retail news in context, analysis with attitude

The Associated Press has an interview with Boxed co-founder and CEO Chieh Huang, who has created a business that allows users to order bulk products similar to those they'd buy at a warehouse store, get two-day delivery (free for orders over $49, which virtually all are), and avoid the lines and inconvenience they might find at Costco or Sam's Club.

"We are not the everything store," he tells the AP. "There are so many folks trying to be the everything store ... trying to be Amazon. We want nothing to do with that. Amazon is still a great service, but they don't service the folks that want to stock up well. It's 1,500 (items). It started off as 200. We won't carry every brand. But the brands we carry and the items we carry we have a commitment to the customer. We need to be very competitive. Online, it will be a price leader or very, very competitive online. The consumer orders on average 10 items from us per shop. When you take that basket as a whole, it will be the cheapest basket."
KC's View:
The story makes the point that "only 2 percent of the approximately $200 billion U.S. warehouse club business is now done online," which means that Boxed seems to have identified a big hole to fill. Plus, "about 80 percent of Boxed customers are age 25-44," whereas Huang says "60 percent of traditional warehouse store shoppers are boomers."

Huang also says something else that I totally agree with - that "the shift to online is accelerating as time is going. And that makes me feel very bullish. I would also imagine that scares a ton of retailers today. This is not one of the things that the worst is past and it is starting to wane. But as the dollar amount gets bigger online, the growth is accelerating. And so last year was probably the tipping point, and the tipping point for grocery and (consumer product goods) is probably 12 months away from that."