Delivering Immediate Needs with Gopuff's Alina Bilger & Andy Berman

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Hi, everyone, and welcome to the CPG Guys podcast, I'm PVSB the Savory CPG guy. My domains of expertise revolve around digital shelf content, retail, customer data, insights, CRM and loyalty. And my co-host is the Sweet CPG guy is a subject matter expert at branding, direct to consumer unified commerce, retail media and marketplaces. Please join me in welcoming the man with the golden voice Sri. Sri, How are you doing today? More like the radio face. But Peter, pleasure doing this week over week with you and for our audience to know this is the first time he's called me the sweet KPG usually calls me the cool guy, the evil guy or the Yankees loser. Grump guy, don't forget grumpy. Grumpy. All right. Thank you for that Sri. And before we get to our guests, I want to remind our audience that all of our content we did a big series on e-commerce profitability. We had a women's leadership series where she and I were very pleased to be able to contribute eight thousand dollars to the Susan G. Komen Foundation, our Founders series from Q1 of this year. All of that is available for the very affordable price of zero three, and you can find it by just visiting CPG guys dot com. And while you're there, if you want to click on the link to our LinkedIn page and once you get there, click follow. That way you're going to be kept apprized of all the content that we're sharing. LinkedIn is our primary mechanism for doing that. We hope you'll join us there. We just crossed fifty two hundred followers. That's incredible from our perspective. We thank all of you for doing that, but we like you to be part of the community. It's a great way to to learn about all the stuff we're talking about. So on to the main event. Our guest today come from a rapidly growing instant needs company, if you're watching on video, you'll know that right now Sri and I are performing an homage to our guests today. We're talking about, of course, Gopuff. And they recently acquired BevMo. One hundred and sixty plus your neighborhood retailer of alcoholic beverages located on the West Coast. Boy, can't wait to dig in there. Gopuff started in the Philadelphia market delivering everyday essentials to households. They now service over 600 shourie six hundred and fifty U.S. cities out of two hundred and fifty distribution centers. Wow. Here to speak with us about the analytics behind the phenomenal growth of Gopuff and some of the great ways brands can partner with Gopuff to increase brand sales through their platform are Andy Berman, the VP of Media Sales and Operations, and Alina Bilger, head of Strategic Development. Andy, Alina, welcome to the podcast. How are you doing? We're great, thank you so much for having us, Peter and Sri. Excited to be here As you can see, is where we're where fan- boying Y'all's business with our t shirts. We're very happy to have you here today. We think this is tremendous and we're so excited to get in. Hey, Andy, our audience likes to research. They want to learn all about you while they're listening to you and they want to understand your business. Would you first let them know where they can find go pop on the Web and also on like app stores, and then would you kind of give us a brief overview of your business in your words? Yeah, for sure. So first of all, gopuff dot com is the easiest way to find us on the Web. And then, of course, on the App Store, in the Google Play store as well, which is where we certainly see the vast majority of our of our traffic and where the vast majority of the buying behavior takes place on mobile. A little bit about the business. We really view ourselves as category defining. We've carved out a niche that we call the instant needs category, and we've carved out a brand of commerce that we refer to as go commerce. And if you think about the instant needs category, it's it's exactly what it sounds like. It is everything from cleaning supplies to pet care to baby products, which are some of our fastest growing categories to alcohol, to sports drinks, to pain medication. If you can imagine that, you'd want it in under 20 minutes. We likely sell it or we will soon. I think what is interesting about this category and about the company more broadly is that this is a company that really grew up out of a first generation American immigrant pair of entrepreneurs who started the business while they were students at Drexel University. And from day one, this is a business that had an intense focus on fiscal responsibility, on profitability, and on putting the customer at the very center of what we do. And so even though the growth has been explosive over these past several years, we're still very, very grounded in those values. Wow. Thanks, Andy. That's a great overview of your business. We really appreciate it. Sri and I are anxious to get to the question. So why don't we just jump right in? I'm going to lead off and this one is going to go to Alina. So what were some of the customer needs or consumer needs that Gopuff was ideally trying to address with its business model? And why did you decide that you wanted to control the entire customer experience from browsing through, purchase all the way to fulfillment? So Gopoff was initially founded on the need for convenience, one of the lines that our founders love to say that I really love was they recognize while they were in college that the convenience store was no longer convenient. You have to get in. Your car had to go. Maybe it was sold out of what you wanted, maybe was far away, maybe didn't have a car and you just couldn't get those items. And so convenience was really at the center of what we did. And where we started was they said, OK, we need to drive convenience in a new manner. And that was really the need was what could people need at any point in time in that convenience? So it started with that, with targeting those C-store products so that the chips, the beverages, perhaps some other personal care items. But it really grew from there and as Andy just said, became more of this idea of instant needs. So convenience was one element of it. And that was all about saving