December 12th, 2022: Dollar General Grows, Walgreens’ Same Day, Etsy’s Holiday Sales, and Shopify Refreshes its App Store
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It’s December 12, 2022 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Dollar General Adds Over 1,000 Stores and Fresh Items
Walgreens Launches Same Day Delivery
Etsy Sellers Report Inflation and Higher Fees are Hurting Their Holiday Sales
Shopify Refreshes the Design of Its App Store
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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BUT FIRST in our shopping cart full of news….
Dollar General Adds Over 1,000 Stores and Fresh Items
"Make hay while the sun shines" is not only a proverb of life but of business. Roughly it means taking advantage of a particular situation while it exists because it may not be around forever.
Through this lens, I analyze an Axios article where Dollar General will add 1,050 stores to its 19,000-store fleet.
Making hay while the sun shines sounds great, in theory. The challenge is simple, though -- once you build a store, it's more or less built "forever." And that includes while the sun is shining, when it's raining or snowing, and at night when the sun is hidden.
From my thinking, Dollar General takes advantage of two huge trends: one short-term and one long-term.
The short-term trend is inflation and the upcoming slowing of the economy, encouraging shoppers to "trade down" and shop more at the discounter. Even if you don't think we are in a recession right now and "everything is fine," it doesn't mean that category mix hasn’t also shifted.
The second trend benefiting Dollar General is the much longer-term trend in the United States: the middle and lower classes are losing economic clout compared to the top 1% since the 80s. This tends to give a value chain like Dollar General a tailwind.
Dollar General is also doing another smart thing -- adding fresh groceries. Fresh and replenishable items encourage repeat visits, which can lift the entire store's sales over the long term. It also means that Dollar General could be attempting a broad low-end disruption of Wal-Mart. Something that I'm sure is not lost on Wal-Mart itself.
The big challenge is -- how much hay should one make while the sun is shining? Is 1,000 stores too much?
In this case, the management team seems to realize understand that more stores is not enough, and is hoping fresh grocery will be a hook to bring consumers back as it expands.
[References:]
Our Second Story
Walgreens Launches Same day delivery
Walgreens is extending its Same Day Delivery offering to fulfill orders 24-hours a day, seven days a week in markets across the country.
I don’t know how you can interpret this news as anything but bad for companies like Instacart and Doordash who count the pharmacy chains as some of their biggest customers. The assortment is interesting as 27,000 items are part of it which is pretty broad.
The service is already available in New York City and I found it that it had a $5.99 delivery fee but free above $35. I’m not sure how this is a profitable endeavor for them, but at least they aren’t trying to deliver these items in 10 minutes so likely they are going to batch up routes to make it more efficient and make it up on volume!
What could possibly go wrong? Either way as a consumer this sounds like a good idea to me.
Have you walked into a Walgreens lately? It’s like a criminal hellscape where all items are behind lock and key and there are incredibly long lines at the pharmacy counter. No wonder they need a service like this to keep people out of the store. It’s probably safer on the New York City subway than it is in a Walgreens these days.
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Our Third Story
Etsy Sellers Report Inflation and Higher Fees are Hurting Their Holiday Sales
An article in Modern Retail is reporting that some sellers are experiencing slower sales as a result of rising prices to accommodate a 30 percent fee increase earlier this year. While Etsy’s Black Friday promotions were considered a success, many sellers are saying it was only due to heavy discounting.
Well, sellers, that is the state of things right now and you better get used to it, particularly in discretionary categories.
Personally, I tend not to put too much stock in sellers complaining. Etsy, like Amazon, has millions of sellers and if you wanted to write a story every day of the week about a seller complaining about a marketplace rule change, you could.
New listeners may now know that early in my career I spent 10 years at software company ChannelAdvisor which helps eBay and Amazon sellers back in the early days of the Internet and I don’t care what eBay or Amazon did, every change was met with a huge wave of complaints.
History shows that these complaints don’t amount to anything as long as the platform is still delivering sales at a rapid clip. So, while you may used to be hearing seller complaints about Amazon, this news actually caps a year of significant seller complaints about Etsy, including a mini-boycott over the previously mentioned fee increases.
