Three news items caught my attention earlier this week. In case you missed them, here’s my quick take on each.
We’ve discussed the challenges Staples and its peers face in a world where office supplies are ordered instantly via Amazon and delivered within hours. Staples is using its physical footprint to offer a better sense of community in the face of such stiff digital competition.
The new concept, called Staples Connect, debuts this week in the Boston area. The new concept is about transforming Staples locations into much more than a place to purchase a box of paper clips. Instead, the company is trying to create a space that offers customer-focused solutions and experiences.
Part of the newly designed stores include a 500-sq.-ft. community space where customers can connect and learn by hosting or attending events. Additionally, Staples has partnered with iHeartRadio (whose CEO Bob Pittman is speaking at Localogy 20/20) to offer dedicated podcast studios. The podcasting spaces feature soundproof rooms with professional equipment. The studios can fit up to four people, with a dedicated in-house specialist available to assist.
In 2018 Office Depot quietly launched co-working space to compete the likes of WeWork. It’s easy to imagine mixing the Staples approach with the Office Depot approach to create a formidable option for small business professionals to connect and build community. In a related note, we’ve written about a trend away from dedicated co-working space toward more mixed-use co-working, where gyms, hotels, and retail locations offer co-working as a feature.
Kabbage Offers SMBs Short-Term Green
Earlier this week, fintech startup Kabbage (which has raised almost $1 billion) introduced a new offer giving Kabbage Payments customers more control over short-term funding needs. There’s plenty of data out there showing cash flow is the primary day-to-day challenge facing small business owners.
According to Kabbage CEO Rob Frohwein, “As a former small business owner, I know managing cash flow is a major headache. We designed our custom loan product to recognize these inherent challenges provide our customers with even more flexible funding to better manage their businesses.”
Localogy will publish the next wave of its Modern Commerce Monitor™ in the coming weeks. We expect to see new insights on how local, independent and small businesses are accelerating their shift to SaaS solutions.
Digital, Loyalty Drive Chipotle’s Rise
Finally, Chipotle reported a 78% rise in digital sales. Now, digital accounts for almost 20% of the company’s top-line revenue. Digital is driving the success of the high flying quick-service restaurant. Two years ago Chipotle was trading at $254 per share. This week it was $860. And Chipotle’s market cap has jumped from around $7 billion to almost $25 billion.
In my view, there are two keys to Chipotle’s prolific rise. One is its deep attention to its digital platform. The other is its focus on customer loyalty. The company says about 8.5 million of its customers are on the loyalty platform.
Chipotle’s CEO, Brian Niccol said the restaurant’s designs have helped the company evolve its mobile pickup shelves into an integrated digital pickup portal. The word digital is plastered all over the earning release.
It’s no surprise we’re seeing money pour into companies like Toast and Slicelife. These companies and others like them are building technology to help independent restaurant operators compete with the likes of Chipotle and Dominos. These big brands are investing billions in technology that makes their customer experiences more immediate, transparent and authentic across thousands of locations.