people time, getting them what they need. But then instant needs kind of begin to evolve out of that was. All right. We're seeing that there's actually behavior shift, that it's not just about convenience, it's about getting people the products at any point in time that they could want or need. And so that evolution has really come into this ability to change consumer behavior, to give people a new way to think about getting the items that they want or need at any point in time if they can't leave the house, don't want to leave the house and kind of have that at their fingertips. And so a big, big piece of that was that vertical integration, as you mentioned, controlling it from browsing all the way to delivery by having that integration. We own all of our products. We're able to understand what's in stock. We're able to control our pack times, watch the delivery, make sure customers have someone that can call if something goes wrong, really have that whole end to end experience and then also capture the data across the board to understand where we can optimize where the demand lies and how we can continue to lean into that idea of those wants and needs further and further and continue to drive up that idea of convenience. Andy & Alina, first of all, welcome to the show. It's a pleasure to have you both. And I can also proudly claim that I've actually been to your headquarters about a year ago before the pandemic happened. That said Andy, this next one's for you. You know, looking through your background, you spent close to a decade long at Facebook building its audience network. And clearly you have a deep media background. What is and what is your go forward focus for Gopuff? Yeah, so, you know, as you said, I spent a decade at Facebook, and in that time I worked across a retail business, the CPG business there. And then also our audience network business, which is Facebook's programmatic arm. And my focus at GoPuff is actually bring together the best of all three of those experiences to craft what I believe can be one of the most powerful retail media offerings in the world. I think the market still remains largely confused and a lot of instances between the difference about the difference between marketplace businesses and true retail businesses. And if you are operating a marketplace business, what you are fundamentally doing is attempting to find margin within a transaction between a seller and a buyer without actually producing any margin on that product. Gopuff is in a remarkably unique situation within that landscape because as Alina spoke to and as we've mentioned a couple of times, we are a vertically integrated retailer and within that we have the ability to not only control the consumer experience, but also control a much different media experience than what you find in a lot of other places. And what that means is that we are able to both understand and optimize for lifetime value in ways that a lot of the other players in the space are not. And so my focus since joining Gopuff has been really kind of deeply understanding, attempting to deeply understand, I should say it's still early in this journey. What are those key drivers of lifetime value and what is it that makes the GOP's platform so sticky and so kind of drive so much loyalty among the consumers who come back to us over and over again? Within that, there are incredibly powerful stories to go and tell brands. And so my area of focus is one, understanding the stories that the data is telling us, and then two finding the right ways to amplify those stories into the marketplace so that the brands that are experiencing the most retail success on Gorpuff can also experience the most advertising success. I know that will get to this a little bit later, but one of the things that is so powerful about Gopuff is that we're capturing somebody at a moment when they've made a decision to purchase. And so browsing is highly intentional on our platform. And given that the opportunity to influence a purchase is very different than if you're capturing somebody who is higher in the funnel and not necessarily ready to buy. And that is really where I see the big opportunity from a media standpoint. Andy, you used a two word combination that she loves even more than "Yankees win ," and that's retail media. So let's let's double click a little bit. By the way Peter, it's also because the Yankees are not getting a lot of wins these days. Well, I was going to say sorry, but I didn't want I didn't want to rub salt into the wound. Peter is boasting about that every single day on Instagram. But our day will come. Yes. Keep hoping Sri, keep hope alive anyhow. Back to my question, Andy. I'd love to know how Gopuff is involving brands in creating a really compelling customer experience through your service. Yeah, so it's a great question and it's a really important one because, you know, the easy answer here would be, hey, we're capturing consumers at this incredibly valuable moment in time. And so we're just going to put a brand message in front of them. And that, quite frankly, would be a perfectly credible and easy way to build this business. And it is a part of our story, but it is not the entire story by a long shot. So one of the things that we're very focused on inside of Gopuff is an arm of our business called the Creative Studio. It's an in-house creative agency, and they are tasked specifically with creating bespoke experiences for brand partners that come alive, not only on Gopuff inside of our owned and operated app ecosystem, but also in a host of different physical environments that we own and operate. And so if you think about the Gopuff experience, it's very kind of easy and logical to think about it as the owned and operated app experience. But what that leaves out is that we have one hundred and sixty plus BevMo locations where we can go activate on behalf of a brand. And so our focus is really on tying together the physical store infrastructure and the digital experience on behalf of brands to create one unified Gopuff experience. I n terms of bringing to life great brand experiences, what we do is we attempt to focus on those really big brand moments. And so part of our best practice