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And Our Last Story
Shopify Refreshes the Design of Its App Store
Shopify just did a major refresh of the design and features of its popular App Store, which is home to over 7,000 third-party apps which work with the platform. The design is simpler, making it easier for merchants to compare apps, and also personalized -- recommending apps depending on the merchant's current situation.
My take is that it's a good move for Shopify to double-down on the current strength of their App Store and help merchants more easily find high quality apps and help app developers find customers more efficiently. It's really a win-win for both sides
I reviewed the changes, and here's what I came up with. Harley Finkelstein and others in the ecosystem also tweeted about it.
* First, it’s clear they focused on SEO in this release. Lots of contextual links, cross-linking, speed improvements, and moving information above the fold.
* On the home page, app-focused case studies are now more prominent and the company says that the homepage will be personalized as I mentioned earlier.
* On the category page, there is more “how-to” content for beginners surfaced from their blog, as well as other promotional areas pushing you into upsells of Shopify offerings like Fulfllment. Which is what you would expect. Shopify is going to use its own app engine to help itself, too.
* The App Detail page changed the most as the entire experience now looks tighter and more refined. Pricing is now more prominent right below the name of the app, and video and imagery is above the fold.
* There are also these new badges that apps can earn related to speed, support for Shopify’s latest features, and merchant popularity.
If you’re an app developer, I encourage you to login to your partner portal soon so you can take advantage of the new features and layout.
* Finally, there is more obvious and standard privacy policy placement, as well as a clear place to access Support for any app. Even this small change is appreciated.
In other news, I noted at the bottom of the App Store was the standard Shopify trial signup, and must have missed the news that Shopify moved from a 14-day trial to a 3-day trial and then added 3 months for 3 dollars?
Whew, that’s a lot of threes.
Seriously people, I’ve never seen a 3 day trial in my entire life. Why have a free trial at all if it’s going to be 3 days?
I get the sense that is one signal that Shopify is moving ever so slightly up-market in a way that they hope will significantly reduce the amount of churn in the platform so that Wall Street analysts and hooligans like myself will stop bugging them about the high churn rates on the platform.
[References:]
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It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
Mars Petcare is acquiring Champion Petfoods for $2 Billion
Mars is already a huge player in the pet market and through this acquisition they are getting access to the Acana and Orijen brands. Mars is an extremely sophisticated digital operator not only through retail, but also digital direct to consumer channels and Amazon. This is the second major acquisition in the pet arena this year for Mars with its acquisition of fresh petfood brand Nom Nom earlier this year.
Link: https://www.petfoodindustry.com/articles/11722-mars-petcare-acquiring-champion-petfoods
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Second
Proper Good a Shelf-Stable Meal Solutions Company Raises $3M in Seed Funding
This team appeared on Shark Tank in 2020 and have grown significantly. The concept is simple. A shelf-stable complete meal that only needs 90 seconds in a microwave. It sounds scary and unbelievable at the same time, almost like an Army MRE but for regular people.
I love this idea already and suddenly getting hungry.
Third
Primus Ventures puts $100M in Subscription Software Brand Ordergroove
The interesting thing about OrderGroove is they are trying to sit above the typical low-end subscription provider. I actually have known about OrderGroove for many years since they actually started in the Software as a Service market, and not even in the D2C space.
Now the company has big customers like Honest Brand and Peet’s Coffee.
Fourth
Dick’s Sporting Goods creates a New Venture fund for Sports Startups
This is an interesting one and a continuation of a trend where a major retailer is creating a venture fund in their niche to gain exposure to innovative ideas. The fund is called DSG Ventures and has already made 5 investments including one called SidelineSwap which is a resale sporting goods marketplace concept for athletes.
https://www.dickssportinggoods.com/s/dsgventures
AND FINALLY …
Skincare brand Topicals raises $10M in Series A financing
The brand is designed to help you prevent flare-ups on your skin and has some big-name investors including Jay-Z’s venture fund. The company plans to use the money to expand across many more channels.
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That’s all for this week! Till next time Watsonians.....
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Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest. Want to discuss the topics on the show? Head on over to community.rmwcommerce.com to connect with other listeners!
Our production partner for the series is CitizenRacecar. The show is produced by Alex Brouwer; Production Manager, Gabriela Montequin.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
