Let’s Talk

Thank you, you're submission has been received.

There was a problem submitting your request.

What are your primary business content and marketing goals?

Tell us more

Let’s Collaborate

Getting Into Shipt Shape: How Shipt More Than Doubled Its Workforce in a Matter of Months and The Impact it Has In On-Demand Grocery Delivery

Play episode
Subscribe to get Up Next in Commerce episodes and our weekly newsletter straight to your inbox.

Or listen in your favorite podcast app

Apple Podcasts  /  Google Podcasts Spotify

At this point, it’s old hat to say that 2020 was a pretty wild year — countless industry experts have waxed poetic about the long-term implications of the acceleration of ecommerce we’ve seen this year.  But Joe Manning hasn’t just been talking about adapting in the face of change, he’s working to make it happen.

Joe is the Chief Business Officer at Shipt, an on-demand delivery service that connects customers with thousands of grocery items and retail shops like Target, Best Buy, CVS, and national and local grocery stores — and they do it all through a single mobile app. This year Joe has been on the front lines of scaling Shipt while still delivering not only physical products, but exceptional experiences to Shipt customers, employees, and partners. 

Earlier this year, Shipt doubled the size of its shopper network to meet the growing demand for grocery delivery. And now, as the holiday season is in full swing, the company has added 100,000 more shoppers to its network. Not every company will have to scale quite that quickly or extensively, but ecommerce companies that will thrive moving forward will be the ones that are ready to jump into new markets, pivot quickly, and reach beyond their comfort zone.

On this episode of Up Next in Commerce, Joe explains what it takes to do just that, including how to maintain a culture of happy workers and customers as your company grows and changes. Plus, he looks at what is ahead this holiday season and why last-mile delivery is an area ripe for innovation.

Main Takeaways:

  • Super Market Sweep – When entering new markets, researching the dynamics of where you are expanding is a critical step. No two markets are the same, and each new market will require investments in different areas. Taking the time to get to know who your customers might be and what their needs are will provide you with a better idea of where you should invest your resources.
  • Happy Employee, Happy Customer – Even if you are employing mostly gig workers, helping to build a good culture and work environment should still be at the core of your business strategy. When workers feel supported and connected, they in turn will deliver better customer experiences, which impacts the bottom line.
  • Choose Your Own Adventure – The future of ecommerce is all about providing choice, personalization, and bringing the best of the in-store experience online. Companies that learn how to capitalize on the unique needs of every customer through gathering data, implementing technology and deploying resources — whether it’s last-mile delivery, seamless returns, or personalized shopping suggestions —  will lead the industry.
  • Tech Talk – There will be more tech brought into the ecommerce experience, especially as it relates to grocery shopping. From barcode scanning, to robot shoppers, to maps to help customers navigate the aisles in-store, there is a lot coming down the pike.

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

“During the holidays, every retailer is trying to put together the pieces to support their customers and enable them to get the products they want in a way that works for the customer.”

“New markets they’re exciting, but they can be challenging. And one of the great things is the market dynamics differ. Launching in a New York City is different than Savannah, Georgia, for instance. When we go into markets, we’ll spend time there to really understand the market dynamics so that we’re thoughtful about our investments. Not only in how to recruit the shoppers to succeed in that market, but how to tailor our messaging so that it resonates with potential customers and that we’re knowledgeable about the markets.” 

“The shoppers build such an amazing community amongst themselves. And it’s great because they share best practices. They share tips. They’re great resources for new shoppers who again maybe are a little bit hesitant or uncertain about how to operate. And then they celebrate with each other….  they recognize that the stronger the community they build, the better the customer experiences are going to be, which is going to drive more volume, which is going to be supportive for everybody. And it’s really exciting to watch. And we do think it’s something unique that we’ve helped create as what we’ve seen with other gig economy companies. They don’t put the same effort into supporting their shoppers or their gig economy workers.”  

“I think too often, some of the technology companies look at the gig economy worker as a cost. And we look at it the other way. We celebrate them, they’re a phenomenal brand representation, and they represent our brand, and they represent the retailers with whom we work. And so, the more they feel good about what they’re doing, the more we can help support them to do a great job.”

“Retailers are building out a broad ecosystem of ecommerce solutions for their customers. They’re recognizing that customers are going to want to interact with them and their products in different ways. And they want to let the customer choose how they want to get the products. And whether that’s a third-party marketplace like Shipt, or if they want to do pickup, or having the retailers enable last-mile delivery through their own ecommerce programs, that, to us, feels like the winning strategy. The retailers that are creating multiple options in allowing the customer to choose, those are the ones that appear to be gaining a share and taking more of the business in the market. And that’s where we see the future going.”

“Consumers want an ecommerce experience that’s convenient and fast, and they want it to replicate their experiences in the store in the good ways.”

Mentions:

Bio:

Joe Manning is the Chief Business Officer at Shipt. Prior to joining Shipt, Joe spent more than 10 years with Starbucks Canada in multiple positions, including Senior Director of Channel Development, CPG and Head of Business Development, Channel Development, Canada.

