I Was Wrong
Last month, we talked about the grocery stores. And how a new wave of technology will revolutionize how we buy items.
I then stated that “deliverable groceries are dead.”
And I’ll admit it: I was wrong.
But it took a global pandemic to show me how wrong I was.
Today’s life is extremely strange and nothing like it was a month ago. Millions in the U.S. have isolated themselves. And they’re relying on takeout and meal/grocery delivery services to avoid contact with the coronavirus.
Let’s look at Blue Apron (NYSE: APRN) again — the poster child of a failing grocery delivery market.
When we last checked in with Blue Apron, their business was suffering immensely. Problems included supply chain problems, a dwindling subscriber base and the inability to innovate their business model.
Since then, lo and behold, they’ve found their niche — all they needed was a global pandemic to isolate millions of Americans in their homes.
And Blue Apron’s stock has skyrocketed from its lows of around $2. At one point it went up over 1,000% off the low price before cratering back down to stabilize at around $10.
The question is can they use this boost in funding to actually innovate their product?
The exposure Blue Apron got is definitely positive. But is it enough to keep subscribers on after things return to normal?
Furthermore, the previous supply chain issues won’t magically solve themselves overnight. They’ll need to find ways to both cut costs and innovate at the same time.
Now, while I’m not being paid to advise them on what to do… I might have ideas on how they can turn things around when this whole thing blows over.
How to Innovate Your Dying Business
First, Blue Apron, think of this as a love letter.
Your product is good, but it’s obviously lacking something.
First, let’s take what you have going for you and try to apply that to other parts of the business.
You’ve proudly stated that your warehouse is at the cutting edge of technology. And that it’s automated to cut down the costs of preparing meal kits.
Why not apply that to delivery as well?
Already, there are companies that are shining while delivering for essential businesses.
For self-driving cars, there’s Nuro — a self-driving startup that entered a partnership with Kroger.
You may remember from last month’s article that Kroger is trying to cut costs by adopting a cashierless grocery store. Now they’re pairing up with Nuro in Houston to cut costs even further.
And not having to pay people to drive the vehicles is a huge cost saved.
Uber, for instance, the multibillion dollar taxi service, pays hundreds of millions of dollars every year on driver incentives and pay.
A self-driving car needs no incentive or extra pay to do its job. Kroger knows this. Blue Apron should get to know it too.
The second thing Blue Apron needs to do is innovate their product. Yes, people are subscribing now, but when the pandemic well dries up, what’s left?
Trends showed that people were less likely to want a meal-kit during normal times. But if there were some way to deliver a fresh, hot meal to someone’s door, that could be game changing.
Develop the idea, work out the kinks and pitch it to someone that can help you scale it.
You’ve been given this opportunity to restart your business. Use it.
To a bright future,