Lemon Perfect founder and CEO Yanni Hufnagel didn’t know it yet, but his hydrating lemon water brand was about to go viral in 2020, all thanks to an unexpected appearance of the Dragon Fruit Mango bottle in the door of Beyoncé Knowles-Carter’s limo.
“She had posted a photo with it in her limo, and all of a sudden my phone blew up,” Hufnagel said. “We came to learn that she was an authentic fan of the brand. A year later, one of our investors was in her house and saw her stash in the fridge and helped us build the bridge with her. It is beyond my wildest dreams to have someone of her influence being a fan of the brand.”
The company announced Thursday that Knowles-Carter is a backer in its $31 million Series A alongside Beechwood Capital, Goat Rodeo Capital, Melitas Ventures, NNS Capital and Trousdale Ventures.
“I don’t typically enjoy drinks without added sugar, but Lemon Perfect is delicious,” said Knowles-Carter in a statement. “It was an easy decision to invest in something that not only tastes great and is healthy, but also, and most importantly, allows choosing a healthier lifestyle to be affordable and accessible to everyone.”
Hufnagel started the Atlanta-based company in 2017 after a career as a college basketball coach for University of Nevada, Reno. After an unexpected encounter with a store owner who dreamed of being a coach, the store owner ended up sending Hufnagel a draft of a book he was writing about the Keto diet, which included recipes for lemon water.
After seeing his basketball players drinking Bai in the locker room, it got Hufnagel thinking about taking lemon water and giving it the same foundation as Bai and to go after the multibillion-dollar enhanced water category that he thought was ripe for disruption. This market is expected to grow nearly 9% annually over the next five years.
Today, Lemon Perfect is in direct competition with drinks like Bai, Vitamin Water and Hint. It comes in flavors, including Beyoncé’s favorite Dragon Fruit Mango, Just Lemon, Blueberry Acai and Peach Raspberry. The drinks have five calories, contain potassium and vitamin C, but zero sugar and no artificial flavors or sweeteners.
“Nothing with our flavor and health profile is on the market today,” Hufnagel added. “And, our price point is at where a consumer anywhere and anytime can become a customer. It is very rare that you can have a total addressable market like we do.”
The Series A announced today is a combination of a $16.5 million initial round and a $14 million extension, Hufnagel said. The new investment gives Lemon Perfect total funding to date of $42.2 million and a total valuation to over $100 million.
The company previously raised funding two years ago, but the driver for this new financing was simple: growth. Hufnagel wants to scale the brand to more than 40,000 points of distribution by the end of 2022, which will require a substantial field sales team. Currently it is sitting at 25,000 points of distribution, including its website, Amazon and retailers across the country like Publix, Fred Meyer and Mariano’s. Lemon Perfect is also poised to launch in Costco in the summer.
In 2021, Lemon Perfect quadrupled its revenue to $21 million, and Hufnagel estimates the company will do $60 million in retail sales in 2022, up from $25 million last year. He also expects to more than double the business in terms of revenue this year. Along with that growth has come a boost in headcount, which stands at 70, up from 38 employees a year ago.
“Beverage is an expensive game, and access to capital is the only way to drive a fast-scaling brand forward,” Hufnagel said. “We want to be a disruptive player in a large category and want to put fuel on the fire. We felt like we were able to drive great execution, but still have room to grow and want to build a big margin story for tomorrow.”
If you were a product manager at Walmart’s Sam’s Club, there is one thing that would keep you up at night: Costco. You’d know that your product development definition was broken because the customers that you wanted to come into your Sam’s Club stores all too often were heading over to shop at Costco. The people that you needed to be shopping in your store were well-to-do shoppers who would be willing to spend a lot at your store. However, the people that you were getting were the Walmart customers who traditionally were seeking bargains. This is not going to look good on anyone’s product manager resume. The well-to-do shoppers were all heading over to Costco. What’s a product manager to do?
Time To Grow Smaller
The Sam’s Club product managers have come up with a plan. They want to operate fewer Sam’s Club stores and they are hoping that by doing this they’ll be able to do a better job of attracting the shoppers who are currently going to Costco. The first step in this process occurred when Walmart announced that they would be closing 63 Sam’s Club stores. This is the biggest round of closings since Sam’s Club was started in 1983. There are a couple of reasons for the closings. The first is that more and more of the Sam’s Club customers are shopping online and so they they don’t feel the need to visit a store. Costco’s success is the other reason. The Sam’s Club product managers believe that by becoming smaller, they will be better positioned to compete with Costco.
The product manager’s strategy is not so much to close down Sam’s Clubs as it is to find a way to transform the business that they are involved in. What the Sam’s product managers want to do by closing some of their lower performing stores is to spend more time focusing on their stores that are bringing in higher profits. They are especially interested in those stores that are currently serving more-affluent shoppers. Going forward, the Sam’s Club product managers want to focus on serving a single demographic of customer: families who have children and an annual income of between US$75,000 and US$125,000. They identified this demographic by creating an internal team with consultants who then took a look at the buying behavior of Sam’s Club customers. What they discovered is that a number of the customers that they were classifying as small business buyers were actually buying a lot of products for their home.
