Will GoPuff go poof?
Earlier this month, we learned that Getir would collapse its global operations back to its single, original market, Turkey - exiting the United States and Europe. Now, we have an article from The Information on the on-going financial struggles of GoPuff - the dark c-store that promised to get you Nachos in a flash, sometimes via drone delivery.
Apparently, GoPuff burned through $400 million in 2023 alone and apparently this wasn't in some Brewster's Millions-type contest. It has been through four rounds of layoffs since 2022.
Back in the era of cheap money, GoPuff was the future. COVID only ballooned the thesis that what the world needed was instant junk food at your door. They raised a gargantuan amount of money and went from 1 dark store in 2017 to 600 today. Trouble is, rapid delivery is very expensive and hard to turn profitable on Hershey's chocolate and a gallon of milk.
Now that a certificate of deposit returns a tidy sum, it's hard to pry investment from deep-pockets without a credible story around making profit. Amazon putting anywhere from 10 million to 30 million square feet of industrial space up for sublet isn't helping build investor confidence.
领英推荐
Which begs a question about the future of B2C for consumer goods: what is the real market for rapid-delivery? In the heady days of Covid, too many frenzied clients asked LIDD to think about 1 hour delivery, then 30 minutes, then 10 minutes - some asked about the state of teleportation technology. Ok, the last bit isn't true. But the frenzy bit is.
Surely, there's a market for rapid-delivery but how big is it? Maybe, not so big when set against the market for - convenient ordering of a large assortment with predictable delivery times. As a consumer, I'm in the latter camp. I use Ubereats not for its speediness. I use it because it's a convenient app to access the largest assortment of delivery options. That my favorite local pizzeria is never shorter than a 60 minute delivery doesn't bother me. I plan around that. Predictability, I think, trumps speed.
Supply Chain Executive | Advisor | Strategist | Change Agent | Product & Team Builder
10 个月Totally agreed Charles Fallon. There are specific use cases that map well for on-demand delivery, however, low margin commodities like Milk and chocolate bars just can't bare the expense. Post covid and macro economic head winds are pulling these business cases into rational thinking.