Boxed - disrupting the club channel

© 2014 The Partnering Group, Inc. |

8170 Corporate Park Drive, Suite 310 Cincinnati, OH 45242 Phone 513-469-6840 | www.thepartneringgroup.com | © 2014 The Partnering Group, Inc.

Boxed Mobile App

Shopper Experience

The Partnering Group


Boxed– How It Works

Boxed is the mobile reincarnation of Costco, Sam’s Club, and BJ’s without the membership feeds.


Boxed- Business Model • Unlike Costco, which might have 4,000 or 5,000 items in its stores, Boxed

keeps about 500 SKUs available for users in its own warehouse

• Boxed is taking the contrarian approach (vs. Instacart and Google Shopping Express) and actually holding inventory and fulfilling shipments from its own facility.

• Free two-day shipping for orders of $75 or more.

• Boxed believes it can also save its customers time. The average warehouse club trip lasts 100-180 minutes on average, while an order from its mobile app can be placed in a fraction of that time.


Boxed- Benefits


Boxed Shopper Experience

Facebook Advertising to drive app downloads

In App browsing experience – Grocery Category

In App browsing experience – Household Category


Boxed Shopper Experience

In App browsing experience – product details

Check Out Basket – Order Summary

• Total Basket = $72.45

• Boxed does NOT require a membership

• Free shipping provided with order over $75


Competitive Analysis


Competitive Analysis – Club Stores

Total Basket* = $62.98 2013 Sales = $74.7B Store Count = 447

Total Basket = $62.98 2013 Sales = $13.0B Store Count = 201

Total Basket = $61.70 2013 Sales = $57.2B Store Count = 632

* Surveys conducted via Mobee mobile app


Competitive Analysis - Instacart • Total Basket = $74.45

• Instacart personal shoppers buy within

Costco

• Instacart does NOT require a Costco membership

• Instacart provides free shipping with a yearly membership ($99/yr.) and a minimum order of $30

• Delivery typically within 2-4 hours is possible depending on when order is made


Competitive Analysis – Google Shopping Express • Total Basket = $55.93 across 2 different retailers

• Note: GSE did not have any Tide Pods from Costco

so the order was split across Costco and Smart & Final

• Current promotion with GSE provides free shipping for 6 months

• GSE requires a Costco membership unique to the shopper; shoppers have gamed this with dummy Costco membership numbers

• No minimum order size with current promotion

• Delivery occurs within a 12hr. window typically within same 24 hours depending on when order is made


Competitive Analysis - Amazon

• Total Basket = $91.42

• Note: This included Tide Pods which was a lower count (90 vs. 120) so the price variance is even larger than reported.

• Free Shipping enabled by Amazon Prime ($99/yr.)

• No minimum order size

• 5% discount for certain products if you sign up for continuous replenishment


Implications • Costco continues to be the gold standard for their ability to merchandise and create “treasure hunt”

experiences. Crowded stores, parking lots, long lines, etc. will cause shoppers to adopt mobile solutions like Boxed but how many is still yet to be determined.

• Mobile experiences are relatively easy to navigate for shoppers no matter the application. There is little variance and no one stands out at this point.

• Retail fundamentals like merchandising, pricing, promotions, in stocks, and search are the basic requirements. Delivery terms, annual memberships, free shipping, and minimum orders are where the current players are differentiating themselves as they build their loyal shoppers.

• No one is leading on new items. Brands have an opportunity to better influence this opportunity to differentiate themselves.

• Brands must improve their content management systems to provide the most robust and compelling content in an easy manner for mobile and online retailers. Making it easy (via APIs and easy content management systems) for retailers will become a short term competitive advantage for smart brands.

• Pricing has greater variance than one would have assumed initially. Google Shopping had lowest prices ($56). Traditional Club Stores were next $61-63. Instacart and Boxed were ten dollars higher at $72-75. And Amazon was surprisingly the highest at $90+ at this point in time. But pricing is very fluid and yearly memberships were not considered.


8170 Corporate Park Drive, Suite 310 Cincinnati, OH 45242 Phone 513-469-6840 | www.thepartneringgroup.com | © 2014 The Partnering Group, Inc.

Any Questions?

Sonny Jandial [email protected]

Boxed - disrupting the club channel

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