Going forward, the Sam’s Club product managers believe that the shoppers that they are going to be focusing on are going to continue to purchase products for their small businesses and this has always been a key part of how Sam’s Club makes money. However, what’s going to be new is that Sam’s Club is no longer going to be spending money and time trying to attract customers from much narrower groups. Sam’s Clubs have always had a problem with sales. They generally only act as a source of profits for Walmart instead of competing with Costco and becoming a growth engine. One of the reasons for this is that Costco got its start out on the West Coast and opened its stores in affluent West Coast areas. Sam’s Club stores have generally been opened near Walmart stores which are located in lower-income or less populated areas.
The Smaller Strategy
Financially Costco has been doing better than Sam’s Club. Last year, Costco’s sales in existing stores increased by 3.8%. Sam’s Club stores only had a 0.2% increase. Sam’s Club store sales are starting to pick up, but not as fast as Costco’s are. Sam’s Club product managers have always wanted to find ways to attract higher income shoppers into their stores. Back in 2001 expensive jewelry was added to the store and the company said that they were interested in offering high end art also in order to do a better job of keeping up with Costco. Over time, they have also added more fresh food and they have done a general upgrade of their merchandise. What they have been trying to do is to transform Sam’s Club into a company that more closely resembles Costco.
When the Sam’s Club product managers had to make decisions about what stores to close, they had to take a number of different issues into consideration. They had always wanted to be able to target higher income customers, but the location of the Sam’s Club stores were making this difficult to do. When they were selecting which stores to close, one of the criteria that the product managers used was to select the stores that were making less money because they had a remote location. This made it very hard to keep them properly stocked. The Sam’s Club stores in Alaska were a good example of this. Other stores were drawing too much traffic from other Sam’s Club stores in the area. Some were located in places where the consumer population had declined, but competition for customers was very high. Costco played a role in helping the Sam’s Club product manager decide what stores to close. All of the Sam’s Club stores in Costco’s home state of Washington were closed as well as other Sam’s Club stores that competed heavily with Costco stores.
In order to meet the needs of their new target customers, the Sam’s Club product managers are in the process of reviewing their inventory in order to determine what they are going to want to stock. The thinking is that this is going to lead to Sam’s Club carrying more household goods and fewer bulk food products. Sam’s Club has added more workers to their produce area and increased training of these workers. These steps have been taken because studies have shown that many customers decide where they are going to shop based on the quality of a store’s produce area. The Sam’s Club product managers realize that how their customers shop is undergoing a very large change. In order to deal with these changes, the Sam’s Club product managers are planning on using a number of the Sam’s Clubs that have been closed as e-commerce fulfillment centers. These sites will then be used to allow home deliveries to be made faster.
What All Of This Means For You
As product managers, based on our product manager job description, we have been taught that in order to sell more of our product, we have to get bigger. However, it turns out that in the real world this is not always the case. Over at Sam’s Club they have been struggling with competition from Costco and they have not been able to come up with a way to attract the customers that they want. Is becoming smaller the right answer for them?
In order to solve this problem, the Sam’s Club product managers have decided to close 63 of their lower performing stores. The stores are being closed because people are doing more shopping online and because of the competition that Costco is creating. The product managers are going to focus on those stores that are currently serving more-affluent shoppers. They plan on serving a single demographic of customer: families who have children and an annual income of between US$75,000 and US$125,000. Costco has been able to capture the customers that Sam’s Clubs want because they are located in affluent parts of the West Coast. Sam’s Club has tried to become more attractive to higher-end shoppers by carrying more jewelry and adding produce. The Sam’s Club product managers very carefully chose which stores they were going to be closing. Studies have shown that customers pick where they are going to be shopping by the quality of the produce department. Sam’s Club has added more workers to their product department and has provided them with more training.
As product managers, we are always up for a good challenge. The Sam’s Club product managers are facing a real challenge in terms of trying to attract the type of customers who are currently going to Costco to shop. They’ve taken the dramatic step of closing 63 stores in order to better focus on the stores that can help them to meet their goal. This is a bold move and we’re all going to have to watch them carefully to see if they are now able to attract the type of customer that they have wanted for so long.
This story was reported in partnership with video surveillance news site IPVM.
U.S. retail giants Home Depot and Best Buy have pulled the Chinese video surveillance technology makers Lorex and Ezviz from their stores over links to human rights abuses.
In a statement to TechCrunch, Home Depot said it’s “committed to upholding the highest standards of ethical sourcing and we immediately stopped selling products from Lorex when this was brought to our attention.” Best Buy said it was “discontinuing its relationship” with both Lorex and Ezviz.