Up Next in Commerce is brought to you by Salesforce Commerce Cloud. Respond quickly to changing customer needs with flexible Ecommerce connected to marketing, sales, and service. Deliver intelligent commerce experiences your customers can trust, across every channel. Together, we’re ready for what’s next in commerce. Learn more at salesforce.com/commerce

Transcript:

Stephanie:

Hey everyone, and welcome back to the number one ecommerce podcast. This is your host, Stephanie Postles, co-founder at Mission.org. Today on the show, we have Joe Manning, the Chief Business Officer at Shipt. Joe, welcome to the show.

Joe:

Well, thank you. Thank you for having me. I’m very excited to be here.

Stephanie:

I’m excited to have you too. How many podcasts have you done so far? You seem like a good veteran.

Joe:

This is my first.

Stephanie:

Ooh, really? Oh, this will be fun then. I love having people on for the first time.

Joe:

Cool.

Stephanie:

So before we dive into Shipt, I was hoping you could kind of touch on your background at Starbucks because I saw that you worked there, I think, for over 10 years. And I want to hear what you did there, your role and some of your learnings that you got from there.

Joe:

Absolutely. So, I had the opportunity to work for 10 years at Starbucks. Starbucks was an amazing company. And one of the things that I really loved about what Starbucks did, and does, and how that applies to Shipt, Starbucks is very focused on the human connection between the barista and the customer. And they’re great at leveraging technology. But as an enabler for a human connection. And I think at Shipt, we’re trying to do very much … We are doing very much the same thing. We are all about creating great connections between shoppers and customers, and we’re a people-first organization. And we recognize the technology is a great enabler for that. But it is about the human connection.

Joe:

And so when I was at Starbucks, I worked in a couple of different spots. One area was the licensed stores business, which is the store inside a store. So, if you go into a Target or an airport, that business model I worked with those retailers to really build out those businesses. And then in addition to that, I spent a few years on the CPG business, which is the coffee and the aisle at the grocery stores. And that retailers and I led the business development area for that for a few years as well. And as I said, it was a great experience and the commitment to partnerships and the human connection was really impactful. And really, I think, gave me great insights to bring to Shipt as we started to build out the Shipt business.

Stephanie:

That’s great. So what’s one of your favorite memories or stories when you were working at Starbucks and trying to get Starbucks within the stores, or getting it on those supermarket shelves? What do you have a fond memory of or a funny story from your days there?

Joe:

Well, I’d say, I think one of the pieces that we really focused a lot on the Starbucks cafe experiences is very unique. They take a lot of pride in that customer experience. And so it was exciting when we would bring the stories to the retailers about how to operate at Starbucks or what the brand should be within the cafe. And we started to hear where retailers were then using the same terminology that Starbucks had been using. So, it was really fun when we started to hear them repeat back to us the words and the phrases that we had used, which really signal to us that it was going to be a great partnership, that they really understood what we were trying to accomplish. And that they were embracing that for their own business purposes, which was great.

Joe:

So coffee is at the core of everything Starbucks does. And I had an opportunity to go to a coffee farm in Costa Rica. And I got to plant a coffee tree and connect with all the farmers, or a lot of the different farms in Costa Rica where we sourced or Starbucks sourced coffee. And it was just really inspirational. I mean, it was fun to do for sure, but hearing the stories from the farmers about how their lives have changed because of their opportunities to partner with Starbucks was really inspirational and really made us feel good that we were making a difference around the world, not just creating great coffee or creating great experiences in the cafes.

Stephanie:

That sounds like a really good life-changing trip. Very cool. So what had you go over to Shipt? What led you to Shipt?

Joe:

So in about end of 2015, 2016, everything in Northern California was focused on the gig economy. Airbnb was growing, Uber was growing, and grocery delivery was starting to grow. And I don’t know, about 20 years before then, there had been a grocery delivery company called Webvan that had had some success, but then it did not last. And I had been working with grocers, and it really felt like the time was right for grocery delivery to really kind of flourish. And I started looking around at different gig economy delivery companies, and I came across Shipt and Shipt was a small company. It was headquartered out of Birmingham, Alabama still is. And the founder was talking about how the quality of the shoppers and the personal experiences between the shoppers and the customers where was the competitive advantage that Shipt was going to capitalize on.

Joe:

And I really thought that that really resonated with me. I do really believe people have a personal connection to the food that they consume, the foods that they have in their homes, and creating that model. And it was different than what a lot of other companies are talking about. A lot of other companies were talking about the technology, and how technology was so important, and it was changing the landscape. And again, technology is important, but I really love the way Shipt talked about the personal connection, and the quality of the shoppers, and how that was the area where Shipt was going to invest, and it was going to win.

Joe:

And then when I met with the founder and I met with the company, the culture was just phenomenal, and it still is today. Everybody is passionate about the mission for Shipt and really focused on doing right, making a difference in the communities, passionate about building the business, but they recognize that it’s really about helping people. And if we do that, then the business results will follow.

