call “the last mile.” The lack of reliable broadband internet in parts of Gallia County only add to the importance of mail service. “They’re more reluctant to go online. They’re still writing a check for their electricity,” he said. “If we went away, we’d have to be 100% dependent on the internet. ... That’s just not a commodity we have.”

  • Some days, Miller delivers as many as 30 packages of lifesaving medication, everything from blood pressure pills to cholesterol medicine. If mail delivery is reduced, Miller fears what might happen to one of his customers should a prescription runs out.

  • There is a certain irony in delivering parcels to his customers who display “Trump 2020” signs in their yards, that those who might need consistent mail delivery the most support a president who wants to change it. But Miller said it never sways him. “I’ll deliver to every mailbox regardless of who they’re for,” Miller said. “Every mile, every day.”

Finally, I would like to end with three articles not directly in the vein of ecommerce x logistics, but material I found to be thought provoking nonetheless:

  • Welcome to Your Bland New World - Bloomberg

    • Why do disruptive startups slavishly follow an identikit formula of business model, look and feel, and tone of voice? Because it works, sort of.

  • The DTC Party’s Over. What Happens Next? - BuiltIn

    • The grow-at-all-costs playbook led to a direct-to-consumer reckoning. Now, some brands are trying things differently.

  • The butcher's shop that lasted 300 years (give or take) - The Guardian [**outstanding long form read**]

    • Frank Fisher, now 90, was a traditional high street butcher his whole working life – as were three generations of his family before him. How does a man dedicated to serving his community decide when it’s time to hang up his white coat?

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© 2020 Second Marathon Consulting, LLC
Matthew Hertz is the founder of Second Marathon.
www.secondmarathon.com

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