Lorex is a subsidiary of Dahua Technology, and Ezviz is a video surveillance camera brand owned by Hikvision. Dahua and Hikvision, both headquartered in China, were added to the U.S. government’s economic blacklist in 2019 after the companies were linked to China’s ongoing efforts to suppress ethnic minorities in Xinjiang, where most Uighur Muslims live.
The U.S. government says Beijing relies heavily on Hikvision, Dahua and other technology companies to supply the surveillance equipment to surveil the Uighur population. The Biden administration called the human rights abuses in Xinjiang a “genocide,” and blamed Chinese video surveillance manufacturers of having “been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups.”
United Nations watchdogs say Chinese authorities have detained over a million Uighurs in internment camps in recent years. China has long denied the allegations.
But as the sanctions neither cover Dahua and Hikvision subsidiaries like Lorex and Ezviz and don’t apply outside the federal government, consumers are still broadly free to buy the technology.
Until last week, Lorex listed on its website Home Depot, Best Buy, Lowe’s, Walmart and Costo as its five authorized national retail outlets.
When reached for comment, a Lorex spokesperson said: “Lorex is fully transparent with our retail partners about our ownership and have been since the acquisition in 2018. We are also regularly in touch with representatives of those companies in regard to various regulatory and compliance issues, including addressing any questions they have about the FCC’s proposed rulemaking.”
Lorex did not respond to follow-up emails after its products were removed. Lorex removed the logos of the five retail giants from its website, though it still lists the companies — except Walmart — as retailers of its technology.
Walmart and Costco, which still stock Lorex and Ezviz technology, did not respond to requests for comment.
Dolkun Isa, the president of the World Uyghur Congress, welcomed the “meaningful actions” by the U.S. government with bans on forced labor and sanctions for Chinese companies, but said that it’s “unacceptable that there are still American companies directly helping further the repression.”
Hikvision did not respond to requests for comment by TechCrunch and IPVM.
Bob Ma is an investor at WIND Ventures, where he invests in energy, retail and mobility startups. Prior to joining WIND, he was an investor at Soma Capital, where he invested venture capital globally across the consumer and enterprise sectors.
In the United States, same-day and next-day Amazon Prime deliveries have become the de facto standard in e-commerce. People want convenience and instant gratification, evidenced by the fact that an astonishing ~45% of U.S. consumers are Amazon Prime members.
E-commerce in LatAm has taken off at a compound annual industry growth rate of 16% over the past five years.
The holdout: Latin America
Venture capitalists have been investing heavily in last-mile delivery over the past five years on a global scale, but Latin America (LatAm) has lagged behind. Over $11 billion has been invested globally in last-mile logistics over the past decade, but Latin America only saw about $1 billion over the same period (Source: PitchBook and WIND Ventures research).
Within this, only about $300 million was in Spanish-speaking Latin America — a surprisingly small amount for a region that has 110 million more consumers than in the U.S.
Brazil-based Loggi accounts for about 60% of last-mile VC investment in Latin America, but it only operates in Brazil. That leaves major Spanish countries like Mexico, Colombia, Chile and Argentina without a leading independent last-mile logistics company.
In these countries, about 60% of the last-mile delivery market is dominated by small, informal companies or independent drivers using their own trucks. This results in inefficiencies due to a lack of technologies such as route optimization as well as a lack of operating scale. These issues are quickly becoming more pronounced as e-commerce in LatAm has taken off at a compound annual industry growth rate of 16% over the past five years.
Retailers are missing an opportunity to give customers what they want. Customers today expect free, reliable same- or next-day delivery — on-time, all the time, and without damage or theft. All of these are challenging in LatAm. Theft, in particular, is a significant problem, because unprofessional drivers often steal products out for delivery and then sell them for a profit. Cost is a problem, too, because free same- and next-day deliveries are simply not available in many places.
Operational and technological roadblocks abound
Why does Latin America lag when it comes to the last mile? First, traditional LatAm e-commerce delivery involves multiple time-consuming steps: Products are picked up from the retailer, delivered to a cross-dock, distributed to a warehouse, delivered to a second cross-dock, and then finally delivered to the customer.
By comparison, modern delivery operations are much simpler. Products are picked up from the retailer, delivered to a cross-dock, and then delivered directly to the customer. There’s no need for warehousing and an extra pre-warehouse cross-dock.
And those are just the operational challenges. Lack of technology also plays a significant role. Most delivery coordination and routing in LatAm are still done via a spreadsheet or pen and paper.
Dispatchers have to manually pick up a phone to call drivers and dispatch them. In the U.S., computerized optimization algorithms dramatically cut both delivery cost and time by automatically finding the most efficient route (e.g., packing the most deliveries possible on a truck along the route) and automatically dispatching the driver that can most efficiently complete the route based on current location, capacity and experience with the route. These algorithms are almost unheard of in the Latin America retail logistics sector.
Moving services giant Updater is bringing on the team from Dolly as the New York company looks to expand its scope of offerings with the acquisition of the on-demand startup known for helping consumers execute small-scale moves.