Stephanie:

I love the fact that you guys are so focused on giving a good quality shopper that I can feel a connection with. Because so often, when I order from certain companies, I’ll get things like an avocado that’s so soft. I’m like, “Who would get this? I would never pick an avocado this soft. Or I would never pick tomatoes with fuzz on them. You obviously do not care about my groceries.” So, I feel a very close connection to having someone who … A shopper that is looking out for my best interest, and actually picking things that I want, and not just being like, “Ah, there’s five avocados, throw them in a bag, or they’re fine.”

Joe:

Well, that’s exactly right. And that’s what we hear from customers too. It’s again, produce is tough to pick. And we put a lot of effort into supporting our shoppers so that they can get the right produce. And even the product is set up so that when we ordered bananas, we order a couple of green and then three yellow because we know we’re not going to consume them fast enough. And our shoppers are graded, selecting that for us, and we get what we want. And it really is impactful because getting products that you don’t want or that aren’t going to work for you defeats the whole value proposition and the convenience of grocery delivery.

Stephanie:

So tell me a bit about how Shipt has changed over this past year because it seems like … I mean, especially with grocery delivery, people really just had to rip up their plans, and start over, and be like, “This is the new world. Now I need to figure out how I’m going to do shipping.” And everything seems so hard when it comes to grocery delivery instead of like Amazon, where they’re all on routes, and they can deliver 60 things in a day versus a grocery delivery just feels so one-to-one. So tell me, what kind of shakeups have you guys seen at Shipt, and what are you doing to tackle them?

Joe:

This year has been unreal and, obviously, unexpected. And one of the first things that we did is we ramped up our shopper network. We doubled the size of our shopper network early when COVID had spiked, and we knew demand was growing, and we knew people were just desirous of getting products delivered. And so, we wanted to be able to support as many customers as possible. So we invested a lot to ramp up the shopper network. And even as we’ve gotten into holiday now, we’re going to add another hundred … We are adding another 150,000 shoppers this holiday season. And so, building up the shopper network was first and foremost and what we need to do to support the demand. But then, in addition to that, we worked really closely with a lot of grocers and a lot of retailers to help them succeed in this space.

Joe:

And to your point, it’s a complicated model. And as you said, it’s a one-to-one model. So there isn’t the ability to drive around, for numerous routes all day long, you really have to put the care and effort into each individual order. And the order sizes are 25 to 30 items in the basket. And so we’ve worked a lot with retailers, not only to enable them on the Shipt marketplace to reach more customers. But we invested a lot in our last-mile delivery business, which we call Shipt Driven, which has really helped a lot of groceries. And a lot of retailers extend their curbside program to last-mile delivery. And that’s really been impactful certainly through COVID. And we’re seeing it even more so now during the holiday when again, there’s a little bit more of a COVID spike. But then, just during the holidays, every retailer is trying to put together the pieces to support their customers and enable them to get the products they want in a way that works for the customer.

Stephanie:

Are you also helping advise some of these retail partners around coming up with the economics to make it work? Because it seems like a big Safeway has a very different model and how to get scale and efficiencies than a local grocery might have. Are you working with them to be like, here’s what I see works? Here’s how to make the model work for you guys.

Joe:

Absolutely. And you’re right. I mean, we work with a lot of awesome regional grocers. And to your point, they don’t have the scale of some of the national grocers. And so, in putting our programs together, we work closely with them to make sure that not only is it a good experience for the customer, but that it’s economically beneficial and profitable business for the retailer. And we’ll do that in a couple of ways. We’ll certainly work with them on the technology and the integration to manage that so that it’s as cost-effective where they get the best return on investment that they can. But in addition, we’ll create marketing programs together. We’ll do merchandising programs together to add items to the basket. And then, we’ll collaborate on operations efficiencies so that we can pull out costs from the system so that it can be a profitable endeavor for them.

Stephanie:

So earlier, you were mentioning how you scaled up your shopper network. I think you said 100,000 shoppers, right?

Joe:

150,000 in holiday. And it was as a 100,000 earlier in the year. So 250,000, over the last six months or so.

Stephanie:

I mean, that’s a crazy number, especially if you’re trying to keep quality high. So how did you all go about hiring those shoppers? I mean, even finding that many people and making sure that they’re going to be the quality shoppers that you want. How did you go about scaling like that?

Joe:

Part of what we did was implemented some enhancements to our recruiting process so that we were able to move through applicants much more quickly and thoughtfully, but while still ensuring we’re getting the great quality candidates.

Joe:

We also invested a lot, as you would imagine in sourcing applicants, but we also worked with a lot of retailers back in the spring. There were a lot of retailers who were shutting down stores. And so, both our partners, as well as other retailers. We partnered with them to enable their employees who were looking for work to get fast-tracked through the Shipt application process so that if they wanted to pick up some Shipt shopping opportunities, they could, and they were great partners with whom we worked. And we got a lot of great applicants through that.

Joe:

And then another piece that we did … Doing the first shop can be intimidating for folks if they’ve never done it before. And so, we have a lot of resources available for shoppers to access. And we continue to build on those, especially around how to enable the first shop. Because once you do a shop or two, you get into a rhythm, and you feel good about it. But it takes a little encouragement sometimes to do that first shop. So we put in resources to really make it as easy as possible for our shoppers to get out there and do the first shop.