internally is really kind of understanding a brand's activation calendar throughout a year, understanding what those really big moments are, and then aligning that to some of Gopuff's big priorities. Let me crystallize that with an example. This year we're going to be launching in a host of new markets and those new market launches are only ever going to happen once. You know, we're only going to go live in Las Vegas, in New York City one time. As we do that, we're enrolling and enlisting brand partners to be a part of those launch platforms with us. And so, well, that obviously includes placement within our app ecosystem. It also includes a lot of physical out of home and retail activation as well. Alina, Peter and I have been trained over multiple decades in the CPG industry. That data and insights platforms is how we really shape consumer outcomes of experiences, innovation and things of that nature when a brand chooses to partner with you. What kind of insights can they expect back from you, especially as product moves through the platform and in return, what do you expect from brands when you choose to partner with the brand? And how do these come together? Yeah, I mean, I love this question, and I'm I come from the data and insights background, too, so this is a big passion of mine when it comes to the insights that Gopuff has, I mean, being vertically, vertically integrated, being a direct to consumer platform. We have a wealth of understanding about shopper behavior, shopper insights, product trends, product insights, the market and being Gopuff, being this instant needs delivery platform. It's not just about shopper insights, it's about understanding the demand moment when it's happening. I worked with a lot of CPGs in the past and one of the biggest questions I used to get in past lives was, well, what triggered the trip? What what happened between the need and when they got to the store? In this case, that need and the product in hand is such a short window. We actually deeply understand this moment of instant consumption, this idea of that craving. And so it's all of those insights that we deliver to our brands. It's understanding when products are being sold, who is buying them, what else they tend to purchase, what that frequency looks like, where they are. And we can form these these big stories around it. We can help brands understand that. You've got one shopper segment that tends to skew to the East Coast that has healthier carts but will eat unhealthy twice a week. And they like you, but they like your competitor more. You know, that's a lot of what our brands get. They get this narrative and they get the strategy. And then we build everything through Andy's team against that strategy. We understand this about them. When do when do we advertise to them? When do we market new products? How do we introduce them to things that we know they need based on their search terms, based on their cart behavior, and how do we make sure we can make that experience even stronger? And so as we work with brands, it's not just about getting data reports. It's not just about one-off insights. It's about this deeper shopper and product strategies that can help inform all of their decision making from their sales strategies all the way into innovation and R&D. What do consumers want? What are they reacting to and why? In exchange, what we look for from brands is what other information do they know? What did they know about their consumers in that retail space? What what patterns have they seen? What challenges are they seeing? And in some cases, how is that data different from our own? We've had instances of brands calling us saying these products are dropping in stores in brick and mortar, but they're flying on top of what's happening here. And again, the realization was this is an impulse product. This is a product that people want when they see it, but it's not top of mind. And suddenly that that created cascading strategy that completely affected how they thought about their business. And so getting that data back from brands is so, so helpful because we can really then make that three sixty strategy and even change of how we think about their products with customers. Alina, that's great, thank you for helping us understand the application of the insights in working with the brands. Now we're going to get to the question that I've been dying to get an answer for months since it occurred late last year, Gopuff decided to acquire a traditional brick and mortar alcohol beverage retailer on the West Coast. BevMo, we talked about that in our opener. Can you share with our audience what was kind of the strategic intent behind this acquisition and kind of what synergies do you think you're going to be able to offer the people who are using Gopuff? Yeah, absolutely. This was a really exciting move for Gopoff and and very kind of, I think, a little out of the box. It was surprising for a lot of people. And especially looking at BevMo, which is a leading specialty retailer, they have a big presence and a lot of their in-store is how they do that. They have a lot of delivery, a lot of in-store. And us being tech was a very interesting marriage. But, you know, acquiring gave us a really strategic and meaningful way for us to enter California. You know, it was a geography we were deeply interested in. We wanted to do it right and we wanted to really understand the customer base going there. And by acquiring BevMo, we were able to instantly hit 30 percent of California who was already within delivery range, and we could just expand from there. And so it was a very direct and efficient route to these new customers, to new geographies. And then for BevMo was actually providing a way to get their loyal customers, their depth of customers, a seamless delivery solution. And so, yeah, yeah. It was a really, really interesting system. And so now we're in the process of doing that integration of integrating our proprietary tech with a lot of their products, their trends. They have a wealth of knowledge of what people like, what they react to, and there's some synergies and there's some differences. And that's actually the best part that now we can kind of appeal to a much