Dolly connects users in need of moving a large item like a piece of furniture with a contractor ready to lend a hand. Like competing services such as Lugg, the app has been a popular solution for picking up items from peer-to-peer marketplaces like Craigslist. Dolly boasts a partnership with Facebook Marketplace that has allowed its users to coordinate picking up items with the service, available in 45 major cities across the US, according to their website.
In addition to its user-facing service, Dolly has also built a major business partnering with retailers directly allowing them to tap into their mover network and coordinate same-day delivery for customers. Dolly’s retail partners include companies like Costco, Lowe’s and The Container Store.
A price tag for the deal wasn’t disclosed and couldn’t be learned. Dolly raised $17.2 million over several rounds, including a $7.5 million Series B in May of 2019. The startup’s backers include Maveron, Hyde Park Venture Partners and Version One Ventures.
As part of the acquisition, Dolly will be living on an independent, wholly-owned subsidiary of Updater.
The SoftBank-backed Updater is an “invite-only” service focused on building a more premium end-to-end moving experience. The team has partnered with a number of major brokerage firms whose customers are given the option to use Updater’s services to coordinate their move, pairing them with moving companies who use Updater’s MoveHQ software platform. Today, a quarter of US household moves are facilitated using one of Updater’s products, the company says.
The firm has raised nearly $200 million since its founding in 2010. Dolly’s acquisition will allow Updater to expand their services to customers that are “conducting a small move or don’t want to book a full-service moving company,” CEO David Greenberg tells TechCrunch. “We want to be the go-to place for Americans to conquer their move.”
The world that we live in is changing and what this means for product managers is that we need to find ways to change with it. One area that is undergoing dramatic changes is how we go about fixing dinner. It used to be that you and I would either eat out or we’d go to the grocery store, pick up some ingredients, and then come home and make a meal. However, that has all changed now. The arrival of companies that make meal kits have created a system where we now get the ingredients that we need to make dinner delivered to our house and then we just have to spend a few minutes whipping up a delicious meal. The challenge for the product managers at these meal kit companies is how to stay in business.
The Challenge Of Meal Kits
Creating a meal kit for time crunched consumers to use to make a quick and delicious home cooked dinner is a great business idea. In fact, it’s such a great idea that a number of different firms have jumped into this market. What that means for the product managers at these companies is that they now have a lot of competition to deal with. Where things can get even trickery is that that the business model for selling meal kits requires customers to sign up to a subscription service in order to get meals delivered to their house. A lot of people sign up, but then a lot of people also quickly cancel their subscriptions. It looks like it’s time for the meal kit product managers to make a change to their product development definition.
Over at the HelloFresh meal kit company, they have decided to take a different route. They are going to start to put their meal kits on supermarket shelves. The reason that they will be doing this is because their product managers believe that they need the retailers to increase their subscription business. Initially, the HelloFresh meal kits will be available on shelves at Giant Foods and Shop & Save stores. Other meal kit firms are doing the same thing. Blue Apron is selling its meal kits at Costco. Albertsons purchased the meal kit company Plated and is now offering their products on its shelves. Likewise, Kroger purchased meal kit company Home Chef and will be offering it’s meal kits along with their own in-house developed meal kits.
So why did HelloFresh decide to go the retail route? Their product managers believe that in the short term, subscriptions will continue to drive their sales. However, in order to acquire new customers, they believe that they need the help of the retailers. Their target customer is one who does not have the time or desire to pre-plan as much as perhaps they should. HelloFresh believes that their retail offerings will complement their subscription service offerings. HelloFresh is, of course, in discussions with other retailers to start to offer their meal kits in their stores.
The Strategy Going Forward
In the world of meal kits, it can be a real challenge to get new subscription customers and then keep them as customers. The people who study the meal kit market believe that the meal kit companies that will be successful in the long run are the ones who will be able to sell their products in stores in order to keep increasing sales. The belief is that a meal kit company has a much better chance of being profitable in a grocery store than they do by being a subscription only service.
It’s important to understand that in the world of meal kits, subscriptions are still the driving force behind sales. However, in store purchases grew by 27% last year and this generated US$155 million. All of this would look good on anyone’s product manager resume. What’s interesting is where the HelloFresh product managers decided to sell their meal kits. They chose Giant Good and Shop & Save because these two firms have a concentration of stores on the east coast of the United States. The consumers in this area are known to be the ones who seek out more convenient meals.
The market for meal kits is still relatively brand new. It’s growing fast, but nobody can claim to fully understand it. The retailers who are involved in meal kits are searching for the right partners in order to be successful. The HelloFresh product managers have done very well since the company first came to the U.S. in 2012. In one of its most recent quarters the company was able to report $215 million in sales and 1.2 million customers. Their closest competitor, Blue Apron, reported $197 million in sales and 786,000 customers. The HelloFresh product managers understand they they need to keep growing and evolving in order to remain a market leader. In order to make this happen, they recently purchased an organic meal kit maker called Green Chef.