Stephanie:

That does seem kind of scary doing that first one. So, I mean, how do you think about onboarding people? Did you have to set up all-new systems for all these new people? Did you have to change a bunch of things to scale that?

Joe:

Fortunately, we had the systems in place and in part because Shipt has been expanding rapidly since 2016. And even in, I think it was 2018; we were launching three to four markets a week for a good portion of the year. So, we had really good systems in place for recruiting shoppers building the network. And so, it was really more of just kind of amplifying that so that we could go even quicker during this period of time as opposed to having to build out new systems.

Stephanie:

Got it. So when you are going into these new markets, and you’re launching quickly, what are some of the biggest issues that you encounter when you’re going into the new markets?

Joe:

So new markets they’re exciting, but they can be challenging. And one of the great things is the market dynamics differ. Launching in a New York City is different than Savannah, Georgia, for instance. And so, one of the pieces that we do is, when we go into markets, we’ll spend time there to really understand the market dynamics so that we’re thoughtful about our investments. Not only in how to recruit the shoppers to succeed in that market, but how to tailor our messaging so that it resonates with potential customers and that we’re knowledgeable about the markets. And we’ve built out a market operations team that works and serves in all the different markets in which we operate so that we have the local knowledge that we can tap into.

Joe:

But one of the things that is super exciting as we launched markets is, we will do a market launch gathering a couple of days before. And then the night before, we launched the market, and the intent there is to get together with shoppers, to engage with them. So, we understand how they’re feeling about launching this market and supporting us. We’ll partner with the retailers in those markets with whom we’ll be working. And it’s really a great opportunity. It’s a celebration of sorts. There’s a great opportunity to connect with the shoppers and really help them better understand what Shipt is all about. Help them understand the retailers with whom we’re working, and to get them excited about launching the market. And then back to the Shipt culture, part of what happens is there’s just a whole group of folks who are working through the night to make sure the launch goes off properly. They’re in the market for the next couple of days, picking up orders if we need to, troubleshooting if anything happens.

Joe:

And again, it’s a celebration, it’s a lot of work, but it’s really exciting. And listening and engaging with the shoppers is really fun because you really get to understand who they are as people. And again, how enabling these jobs is really kind of making a difference in the communities in which we operate.

Stephanie:

It seems like a really good way to also build a community among those shoppers where they could potentially get to know each other, talk about best practices. I mean, do you cultivate the community of shoppers so they can kind of have their own little network? Can you talk to me-

Joe:

Absolutely. You’re exactly right. We support the shoppers, and through various Facebook lounges, there are shopper communities. But you’re right. The shoppers build such an amazing community amongst themselves. And it’s great because they share best practices. They share tips. They’re great resources for new shoppers who again maybe are a little bit hesitant or uncertain about how to operate. And then they celebrate with each other. And there’s been instances in which there’d be a surprise party at a particular store because a shopper is just on their 5,000 shops or something like that. And we see the pictures of it and you see the shoppers. They’re just so excited for each other, and they really do support each other.

Joe:

And they recognize that the stronger the community they build, the better the customer experiences are going to be, which is going to drive more volume, which is going to be supportive for everybody. And it’s really exciting to watch. And we do think it’s something unique that we’ve helped create as what we’ve seen with other gig economy companies. They don’t put the same effort into supporting their shoppers or their gig economy workers. And we do think it’s a unique advantage that we have.

Stephanie:

And I think that’s a really good lesson for gig economy type of employers because I think a lot of people who do that work aren’t really celebrated. And you don’t see the person being really proud to be working on that because I think the company is not cultivating a community where people can be excited to actually showcase the brand and say, “This is what I do.” I mean, I think about shoppers right now. You wouldn’t know looking around Whole Foods or something, who maybe is a shopper, who’s not, they’re not wearing a shirt. They’re not walking around proud for the majority of shoppers or even delivery drivers or anything like that. And I think that the moment that you start incorporating people to be proud of their job like that, and wanting to celebrate the other people in that network and community, you’re only going to scale quicker and also build a good experience for everyone.

Joe:

Totally agree. Totally agree. And that’s I think too often, some of the technology companies look at the gig economy worker as a cost. And we look at it the other way. We celebrate them, they’re a phenomenal brand representation, and they represent our brand, and they represent the retailers with whom we work. And so, the more they feel good about what they’re doing, the more we can help support them to do a great job. Often, it’ll show up in the customer experience, and that’s so hugely important. And so, we are excited about that, and we do provide Shipt Swag, let’s call it because-

Stephanie:

It actually sounds better.

Joe:

For sure, the shoppers wanted it. And it’s great. And again, I mean, it’s brand building, but it’s really more … It speaks to how excited they are about what they’re doing. And then the stories we hear from the shoppers, they feel like they’re making a difference in people’s lives. And that’s invaluable to growing and driving the business. And so, we’re excited about that.