wider range. There are things that both Gopuff and BevMo customers like, and there are things only Gopuff customers like only BevMo, customers like. And we're being very, very deliberate and making sure we're building out strategies that appeal to that entire scale across the board. But it was really a phenomenal enabling tool. Let us get into a whole new space and they're a fantastic business. And so we're excited to really bring these two really customer focused companies together. What a great story Alina. That is tremendous, thank you for helping us walk through what the idea was behind this great combination and synergy of these two businesses. Alina, thank you for making Peter happy with your answer today and solving a mystery for him. Now, he would get off my back with that. That itch has been scratched! I feel so much better now. There we go. There we go. Andy, I want to go back into the world of media with you. And, you know, the larger the brand you continue to work with and there's so many in your ecosystem already, one of the things brands are really going to be interested in is how can I be found very quickly when people when consumers search for products? And the shortcut to that is search sponsored search conquesting, so many words come to mind. But Peter and I love this word the most of it all. It is a favorite topic here on the show, and we call it retail media. So how is Gopuff enabling this for brands? And where are you on the retail media journey? Can brands participate in retail media with you? Yeah, so let me address that question a couple of ways. The first answer is just a very direct one. Absolutely. Brands can participate with us and we are in market with a series of different products today. So obviously, sponsored search is a critical growth vector for the retail media space. And it is where between 60 and 80 percent of all retail media investment is headed that is equally critical for Gopuff and a recently launched product for us. In addition to sponsored search, we also offer paid product placement and we are exploring and that's paid product placement within the Gopuff owned and operated ecosystem. And we have a small but growing programmatic offering as well that allows us to take our our data and then reach our consumers across the open web and to do that using all sorts of different creative canvases. And so the surface that you appear on matters, but so does the creative canvas. And so the ability to target a television advertisement using go puff real time transaction data is an ability that we now have an ability to target IAB standard creative or native creative inside of other environments is an ability that we now have. And so over time we will we will have the capability to control for reach and frequency across these surfaces, have a deep understanding of what the optimum reach and frequency to trigger a sale and therefore to trigger an appropriate level of ROAS against a given campaign will look like. And that's something that we're on the one hand early in doing, but on the other hand, very rapidly developing and excited to in a matter of weeks launch in a much broader way than we already have. The other thing that I want to just sort of touch on vis a vis where we sit within the retail media journey, that is a little bit less product specific is just around this notion of kind of the evolution of the Internet and around digital consumption more broadly. And if you think about the kind of initial behaviors that you saw people engaging in online, it really started with browsing. Right? I mean, you remember these days where you'd actually open up a Web browser and browse the web, right? And then browsing evolved into search. And, you know, we all know who the really big player in searches. Right. And then search evolved into discovery. Right. Where things you are interested in were actually proactively push towards you. And I think one of the things that is so fascinating about Gopuff off in the way that we've gone to market is that we combine all three of those behaviors in our experience. Right. We are a place where users are where our customers actually are browsing selection because we do have so much local and bespoke selection. One just quick sidebar point on this is that, well, in the average MFC, we carry around thirty five hundred SKUs, nationally we have north of twenty thousand, which really speaks to the kind of number of regional and local brands that we engage with. So certainly browsing is a very common behavior on our platform. Search is also an incredibly common behavior on our platform. But then so is discovery. Right? So is that discovery of a local brand that maybe you'd heard of once but had never tried or that you'd never heard of but never tried? And we really view our platform is not just a growth vector for brands through paid advertising, which of course it is, but also a growth factor for brands from a discoverability standpoint. And so that's one of the things that I think is fairly differentiated around where we sit not just within the retail media space, but the e-commerce space more broadly. Andy, thank you for that level of detail, that's the kind of stuff we try to deliver to our audience on this podcast. It's very educational. And you basically told us it metaphorically how the sausage is made and that's what we want to do. So thank you very much for that. So knowing all of this. At a higher level, how do you counsel brands on investing with Gopuff to grow their businesses? Yeah, so, look, I think a lot of this comes down to first principles and advertising relies on on a few first principles, and I'll try to kind of capture them in a number of words, which is reach, frequency and creative. And what we know is that that human behavior can be heavily influenced through the appropriate mix of reach, frequency and creative. And if you talk to any one of the big brands, whether it's a PepsiCo or Mondelz, a Nestl, a Coke, any of them, what they will tell you is that this is ultimately a reach game because all of them rely on not just reaching their existing consumers, but also reaching that next cohort of consumers. And if you talk to smaller brands, Challenger brands or even local