What All Of This Means For You
In this crazy world of change that we all live in, how we make our dinners is yet one more thing that is undergoing change. The arrival of meal kits has changed how a fresh home cooked meal can be prepared. These subscription services allow people to receive kits that contain all of the necessary ingredients that will allow them to create a dinner meal. However, the market has become crowded and the product managers at the meal kit companies need to revisit their product manager job description and find ways to continue to be successful.
One of the biggest challenges of being a product manager at a meal kit company is that your business is a subscription business: people sign up and then they can drop their subscription. Over at the meal kit company HelloFresh they have decided to partner with the grocers Giant Foods and Shop & Save and put their meal kits on their retail shelves. The reason that they decided to this is to attract new customers and to complement their subscription service. It is believed that meal kit companies are going to have to be partnering with retailers in order to be successful in the future. In store purchases of meal kits is a growing market. HelloFresh has decided to partner with East Coast retailers because they believe that their customers are the ones who will most likely purchase meal kits. HelloFresh is doing well as a company; however, in order to continue to grow they have purchased and organic meal kit company.
It appears as though the meal kit companies have tapped into an under served market need. However, since this business is relatively easy to get into, there are now a lot of competitors in this area. The HelloFresh product managers appear to be doing the right thing in partnering with grocery retailers. In order to be successful in the long term, they are going to have to partner with more retailers and offer them a diverse set of meal kits. Let’s see what shows up for supper in the future!
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
Every product manager wants to be in charge of a product that customers want. However, it turns out that some of us have to deal with situations in which our customers want what we have, but they are also afraid to give us what we need in order to deliver our product to them. A great example of this happening in the health care market. Customers are very aware of the data privacy issues and so they are hesitant to use the health care products that the product managers are providing them with.
Product managers know that making our customers fall in love with our stores, our staff, and our brand is a critical part of our ability to be successful. This is why over the past few years there has been a big push by product managers to find ways to pamper our customers. With the arrival of the Covid-19 pandemic, we now have to take a step back, change our product development definition, and find ways to keep our staff safe while still trying to connect with our customers.
The Wegmans Product Management Problem
A good example of what I’m talking about is going on over at Wegmans. Wegmans became a well-known grocery store chains by pampering its customers with lots of cooking demonstrations, restaurants and movie nights. Now their product managers have to view every customer as a potential risk to their staff. The store’s food bars, which sell everything from pizza to sushi, had to be closed. Its free samples are gone. It has removed varieties of pasta sauce, yogurt and butter as instead Wegmans loaded up on basic staples. Its stores now feature plexiglass dividers at cash registers and more security guards to make customers behave themselves.
The problem that Wegman’s is facing is not unique to them. It’s a core problem for many businesses that constructed a culture around indulging the customer. Walt Disney Co., known for taking care of its customers at its theme parks with an extreme attention to cleanliness and order, plans to reopen Disney World with mandatory temperature screenings, a “social-distancing squad” that will encourage visitors to stay 6 feet apart and no meet-and-greets with favorite Disney characters. On the other hand, Nordstrom Inc., a department-store chain famous for its personal styling, is warning customers that specialized services like alterations, skin care and beauty makeovers may be unavailable as it reopens certain locations.
The businesses that might have an easier time of this transition are those that refrained from overpampering when times were good. Warehouse style retailers like Costco Wholesale Corp. and Home Depot Inc. long ago designed their stores to be more utilitarian. Before the pandemic started Wegmans had one of the strongest customer followings of any supermarket in the country. Its most loyal shoppers turned up for store openings. It generates nearly $10 billion in annual sales and employs 52,000 employees.
How To Treat Customers Well While Holding Them At A Distance
Product managers saw that their loyalty among customers and workers was tested as the pandemic spread. At Wegmans this culminated in shoppers buying loads of nonperishable foods and household products, clearing the shelves while fresh food sections remained quiet. Wegmans executives realized then that the grocer would have to reorganize its business – immediately. The company closed the large on-site restaurants which comprise roughly 10% of its sales. In-house chefs have been redeployed to work registers, run sanitation and manage carts in parking lots. Seafood departments stopped displaying fish on ice and deli counters stopped slicing deli meats to order.
Wegmans lowered the number of shoppers and workers in its stores to a 15-20% capacity. It also introduced job-protected voluntary leave to part-time and full-time employees at stores and warehouses. Customers were required to wear masks, and stores closed their doors if lines at checkout went more than two deep. To ensure distancing between customers and cashiers, Wegmans taped indicators throughout stores and placed plexiglass dividers at cash registers.
Wegmans also made several moves to get products to its stores faster. As customers panic-bought canned goods, pasta, paper and cleaning products in March, the grocer sent trucks more frequently to its warehouses and the trucks left 70% filled rather than the typical 90%. Instead of receiving packaged chicken cuts ready to be sold, Wegmans took loose chicken pieces and wrapped them in the store to speed up the movement of supplies. Restaurant suppliers saw their orders vanish as restaurants closed, and Wegmans saw an opportunity to move those bulk products directly to consumers who were stockpiling at home. The grocer began selling bulk-sized items like 10-pound bags of pasta and restaurant-sized quantities of frozen vegetables, rice and tuna.
