My choices would start with Target, trying to “BEEF” up their grocery offerings to the younger consumers that are loyal to their Box stores.
Second would be Amazon who can offer the last mile through door step deliveries and carve off a bigger piece of the food delivery business by combining with Whole Foods delivery.
Janette, I don't think they'll be viable in 5 years, much less 10. The CX and logistics costs are going to tie up a lot of capital and for a bootstrapped company that's going to be tough to capture. My guess is that their partnerships become more and more difficult to manage with greater demands for market share. Brick and mortar is putting a lot of pressure on D2C right now as shoppers are moving to traditional outlets post Covid. We've put a lot of time and money into this discussion and we are having a hard time justifying that channel.
But to answer your question, Amazon is really the only viable operator that could make it work since they can deliver that last mile and have a robust capacity for this product with the chain solutions.
Totally agree. 2 years ago our little D2C was thriving. Like amazingly so. In the last few months we (and other, bigger operators around us) have seen a down trend. Several that were shipping have gotten out entirely because shipping costs became untenable.
We’re also seeing a down tick on locker appointments, indicating fewer D2C players as well.
Does WMT’s decision to sell Moosejaw and Bonobos indicate a change of strategy that would make it less likely that o go down a road like this? Or is there something about the food space that makes it a different avenue than khakis?
i like this question. But I would say meat is different in that its a repeat type purchase and, the reason Walmart is investing in upgrading their meat case, is because meat purchases drive the rest of the food 'basket'. Also, as evidenced by continued investment in Prime Pursuits (the aligned supply chain they built with 44 Farms), Walmart is continuing to invest in upgrading the meat case so this could be complementary. If however that changed, then i'd completely agree that there was a strategy mismatch.
My choices would start with Target, trying to “BEEF” up their grocery offerings to the younger consumers that are loyal to their Box stores.
Second would be Amazon who can offer the last mile through door step deliveries and carve off a bigger piece of the food delivery business by combining with Whole Foods delivery.
Great article this week!
I'm not a chat bot
Target - VERY interesting idea
Janette, please don't overlook a potential exit to a P/E fund for free cashflow. It doesn't need to be strategic buyer from the sector.
Of course. The reason I said let’s ignore PE is because it was not interesting for the purposes of a strategic thought exercise.
Janette, I don't think they'll be viable in 5 years, much less 10. The CX and logistics costs are going to tie up a lot of capital and for a bootstrapped company that's going to be tough to capture. My guess is that their partnerships become more and more difficult to manage with greater demands for market share. Brick and mortar is putting a lot of pressure on D2C right now as shoppers are moving to traditional outlets post Covid. We've put a lot of time and money into this discussion and we are having a hard time justifying that channel.
But to answer your question, Amazon is really the only viable operator that could make it work since they can deliver that last mile and have a robust capacity for this product with the chain solutions.
Totally agree. 2 years ago our little D2C was thriving. Like amazingly so. In the last few months we (and other, bigger operators around us) have seen a down trend. Several that were shipping have gotten out entirely because shipping costs became untenable.
We’re also seeing a down tick on locker appointments, indicating fewer D2C players as well.
You may be right, we’ll see!
Does WMT’s decision to sell Moosejaw and Bonobos indicate a change of strategy that would make it less likely that o go down a road like this? Or is there something about the food space that makes it a different avenue than khakis?
i like this question. But I would say meat is different in that its a repeat type purchase and, the reason Walmart is investing in upgrading their meat case, is because meat purchases drive the rest of the food 'basket'. Also, as evidenced by continued investment in Prime Pursuits (the aligned supply chain they built with 44 Farms), Walmart is continuing to invest in upgrading the meat case so this could be complementary. If however that changed, then i'd completely agree that there was a strategy mismatch.