Stephanie:

I think people view … I mean, at least out in Silicon Valley … And you probably know this Joe, since you lived out here. But swag being a thing of like, “Oh, you get so much of it.” Employees don’t even want that anymore. Don’t spend money; it’s a waste. They just throw it away or whatever. But I think they aren’t thinking about the rest of the country who actually still celebrates a great t-shirt or hoodie and how important that is to them. And that’s still a good technique to keep your employees engaged and excited to get something great.

Joe:

Absolutely. Absolutely.

Stephanie:

So let’s talk a bit about customer acquisition. I saw a few articles where you were giving Shipt, I think, memberships to the elderly for free, which I was like, “Wow, that is genius.” Because these are people who maybe wouldn’t have engaged with grocery delivery ever before, but it’s a good way to not only help them right now but also have a long time customer, even when COVID and everything’s done. So how do you think about growing your customer base, getting on their radar, people who maybe would never find you organically?

Joe:

And so, one of the things that came out through COVID, there were a lot of people who tried grocery delivery for the first time. And we saw a large increase in the senior population as well. And it makes sense there may be a little less or a little reluctant to go out to the stores. And so, from that, we began talking to different agencies across the country who support the senior population. As well as talking to some healthcare entities and talking about how do we work together to build awareness about grocery delivery, make it easy for folks to get grocery delivery, support them economically? And so, that’s been an area that we are continuing to invest in because we’re seeing good results. And again, we know it makes a difference in the community, and the feedback we’ve gotten from the agencies and the senior population has been phenomenal.

Joe:

In addition to that, I mean, again, desire for grocery delivery has skyrocketed this year. Previously, Shipt was a membership only option you had to buy and an annual membership. During this year, we expanded to offer a pay per order option. And then you can also one order, or you can buy passes and get multiple orders. But we did that because, again, we knew people wanted to try the service. They weren’t certain that it was for them, and either they wanted to try it because they were in a need state for it or because it was just new to them. But by enabling the PPO option, we have greatly expanded the number of customers that we’re reaching. And it’s really been, again, it gets back to supporting customers in a way, where they are today. And sell by providing the individual orders or the passes we’ve greatly increased the number of customers that are accessing the Shipt service.

Stephanie:

So how did you think about retention when it comes to … I mean, I think that’s great to be able to allow someone to pay for order. I know that would be something I would do. Is like try it at once and if it works well, maybe do the subscription, or maybe just keep paying for order. But how did you think about retaining someone who might just try it out and then forget how do you keep that customer around for the longterm?

Joe:

Absolutely. And with our members, the usage and the retention is phenomenal, and it makes sense. They’ve committed to the membership with the PPO customers. We are very focused on connecting with them and engaging with them so that we’re giving them multiple opportunities to use this service several times. What we’ve found is using the service several times, it starts to become part of your shopping pattern. And so, part of what we do is we continue to connect, to communicate with those customers to make it worthwhile for them to try it a second or a third time if they haven’t.

Joe:

And what we’ve seen, we’ve been very pleased. What we’ve seen is the transition from PPO to either multiple passes or Shipt Everyday, which is our annual membership, has been very good. And what we do find is as they use the service a couple of times, the quality of the service they’re very pleased with. And so that gets them to kind of continue. But to your point, we’re absolutely focused on how do we continue to connect and communicate with them so that they aren’t one-time customers, but they become a much bigger part of connecting with us.

Stephanie:

So this past year, I’m sure you guys have noticed customers coming to you from many different channels. Like new channels are popping up to tax, not very big. I mean, where have you seen your new customers coming from, and how are you also trying to differentiate yourself from all the other competitors right now? Because I’m thinking, if I’m a customer, and I’m scrambling, like, “I need eggs.” I’m just going to go on there and be like, “Okay, either I can just go on Amazon, because I already have a Prime account or let me just try, Instacart or whatever. How do you make sure to separate yourself, and really show your value, and also get on new and different channels, and finding customers in new ways where maybe other brands aren’t doing that?

Joe:

We think the quality of the experience that we provide continues to be our competitive differentiation, and the quality of our shoppers is far and away superior to others in the market. We’ve always been very good at digital marketing, and we continue to invest there. We’ve also done quite a fair number of social media campaigns that have created different avenues and exposed us to different customer demographics that have been really beneficial. And then we’ve also leaned in more to traditional marketing as, particularly for the grocery space; we find that to be an effective channel. And so, in working with our grocers and exploring traditional media, we’ve seen some very good results with that. And so, it’s really quite a credit cross-section of investments across various channels. But we’re seeing good success across all the different channels in which we invest.

Stephanie:

Cool. I could see there being some fun campaigns with just an image of a dirty little brown banana and being like, “Did you just get this delivered to you? Come on over to Shipt. It’ll never happen.”

Joe:

Absolutely. And one of the campaigns we did, we talked about again the quality of our shoppers. And there were fun little snippets of how the shoppers will go above and beyond to get you the right product. And I think there was a version of it was tongue in cheek. But a shopper going into a lake to make sure you’re getting fresh fish or diving into the freezer at the grocery store to get you the right product. And really trying to capitalize on the quality of the shopper is really beneficial because you want to get the products that you want, and not have somebody who’s just focused on trying to get in and out of the store as quickly as possible, and throwing whatever in the bag to deliver it to you.

