Read on Twitter
1/ Been thinking about online versus offline grocery and the 'paradox of choice'. The typical grocer has ~40k SKUs. The arbitrage is in how shoppers undervalue their time. Last-mile logistics and pick/pack are all done by customers. Despite this, grocers operate at a 2-3% margin
2/ To me, this means there is not a lot of margin to work with. Online commerce has resulted in the 'endless shelf' but in dealing with perishables/expensive cold-chain and widely disparate inventory, less is probably more.
3/ If grocery moves online, the ultimate winner will need a materially differentiated approach to infrastructure. Higher fixed costs will likely need to spread across a more predictable shopping event (higher AOV/more subscription) and a lower labor cost model (read: automation)
4/ Does this mean that the 'search cost' benefits of legacy-CPG brands (that have been recently impacted by the competitive impact of the long-tail of brands) are better positioned for an online world? https://twitter.com/LennyIce/status/1272669744819290112?s=20
6/ Micro FCs seem like the end-state in major urban areas. With an abundance of real estate now available, do we see a window of opportunity for a Miss Fresh type model in the U.S.?
MissFresh stores do 3-4x the SqFt productivity of a conventional retail footprint
MissFresh stores do 3-4x the SqFt productivity of a conventional retail footprint