The product managers are learning that shoppers will accept fewer options and they are thinking carefully about the level of assortment they will need in the future. Product managers see long-term opportunities with prepared family meals, as people cook more lunches and dinners at home. If they can get this right it will end up looking good on their product manager resume. Wegmans will focus on affordability and ways to bring services online. The grocer continues to add more room on its floors by removing displays or making them smaller. New customer behavior is materializing, too, as shoppers visit stores less but buy more. Saturday and Sunday were historically Wegmans’s busiest days; traffic is now more evenly distributed throughout the week.
What All Of This Means For You
In order to better serve their customers, product managers have been working very hard to develop close relationships with their customers. The good news is that we have been very successful at doing this. However, the Covid-19 pandemic has changed everything. All of sudden we need to view our customers as being a potential threat to both our employees and to other customers. This was never on anyone’s product manager job description. How are product managers going to maintain their relationships with customers when they have to keep them at a distance?
A good example of the product managers who find themselves in this situation can be found at the grocery story Wegmans. This was a store that did a lot for their customers with cooking demos and food bars. Now all of that has had to be taken away. Other companies such as Walt Disney and Nordstroms are facing the same problems. Interestingly enough, the companies where the product managers didn’t focus on taking care of their customers may do better during the pandemic. When the pandemic hit, the product managers at Wegmans took immediate action and repurposed workers and stopped doing a number of things. Wegmans has also reduced the number of shoppers in their stores and they have changed the products that they offer to better meet the pandemic needs of their customers.
Times have changed. What product managers used to be doing, developing close ties to their customers, was working. The pandemic has turned everything on its head and now we need to come up with a new game plan. Product managers need to find ways to keep their staff safe while still inviting their customers to still shop at their stores. This can be done, we just need to find the right way to go about doing it.
So what’s up with your customers? Why are they so touchy? It sure seems like customers can very quickly become upset about something that wasn’t covered in your product development, definition and then fly off the handle and be in the streets waving signs and talking with television stations about how bad you are all in the space of a couple of hours. It has become clear that we product managers are now living in a different age and time than we used to. What we need to learn how to do is to deal with customers who have for some reason become very, very angry with either our product or our company. When this happens, just exactly what is a product manager supposed to do?
Let’s face it: the Covid-19 virus has changed just about everything in our lives. Product managers for liquor have seen a dramatic change in their lives as bars and restaurants have had to close down. Customers who might have drunk their products at home have all been quarantined. As you can well imagine, this has been a big setback and the plans that these product managers might have had for the rest of the year have had to be shelved and new plans are quickly being put together.
What Drinkers Are Doing
Even before the virus struck, liquor product managers were struggling with a big problem. A new generation of consumers are drinking far less than their parents did. Now what product managers are starting to see is that their customers are starting to order their alcohol online and their consumer behavior may be forever changed. In order to keep things going, liquor product managers are looking at their product development definition in order create improved marketing, lower-alcohol cocktails and performing new experiments to make drinking at home more convenient.
Alcohol product managers have to get creative. Going forward they are going to have to put money toward reaching out to people within the digital space. This means getting more people on Instagram, on Facebook and on YouTube. As things have changed, product managers are seeing even more online purchases now that people are calling for groceries to be delivered home, including ingredients for cocktails.
How people buy their alcohol has been changing. The product managers are seeing a huge spike in the sales in the liquor stores, the grocery stores, Kroger, Costco, those kinds of outlets. Customers have been stocking up in anticipation of the long term. They have also been seeing similar trends around the globe. While restaurants have closed down, the grocers, the liquor stores are seeing huge spikes in sales. What people buy is also changing. In the U.S., people are moving to very cheap products or to very expensive products. The midprice products are getting a beating.
The Plan Going Forward
Product managers are very aware that younger customers are drinking less than their parents and grandparents. The reason for this is because ten years ago you had the youth drinking to get drunk. Product managers are not seeing that anymore. Instead, they are seeing people being in control. Their customers want to have drinks that provide them with the taste, but they’re very conscious about the calories. Product managers who can come up with a solution to this problem will have something to add to their product manager resume.
Going forward product managers are going to be creating a certain portion of spirits going into low or no alcohol. They will also be addressing the needs of a trend of consumers wanting to drink better and drink more premium. How customers choose to consume their alcohol is also changing. Previously if you went across the world, you would see a lot of alcohol being consumed in nightclubs, high energy, high music. That is now on the decrease. Product managers are seeing people drink at restaurants and bars that provide an all-around experience.