Stephanie:

So, with the holidays coming, you hear a lot right now with ecommerce about there’s going to be a ton more demand for shipping. Things are going to get held up. How are you guys approaching the holiday season right now since you don’t only do grocery, you do other things as well?

Joe:

That’s right. And so, as we said earlier, ramped up the shopper network so that we can continue to support the increased demand. One of the areas where we’ve invested a lot in 2020 is in our last-mile delivery, so, Shipt Driven. And that’s a program where a customer will actually place an order of the retailer’s property or ecommerce program, and our shopper will arrive at the store and pick up the order and drive it to the customer’s home. So it’s basically extending BOPUS to last-mile delivery. And that business has skyrocketed this year. And we’ve got a great lineup of retailers that go beyond just the grocery side. So, we work with Bed Bath & Beyond, and Best Buy, and CVS, and Office Depot.

Joe:

And one of the things we’re doing closely, we work closely with those retailers. We are managing, or we’re partnering on forecasting so that we understand not only holistically what kind of volume we’re thinking there’s going to be, but even down to the store level because we’ll make sure that we’re hiring the right shop. Not just the right number of shoppers, but the right shoppers in the right locations. And then in addition, we are really focused between both the driven business and the marketplace on communicating that you can get products delivered the same day.

Joe:

And I think particularly in the next couple of weeks as other services are going to take longer to get products, we’re going to communicate to customers that whatever product you’re looking for, you can get it that day and at the last minute. Gifting ideas and through the holiday, ensuring that people are getting the products before the holiday arrives is a big opportunity that we’re going to focus on from a Shipt marketplace standpoint. But also in partnership with our retailers on the last mile piece, because we can enable same-day delivery for those retailers as well.

Stephanie:

That seems like a really good opportunity there. And so many people are trying to figure out that last-mile delivery. What are some of the hiccups you encountered when setting that up? Because that once again seems like a very hard problem to solve, starting to work with all different kinds of retailers and solving that problem for them.

Joe:

So, fortunately, we’ve got such a great network of shoppers that on our side for the logistics that’s the foundation is in place. I think what we find with retailers is they’re standing that up, and how we work with them. Fulfillment costs can be daunting. And particularly on the last mile piece, the retailer needs to be prepared to collect those orders and ship those orders so that we can then drive at the last mile. So, we work with them to try to help them think through how to forecast and then how to plan for that fulfillment piece because that is an area that we have experience in. But in this model, they’re going to be managing that. So that’s one piece.

Joe:

And then, working with them on the operations and the handoff, it’s not difficult, but we do put effort in there. Their store associates need to know who Shipt is, and why we’re showing up at the store, and collaborating on how we connect with the customer to ensure that we’re communicating effectively with the customer. Both on when is the order ready, when we’re picking it up, when it will be dropped off, and if for some reason there are returns or other items that we need to communicate, setting up that structure so that we’re all communicating effectively. So, that is a great customer experience.

Stephanie:

So you mentioned forecasting a couple of times. And you share those plans with the retailers to also help them plan for inventory, and like you said, fulfillment and everything. Is that a pretty standard process, or does every retailer in market … Is everyone having a different kind of forecast or a training procedure to work through to be prepared this year?

Joe:

Yeah. So, we do collaborate with retailers, and we’ll let them know what kind of volume we’re expecting, and they’ll share with us as well so that we can do what we can to manage inventory positions. Every retailer has their own process for that, but we have a dedicated team. We call it the Partner Success Team. They’re phenomenal, and they work closely. Every retailer gets a dedicated team that supports them. And again, I think it’s an area where we’ve invested more than a lot of other companies because these retail partnerships are so hugely important that we want to make sure they’re getting the support that they need.

Joe:

And the feedback we’ve gotten from the retailers is that far and away, our commitment to details or thoroughness, and our communication exceeds what they see with other partners that they have. But on the forecasting, we’ll work closely with them. We’ll communicate the numbers that we’re seeing. They’ll share what they’re seeing, and we’ll review it, certainly right now on a weekly basis because if there’s going to be spikes in demand, we want to be prepared for that so that we can create great customer experiences.

Stephanie:

That’ll be interesting to see what happens this holiday season. So, where do you see the future of app-based delivery headed? What are you all planning for?

Joe:

So, everything we see through the pandemic, grocery delivery is certainly going to continue to be a huge part of the grocery industry. And I was thinking about there’s in 2016, a lot of people in the grocery space didn’t think customers would ever really embrace ecommerce that they needed to be in the store. They needed to see the produce they needed to choose it for themselves. And since 2016, so many things have changed. And so, grocery commerce is still going to be a huge portion of the business. I think projections are 2025. There’ll be no more than 20% of the business. So we don’t think I don’t see anything changing there.

