Issue #6: Target’s Up and Down Week

Trend of the Week: Target Updates Tech Stack

Target, the Minneapolis-based retailer with just about 2,000 stores, made two announcements this week about updates to their tech stack. Like many updates in retail, there are positives and negatives, which are always fun to dive into!

1) Target launched Store Companion, an AI-powered chat bot for store employees to search questions about how to do things, which will be available on their handheld devices. At a high level, it seems that Target uploaded their employee FAQs, handbook, and other training materials to some LLM and made it searchable. Despite the simplicity of this move, having worked in retail and built out the training materials, I can see how this could be very helpful for all involved. Right now, it is undergoing the pilot phase and I am excited to follow along. My verdict: Good!

2) The second update to their tech stack Target announced was a partnership with ecommerce website builder platform, Shopify. Most brands use Shopify to build their site and sell products. Shopify recently launched Marketplace Connect, a feature to help their merchants get more sales on other platforms like Amazon, Walmart, and Weee! directly through Shopify (deep dive thread here). Now, you can connect with Target as well through Marketplace Connect. The upside of this feature is for a relatively low lift you can be featured on large marketplaces with huge traffic for minimal extra work and the orders flow right back into your Shopify store. The downside is that you are competing with yourself for clicks and purchases, while giving the large marketplace a boost to SEO. A tradeoff each brand needs to decide for themselves. Regardless, this feature has been available since February with several large marketplaces, so trotting it out now is not some big achievement, but something that needed to be done. My verdict: Good, but late.

News of the Week:

Positive:

1. Pear Commerce Raises a $10M Series A - Pear Commerce, a tool that connects CPGs and Retailers to drive purchases, announced they raised $10M from Stage 2 Capital, Great North Ventures, and Mairs & Power Venture Capital. The main product Pear Commerce offers is showing customers is where they can buy the product locally and enable you to buy it from that retailer online. Some of their clients include 818 Tequila, Liquid Death, and Santa Cruz Organic. Pear targets CPG-focused brands, not D2C brands, and enables them to have tools/data that typically only D2C brands would have. This fundraise will allow them to build out more features on the ad side, including a full shopper journey. In an omnichannel world, this product is super exciting and brings data to areas that lack it.

2. CloudKitchens Launches Picnic - CloudKitchens, the ghost kitchen founded by Uber founder Travis Kalanick, launched a digital food court Picnic that is more consumer-facing (and coincidentally? looks a lot like Seamless/Grubhub). Like many ghost kitchens, they have realized that driving orders can be helpful, but one exciting part about what they are doing is focusing on offices and other areas where people bulk order food to be delivered. Like many others before, like Zuul, they focus on delivering to offices and have added a focus on apartment buildings and schools too. In theory, this focus enables batch delivery, which lowers delivery costs and improves the economics. For now, they offer no fees, tips, or subscription charges. In launching this product, CloudKitchens continues to foray into driving orders themselves, and will be interesting to monitor if they are able to maintain the economics needed to sustain these prices.

Negative:

1. Instant Commerce Restructuring. Again. - Getir, one of the last remaining instant 15 minute delivery apps, announced a restructuring and an investment of $250 million. As part of this move, the business will be split into two parts. The first part, led by the head of Getir’s Turkey operations, which is their main hub for instant commerce, will be the main instant commerce app. In the second part, Getir is spinning out their non-core businesses, like a ride hailing app, jobs board, shopping platform, and Freshdirect. The second part will be let by their co-founder and CEO. Cost cutting was needed and hopefully this change will help make the business more profitable. However, at its core, these low AOV, high cost orders just are not profitable, which means this type of instant commerce may never be possible.

2. Walgreens Announces Store Closures - Walgreens, the pharmacy and convenience store, announced this week a shift back to its core business, pharmacy. They had tried to enter primary healthcare by acquiring a majority stake in VillageMD, a primary care provider, and this hurt financially, so a reduction in ownership of VillageMD is undergoing. Additionally, many of the stores, up to 2,200 stores, may end up closing for underperforming financially in the next couple of years. As the convenience and pharmacy market continues to get more competitive, Walgreens has struggled to find footing and stand out. This could be tough for many shopping centers, where Walgreens is a core tenant and traffic driver. Hopefully, the focus on the core business will allow these places to improve and closures will be minimal.

Startup Feature: Hummingbirds

• Summary: Marketplace for businesses to connect with local influencers to create content about their business

• Founder(s): Emily Steele, Charise Flynn

• Amount raised & investors: $4.4M from Next Level Ventures, Innoventures Iowa, FJ Labs, M25, Ground Game Ventures, Allos Ventures, ISA Ventures, and Mango Seed Investments

• How this will shape the future of retail: Customer acquisition is one of the hardest parts of any business and as companies focus on user-generated content as the next marketing gold mine, specialization will be key to connecting with the right influencers

• My take: Retail is typically a very local business and using local influencers to promote a local business is a no-brainer

Job Opportunities:

Cava | Remote - People + Culture Manager

Nok Recommerce (return management) | Remote - Revenue Operations Lead

Sweetgreen | Atlanta, GA - District Manager

Link of the week: Attention spans and how marketing is evolving to placements on physical things in the world like coffee cups and pizza boxes (read more here)

Additional Links:

1. Target launches a retail shopping ad network for companies to market to their consumers (read more here)

2. A peak into some of the red tape behind retail and parking spots associated with it (read more here)

3. CPG Ice Cream and Coffee hit with recalls due to copacker issues (read more here)

4. Taim, a NYC fast casual Mediterranean restaurant chain, was acquired by Craveworthy Brands (read more here)

5. Local Kitchens raises $40M to fuel expansion of restaurants with multiple local brands in them (read more here)

6. Little Sesame x Tacombi x Vista Hermosa Hummus (look here)

7. Russ & Daughters x Morganstersn Ice Cream Truck Classics (look here)

8. Immi, featured in Issue #5, launches nationwide at Whole Foods (read more here)

9. Chia Smash also launches in all whole foods (read more here)

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