In the future, things will be different. In the short run, customers will be wary and not go out. But in the long run, human beings are great at forgetting the past. It’s a part of healing process. Product managers have no doubt that music festivals will come back and people will be going back to restaurants and dining. The growth in ecommerce is going to change things, but it will not make stores go away. Customers like to walk around the store, touch and feel different products, read the back labels and ingredients of different products. That will always happen.
What All Of This Means For You
The arrival of Covid-19 has completely transformed the spirits industry. People used to go out to restaurants and bars and drink. Now that everyone is staying at home and the restaurants and bars have been closed down, this has had a big impact on the alcohol business. Product managers are going to have to adjust to the new world that they now find themselves in.
Liquor product managers have been dealing with the issue that younger drinkers don’t drink as much as their parents and grandparents used to. With the arrival of the virus, customers have switched to buying product online. In order to deal with changing customer needs, alcohol product managers are starting to experiment with different types of products. Customers have started to buy low cost and expensive products leaving mid-priced products on the shelves. Customers are drinking more responsibly. As the virus fears start to fade, product managers believe that people will start to go to restaurants and bars once again. Even with the rise in online shopping, liquor stores will not be going away.
There will always be a demand for liquor products. Product managers need to stay aware of what their customers changing needs are and use their product manager job description to come up with ways to meet these needs. If they can find ways to keep the products that customers want in their hands, then they’ll keep drinking them and buying more. Alcohol product managers need to find a way to get through the current times in order to prepare for things to return to normal in the future.
Product managers know that people are always concerned about their health. We worry about how much we weigh, what our blood pressure is, if we are pregnant, what our metabolism is, etc. From a product manager point-of-view what is good about all of this worry is that people are willing to buy products that will tell them how their bodies are doing. This demand for more personal information is driving new product development definitions and a new set of products is being created. However, along with products that monitor our customers comes a lot of tricky data privacy questions.
Online grocery delivery company Instacart is launching a prescription delivery service through a partnership with Costco as demand for online delivery continues to rise amid the COVID-19 pandemic.
The company said Thursday the delivery service is now available from nearly 200 Costco locations in Arizona, California, Delaware, Florida, Illinois, New York, Washington and Washington D.C. The service, which was initially piloted at several locations in Southern California and Washington, will expand nationally in the coming months, the company said.
Customers who use the online prescription service will receive a text message from their Costco pharmacy when their prescription is ready. The text will include a link with the option to schedule their prescription for delivery. Once the customer clicks the link, they will be redirected to Costco’s site. From here, customers can confirm their prescription and continue to add groceries and household goods to their Instacart Costco delivery order. The orders are delivered to customers in a sealed, tamper-proof bag to ensure customer safety and privacy.
Instacart is also offering contactless delivery for most medications. Instacart shoppers are able to scan a customer’s ID for verification without a signature on qualifying prescription orders. Customers are also able to schedule delivery up to one week in advance under the new service.
The new service was driven by demand in the wake of COVID-19, Instacart president Nilam Ganenthiran.
“For many people, we know that part of their grocery shopping experience goes beyond fresh produce, meat, seafood and pantry staples, and also includes getting much-needed medications,” said Ganenthiran.
Instacart has seen demand for its grocery service skyrocket as the COVID-19 pandemic spread. The company’s total order volume last week was 400% higher than the same week last year. Customers are spending more as well. The average customer basket size — meaning the total amount a customer spends on their order on Instacart — is more than 25% month-over-month, according to the company.
The increase in demand has prompted Instacart to expand its reach by adding nearly 150 new stores to its marketplace since March 1. It’s also adding workers to keep up with the increase in customers.
Instacart announced April 10 that it doubled its “Care” team, from 1,200 agents to 3,000 agents. These employees answer questions about how Instacart works as well as respond to delivery issues and other mishaps with orders.
The hiring news followed a strike in March organized by Instacart shoppers who demanded personal protective equipment, hazard pay, default tips and extended sick pay.
In the world of shopping in bulk, you have choices. Specifically, when you need a huge amount of toilet paper or paper towels, you can choose to go to either Sam’s Club or Costco. Where do you choose to go? If you are like most people, if you have a choice you generally choose go to Costco. It’s not clear why we make this choice. I suspect that one of the reasons is because Sam’s Club is so closely tied to Walmart that most of us really don’t want to go there. You would think that the Sam’s Club product managers would have a real challenge on their hands when they went to China. However, it turns out that was not a problem.
Sam’s Club Goes To China
In the U.S., Sam’s Club has had a rough time. What they would like to be able to do is to attract more of the higher-income customers that they would like to have. However, they have not been able to do this. Instead, those customers seem to head over to Costco when they want to do their bulk shopping. One of the big problems that Sam’s Club is dealing with is that when people think of Sam’s Club, they think of Walmart which is closely associated with budget-minded individuals.