Joe:

The other … But in addition, and we do work with retailers outside of the grocery space. What I think the pandemic has created is, retailers are building out a broad ecosystem of ecommerce solutions for the customers. They’re recognizing that customers are going to want to interact with them and their products in different ways. And they want to let the customer choose how they want to get the products. And whether that’s a third-party marketplace like Shipt, or if they want to do pickup, or having the retailers enable last-mile delivery through their own ecommerce programs. That, to us, feels like the winning strategy. That’s what we’re seeing, the retailers who are creating multiple options in allowing the customer to choose. Those are the ones that appear to be gaining a share and taking more of the business in the market. And that’s where we see the future going.

Stephanie:

I’ve heard that quite a few times where the market is headed to where the consumers now know that there’s options and they should have all the options and it needs to be the best option that they get to choose. And that wasn’t something that even a year or two ago was something that may be a lot of consumers expected. So, I think that’s a fun place where it’s headed, though.

Joe:

Yeah, I agree. And I think that’s it. I think awareness has grown so much so; customers are way more aware right now. And like everything else, they want to choose. It’s the same if you go into a store, into a category. There’s lots of options because consumers want to have the right to choose what they want. And again, I think the pandemic has kind of accelerated that mindset a little bit. Particularly as awareness has grown so much.

Stephanie:

So what kind of tech advancements are you all most excited about, or what tech enablements are helping your business the most right now?

Joe:

I think, again, I’ll talk a little bit about grocery. But it’s consumers want the ecommerce experience that’s convenient and fast, and they want it to replicate their experiences in the store in the good ways. And so, some of the pieces that we’re excited about substitutions, is a big portion of the shopping experience. It’s about 76% of orders will have an item that’s not available in the store. And so, substitution is an option there for the customer. So, we’re enabling proactive substitutions to make that as seamless as possible. And we know it resonates because again, the customer wants to get the products and they want … If you think if you’re in the aisle, I can make a choice there because I’m looking across it. So how do we bring that to life through the ecommerce experience?

Joe:

And so we’ve enabled some features there, and we’ll continue to build on that savings and loyalty programs continue to be a big portion. We look to integrate in with retailers’ loyalty programs as much as possible. We know the consumers like that. And they want to get rewarded for making the purchase, whether it’s inside the store or through Shipt. And so we’re bringing that to life. And the other piece is continuing to find ways to enable exploration through ecommerce, it’s still the early stage, but if you think about all the different touchpoints inside a store in which a retailer can speak to a customer, how do we bring that to life through ecommerce.

Joe:

And then the extension of that is personalization, especially in the food space, everybody’s eating habits are very different. And so, how do we continue to capitalize on personalization so that the way my interaction in the app is different than yours based on my preferences? And how do we gather those preferences? But then also, continue to enable that, so that I’m getting access or information about the products that are most relevant to me. So, I think from a customer experience those are some of the areas that we’re really excited about.

Stephanie:

Cool. It seems like imagery too, is, such an important piece of it. I know when I’ve ordered food before, if they … I mean, why I go to the grocery store is so I can maybe look around and be like, “Oh, I didn’t know I wanted that goat cheese and red wine type of thing. But it’s so beautiful looking, and it’s very enticing. I’m going to get it.” And I think that’s something where if it was in an app and it showed it right next to something, I would right away probably add to cart. But sometimes, it feels like that’s still lacking of having the right imagery and being able to showcase it in a way that really makes me want it just like I would in the store.

Joe:

Totally. That’s right. I mean, and image coverage is not where it needs to be. And again, part of it is for a lot of the industry they weren’t really built for ecommerce. And so, they’re moving quickly to enable elements like that, but you’re right. I mean, that’s such a huge opportunity. And then, even I think with the patterns that may be the pandemic have created there’s a lot more eating at home. So how do you continue to find variety and give consumers various options that fit in with what they want, but they may not be thinking about on their own? And I think that will continue to be a bigger opportunity. And I think that’ll last post-pandemic as well.

Stephanie:

Do you know what I want? I want a surprise me button. I want my shopper to know me so well where I’m just like, “Here’s $3, surprise me with something.” Because that’s why you go to the grocery store. Sometimes, you feel like, “Oh, I’m pleasantly surprised by what I just spent on like …” Can my shopper do that for me?

Joe:

Totally, absolutely. And so, you should try it out. We have a special request portion of our product when … So you can … If for some reason you’re not finding a product that you need, or if you have a special request, you can put that in. And so, you absolutely should. And I think the shoppers would love that. They totally enjoy that. And I mean, we’ve got two dogs, and there’s a handful of shoppers that we see regularly, and the dogs love when the shopper pulls up because they know that food is coming, which they’re excited about. But also, the shoppers have multiple times picked up a little treat that they’ve seen for the dogs. Because they just think it’s fun. And so, you absolutely should test that out.

Stephanie:

That’s fun. And what about things like personal barcode shopping and things like that, or ways to make the shoppers more efficient? But then you have to partner with retailers to enable that. Are there any technologies in that area that you guys are exploring right now?

