Issue #17: The Retail IPO You Haven’t Heard Of

As you travel around Malaysia, it is hard to miss the plethora of sundry shops, which are delis/convenience stores that sell mostly Chinese goods. One of the most common sundry shops you will find is also the largest mini market retail chain in Malaysia, 99 Speedmart. Currently, the chain has over 2,500 stores, selling everything from bulk goods to pet food to laundry detergent. Given its success, it was only a matter of time before an IPO was on the horizon. Monday morning, that was the case as 99 Speedmart was listen on the Malaysian stock exchange. They raised $542.8 million in the biggest Malaysian domestic listing in seven years. The stock price jumped as much as 16.4% throughout the day. Overall, it was a smashing success.

The plan is to use these funds to further expand and build out the eCommerce offering. The company has lofty goals of 3,000 stores by 2027, which will require 250 stores a year to do that. Why is 99 Speedmart successful? Because they balance a variety of customer needs from which a lot of brands could learn. Affordable prices, bulk options, diverse product selection, quality products, eCommerce, and a customer-focused approach. Unlike many US stores that either focus on eCommerce (Gopuff, Gorillas, etc.) or walk-in retail (7-Eleven, Circle K, Caseys), 99 Speedmart does both. The lesson here, maybe it makes sense to spread the resources and do both retail and eCommerce.

Patagonia Provisions (A CPG Brand)

This week, I came across a tweet highlighting Patagonia, the outdoor retailer, and their CPG line. Plus, they announced some new ready to eat bowls. The tweet mentioned highlighted their pasta CPG at a Whole Foods location. It is very interesting that Patagonia is in CPG, but it shows you that once you build a core brand, it can be extended to other industries with the same core values. If you ask most people what describes Patagonia, two prases that would repeat from respondents are eco-friendly and high quality. Despite being a CPG product, these still apply. Here is how:

• Eco-Friendly - no plastic window on the pasta, recyclable cardboard, and regenerative organic wheat

• High Quality - two ingredients sourced from single-origin farms, nutty flavor, and bronze die-cut noodles

In addition to pasta, Patagonia also produces crackers and tinned fish with the same standards. The last detail that makes these products a perfect fit, these types of foods are frequently consumed during outdoor activities. Plus, these are non-perishable food, that outdoor retailers, like REI, sell. Genius move to be able to win shelf space at the Whole Foods of the world AND the REIs of the world with the same product. A big lesson for existing brands with core values, there are always new products to launch in other categories. What is the next product you want Patagonia to launch?

Starbucks Tries To Win Back Customers With Open Letter

As covered in Issue #13, Starbucks poached Chipotle’s CEO, Brian Niccol, to be their new CEO amid slumping stock prices. This week Niccol penned an open letter to try to win back the public and provide a peek behind the curtain of his plans. He acknowledged Starbucks has drifted from its core values and needs to return. Some of the things he wants to do is further empower baristas and make Starbucks more community-oriented. He plans to invest in technology, improve the supply chain, and tweak the mobile order process. There was no mention of value, which is interesting given that is the lane its competitors seem to be focusing on attacking Starbucks for high prices.

How that will manifest? It is not exactly clear. While this open letter is not exactly a tactical plan, I was a little underwhelmed with the lack of emphasis on community, as that seems to be the key differentiator. Starbucks customer-facing tech is already fairly strong. There are ways to improve the back-end ops, which they are already doing with the new drink production Siren System, but that doesn’t exactly feel like it will be the silver bullet, nor would additional tech investment. In startups, there is the concept of bits vs atoms, where bits are startups focused on digital and atoms are focused on physical parts. In this case, it feels like a bits improvement is need not atoms where the in-store experience is prioritized.

How To Get Customers Back: Refreshed Menu

For many businesses with an assortment, but in particularly fast casual retail restaurants, the product mix can remain stale. While people have their favorites and enjoy consuming them, eventually you can only eat the same thing so many times. That is why refreshing you menu and product mix is key. This week, I saw a couple headline grabbing examples and wanted to share.

• Shake Shack - After extensive testing and previous roll outs, Shake Shack is bringing back the Black Truffle Menu featuring a burger, veggie burger, beer, and fries - all with Black Truffle. It is not clear how long these items will be available, but using the app you can get access three days earlier (great inducement to use the app).

• Moe’s Southwest Grill - Taco Bell’s loss is Moe’s gain. With the Big Cheez-It no longer available at Taco Bell, there was an opening for a feature at a fast food Mexican restaurant. Moe’s stepped in and now you can get Cheez-Its as a topping for your food. This is the second headline-inducing new topping after Moe’s added Mike’s Hot Honey earlier this summer.

While these examples are purely restaurant-focused, this applies to all stores, physical and digital, food and not food. There is always room to bring out new products that fit your brand ethos. Finding the right cadence is tricky, but something all brands should be doing.

• Summary: Personalized direct mail marketing automatically integrated into Shopify, Klaviyo, etc. that can seamlessly fit into your marketing flow with a physical encouragement to place an order

• Founder(s): Drew Sanocki and Michael Epstein

• Amount raised & investors: Summit Partners and Angel Investors

• How this will shape the future of commerce: Direct mail may be part of the past of commerce, but it is also part of the future. It gives you a personalized way to stand out from the competition.

• Why should you use this technology?: It is a lot easier to ignore a social media advertisement than a physical piece of mail, no matter how much junk mail you get.

• Notable Clients: Toty, Hexclad, Gozney, Dr. Squatch, and more!

• Pricing: $419 per month plus at least $0.50 per postcard (varies by size)

• My take: You need multiple touch points to reach customers and physical mail is a great way to stand out

• Interested? Book a demo here

Additional Links:

1. A new bakery is opening in Austin and its tagline is “Caffeine, Gluten, Sugar, Butter, Booze” (read more here)

   • My take: Just as “better for you” products are having a rise, I also think “bad for you” will have a rise, albeit still with clean (high calorie) ingredients (like cookies using lots of natural butter but avoiding red dye 35000)

2. A deep dive of shop/athleisure company Allbird’s financials and what went wrong (read more here)

3. CVS is piloting opening the locked cabinets with an app at their 86th & Amsterdam location (see more here)

4. Blank Street does a Matcha focused pop-up in London’s Clapham Common (read more here)

5. Graza and their packaging (read more here)

   • My take: Just check out Issue #15 for my deep dive into innovative packaging

6. Deep dive into how snacks are on the rise in the US (read more here)

7. Radius, a butcher and grocer in Austin, has released an update on their progress (read more here)

8. Chuck E. Cheese parent, CEC Entertainment, opens a new arcade in Trumbull, CT, Fun Spot Arcade (read more here)

9. Shopify launched a partnership with Roblox to sell physical items through a Shopify storefront in the game (read more here)

10. Liquid Death may be a non-alcoholic beverage, but it is marketed like a beer company (here is how it compares to a beer company)

11. Emerging CPG brands adapt for large retailers (see more here)

12. Fly By Jing launched NYC retail popup

    • My take: Can’t wait to go!

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