Where things get interesting is when you take a look at China. China is the home to three of Sam’s Club’s top five world-wide performing stores. Clearly the China Sam’s Club product managers have been using the right product development definition. So how did the Sam’s Club product managers pull this off? In China the Sam’s Club stores have positioned themselves as providers of imported goods and high-quality foods. This is in contrast to the U.S. stores which are mainly known for having closeouts and bulk items. Something else that has helped Sam’s Club do well in China is that over there they are not facing the same competition that they are in the U.S.: Costco does not have stores in China.
In the U.S. the Sam’s Club stores just have not been able to attract the well-off shoppers who buy a lot of goods. Instead, these are the people who are helping to keep Costco running. Making things a bit more difficult for Sam’s Clubs is the fact that they are heavily concentrated in the U.S. Southeast. This is in contract to Costco which is is concentrated along the more affluent West coast. The Sam’s Club product managers learned from their U.S. experiences when they went to China. The Sam’s Club stores in China are located in some of the country’s most affluent and densely populated cities. Shoppers view the products offered by Sam’s Club as having guaranteed quality while normal Chinese products are not trustworthy. All of this can look very good on a product manager resume.
What’s Next For Sam’s In China
The Sam’s Clubs in China know exactly who they would like to be selling their goods to: affluent mothers. These are the types of shoppers who view Sam’s Clubs as providing imported products that they are not going to be able to get at Chinese stores. The Sam’s Club model is to get customers to sign up to be members. In China, 1.9 million people have gone to the effort to sign up in order to be able to shop at Sam’s Clubs. The Sam’s Club empire currently consists of 866 stores. Of these, 19 are located in China. Most of the members of Sam’s Club have joined up in the past 5 years. The reason that they joined was because Sam’s Club was able to add more stores and they were able to make what they were carrying appeal more to affluent women with young children.
The customer that Sam’s Club is going after is a mother who is between 35-40 years old. This customer is searching for better quality products and is concerned about both food safety and the quality of the food that they are buying. This type of customer is willing to pay for premium products; however, she is going to insist on getting value for what she purchases. The success that Sam’s Club has had in China needs to serve as a reminder for product managers. We need to take the time to tailor what brands and products we are offering our customers in order to meet the needs of specific groups of customers. In the case of Sam’s Clubs, the product managers have done and excellent job of segmenting the market, determining the right places to open stores, and being careful about who they want to market to.
The Sam’s Club product managers in China have been sharing what has been working for them with the Sam’s Club product managers in the U.S. What this means is that the U.S. stores are going to start to sharpen their focus. What the U.S. product managers have started to realize is that they have been trying to serve too many types of customers. Going forward the plan is to focus on suburban families with incomes between $75,000 and $125,000 per year. It turns out that this is the fastest growing segment of its membership. Although they don’t pose a threat in China right now, Costco has operated in Taiwan for over 20 years. At the same time, in China Sam’s Club is going to have to deal with online rivals. In order to deal with these challenges, the Sam’s Club product managers plan on doing more. They are going to double the number of Sam’s Clubs in China by 2020. Sam’s Clubs also plans on offering more of their products online. Sam’s Clubs did see their membership number slip last year when they doubled their membership fee. However, these numbers have recovered. One of the most important features of a successful Sam’s Club store that the product managers have discovered is ample parking.
What All Of This Means For You
When it’s time to load up on large quantities of items, here in the U.S. we have many choices about where we’d like to go. Sam’s Club is one of them, but there are other options that are often more attractive to us. It turns out that over in China, the Sam’s Clubs there are the attractive places that people want to go to when they want to load up. What have the Sam’s Club China product managers done to be so successful?
In the U.S., Sam’s Club has had difficulty attracting the high-end type of customer that they seek. Since Sam’s Club is so closely tied to Walmart stores people tend to think of Sam’s Club as just being another discount outlet. In China the Sam’s Club stores have positioned themselves as providers of imported goods and high-quality foods. Something else that is helping Sam’s Club to be successful in China is that they are not facing any competition from Costco over there. In the U.S. Sam’s Clubs struggle to attract the right type of customer because of where the stores are located. In China, the stores have been positioned in the largest cities with the greatest number of potential customers. The Sam’s Clubs in China know exactly who they would like to be selling their goods to: affluent mothers. Most of the members of the Sam’s Clubs in China have signed up in the past 5 years. The customer that Sam’s Club is going after is a mother who is between 35-40 years old. This should serve as a reminder to us product managers that we need to target our customers. In the U.S., Sam’s Clubs are going to start to tighten their focus on who they are selling to.
The Sam’s Clubs product managers in China have studied their product manager job description and done an excellent job. They have placed their stores close to their target customers and they have stocked the stores with the types of products that these customers want to buy. They have been lucky because they have not had much competition so far. As things start to heat up in China, these product managers are going to have to react and find ways to make Sam’s Club stores in China even more attractive to their customers.
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
Retail giants Amazon and Walmart really, really want to start selling a great deal in India. In fact, they are willing to spend billions to set up shop there. However, their success is not guaranteed. It turns out that they are going to be battling the countless number of mom-and-pop stores that are already there and these stores are not going away any time soon. How is this battle going to sort itself out?