Joe:

Yes. And so, creating the efficiencies is a big focus area for us and will continue to be. And so, a couple of the areas, you had hit on like the product catalog, and imagery, and attributes for the products, that’s an area. But for driving the efficiencies, we work really closely with the retailers and out of stock information. We have real-time data because we have shoppers that are in the store and they’re looking for particular products. And so, we share that with the retailers to help them incorporate that in with their logistics information to try to reduce out-of-stocks. And we’ve seen some really good results with retailers where our data was helpful as an additional data point to solve some out-of-stocks. And so that’s a big area that we focus on.

Joe:

Getting good IO location data is really helpful for helping the shopper navigate through the store. And so, we’ll work with retailers on that. And then, I think your barcode scanning, we call it scan and go technology. We’ve enabled that with a couple of retailers, we’re going to continue to build on that. And that is just so helpful for moving through the store more quickly, reducing checkout time, and reducing some of the labor costs in the store because the more that we can simplify the checkout process, that’s labor savings with the retailers. And then, we’re at the early stage of looking at other kinds of automated opportunities. And how do we take advantage of some of the investments that the retailers are to generate efficiencies?

Stephanie:

I see. And they should [inaudible] Bigger ones like Walmart were experimenting with having robots going down the aisles to map the store and take inventory. But having just so many issues depending on things were all jumbled behind the one that was near the aisle or how high the aisles were. And it seems like a big problem to solve, but something that could really help a lot of … Especially larger retailers like the Costcos of the world, who just have so much stuff to inventory all the time and are constantly running out of things.

Joe:

Absolutely. And that’s I think the bigger stores. But even the traditional grocery store could have 45,000, 50,000 skews. So it’s such a big opportunity. I think there’s going to be a lot of investments and especially as ecommerce has grown. Again, in many ways, the grocery industry is still early in the ecommerce space. And so, I do think there’s going to be a lot of good technologies developed that will really help generate efficiencies, which will ultimately be a great win for the consumer because the efficiencies will drive down costs.

Stephanie:

Yep. I agree. All right. Let’s move over to the lightning round, brought to you by our friends at Salesforce Commerce Cloud. This is where I’m going to ask you a question, and you have a minute or less to answer. Joe, are you ready?

Joe:

Yeah, I’m ready.

Stephanie:

All right. I feel like you’re on a roll. So I’m going to start with the trickier question first. What one thing will have the biggest impact on ecommerce in the next year?

Joe:

Well, the pandemic is certainly going to continue to have an impact on ecommerce. But I think ultimately, it will be how quickly retailers can continue to build out a broad ecosystem. And I think that’s what customers are looking for. And I think those who move quickly to enable that will be most successful.

Stephanie:

What is one of your favorite business or management books that you refer back to from time to time?

Joe:

Well, it’s funny. I just had this conversation with somebody with one of my peers and we were talking about strategy, and Art of War is something that I have on my bookshelf, and I do refer to it on an ongoing basis. I just think it’s … I mean, it’s a classic, but I find it to be really beneficial.

Stephanie:

I love that one. What do you not understand today that you wish you did?

Joe:

Oh gosh. There’s not a limit there. I think the piece that I want to continue to more broadly understand is the customer buying patterns across retailers and how that will continue to change. Everybody’s got their collection of retailers that they shop for. And I just had this conversation recently because we were driving down the road, and there was a little strip mall that we’ve never really gone in. Those stores, I’m sure, are great. It’s all part of our pattern. So the psychology behind creating the patterns and the behaviors, and then what would it require to disrupt that.

Stephanie:

That’s a good answer. I like that. If you were to have a podcast, what would the podcast be about, and who would your first guest be?

Joe:

So I-

Stephanie:

I think you’ve thought about this-

Joe:

I have. I think podcasts are awesome, and I’m so envious. So, an area that I’ve found to be more interesting of late, I kind of stumbled across this street art. And so, Denver has got a really good community of street artists. And so I think it’s super cool. And if … I mean, my goal and I would love to meet Banksy, who’s a street artist out in the UK. And that’s if I could have him on my podcast. That’s how I would do my one episode, and I’d be done.

Stephanie:

Like mic drop, I’m good.

Joe:

Exactly.

Stephanie:

That’d be a good one. All right. And then the last one, what is the favorite app on your phone?

Joe:

So, my favorite app, I don’t know if I should say, well, DraftKings is recently become legal in Colorado. I have two boys. And so, we like pro football. And so, every Sunday, we choose a game and put 10 bucks on it. And so that is … It’s probably not the best family forward kind of thing, but we’re having fun with it.

Stephanie:

Sounds pretty family forward to me, so, you can do what you want, Joe.

Joe:

So let me know if you have any recommendations because we haven’t been winning the last couple of weeks.

Stephanie:

Oh, man. You don’t want recommendations from me. Trust me. I’ll let you guys do your thing there. I’ll trust you. All right, Joe. Well, this interview has been great. Where can people find out more about you and Shipt?

Joe:

So Shipt.com and download the Shipt app. And then I am on LinkedIn, and Joe Manning chipped up on LinkedIn.

Stephanie:

Awesome. Thanks so much for coming on.

Joe:

Thank you. I really appreciate it.

Join the discussion

Episode 64