brands reaches that much more important to them. The numbers might be smaller, but the nature of what they need to do, the job to be done fundamentally is reaching people who could be interested in their product. And so when I counsel brands, what I talk about is the uniqueness of the Gopuff audience and just how hard it is to reach them in any other environment. And what we have found is that we're growing so rapidly with a cohort of consumers that does not have deep loyalty to linear television, that does not have deep loyalty to particular media channels outside of really the biggest of the big, but in those really large media channels. And of course, I'm talking about kind of the Facebook, the Instagram, the snaps of the world, you can't drive a purchase. Right. And so if you want to reach people in an environment where you can not only deliver a really compelling brand message, but capture them at a moment when you can influence the purchase they're going to make, we're capturing a remarkably valuable audience at a remarkably valuable moment in time. And then within that, you wrap that in this incredible growth story. And so if you look at Gopuff three years ago, it was tiny. If you look at it, a year ago, it was bigger. And if you look at it today, it's now really big, right? You start folding BevMo into that story. You start folding the opening of north of of one micro fulfillment center every single day. And you start projecting this out three, six, nine months into the future and you have a behemoth on your hands inside of another nine months. And so what brands are really doing when they invest in us today is that they are investing in future growth. And so flexing those muscles now, training those muscles now and being there early means that they won't have to play catch up when the dream is fully realized. And that's a compelling place not just for the big guys, but for the small guys too. Three years ago, it was tiny. Years ago it was bigger and now it's really big. Brandee So when I'd like to go next, Alina. And the last question for this episode is when you really big now, what's next for you or what are those strategic imperatives that you are pursuing to grow Gopuff as well as to continue to deliver this amazing convenience model for customers in your platform? Yeah, absolutely, I mean, as Andy said, as we get bigger, that gives us some freedoms to really start to stretch those walls. And as we continue to to evolve what we deliver to our customers from that product standpoint, we're also really starting to explore what other what other lands are out there, how we can start to to give customers different kinds of things again that they would need in that on-demand platform and disrupt perhaps a less convenient process. And then we are, as there's been different rumors, different articles sent about what's next in terms of our expansion and nothing is really off the table. While, today we are we are in the United States. Our eyes are looking around everywhere. We're trying to understand what other competitive markets to go into. We're trying to understand where else the opportunities lie, what other pockets of customers outside of just the United States we could be servicing and how that happens, what that looks like. And so really, as we think about our imperatives, it's all about continuing to evolve that core, but also introducing new business units that are letting us push the limits of how we do things today and not just, again, not just in the States, but across the world. And what does that look like from a product standpoint? From a services standpoint and from a partnership standpoint? How can we use our logistics networks in different ways? How can we partner with celebrities in different ways? We have a phenomenal partnership with Chris Paul right now. But what we're really thinking about everything from products all the way to different charitable organizations and everything in between. And so nothing is off the table. One of the best parts about Gopoff and this really comes top down from our founders is a willingness to try anything, to not necessarily accept status quo, to not be safe and to disrupt anything that could be disrupted. And so that attitude remains today, no matter how big we get. And as we think about those imperatives, it's all about what do customers want and then how does Gopuff go deliver it, not what do we think we can do. But let's just make anything happen. Congratulations on all the growth. Thank you. To remind our audience that all of our content today, as I mentioned to you earlier, just go to CPG guys dot com, it's all there for free. You can get audio, podcasts, video. You can get a list of our favorite podcasts that we listen to. And we're not listening to ourselves talk. You can find all that by going to CBG guys dot com. And we're also an audience driven platform in so far as we want your feedback to help determine what guests like the great ones we had today from Gopugg to invite on to the podcast. And one of the topics we pursue, the best way to do that is just go to rate this podcast, dot com slash CPG guys, leave a review there. You can also leave a rating. What's my favorite number? Think it's fun. It's five, but it's up to you. Right. Leave whatever you want, but seriously, leave a review because that's how we learn from you. So. We're going to put in the digital liner notes of this podcast, links to obviously go. And to your placement on the App Store and Google Play store. But I want to thank both Alina and Andy for joining us today. Thank you so much. This was this knocked my socks off. This was a really great episode. You answered all our questions directly. We got some great understanding education for our audience. The last question I'll just ask you before I before I ask you to say goodbye to us: I'd sure love to know and where we can direct brands to if they're not already engaged with you on this. Because, Andy, you shared with us a lot of great ways they're doing it. How can brands get more engaged with you? So we are we are in the process of launching an advertiser hub. It will be live very soon. But if anybody is interested in engaging directly with us, I'm going to just offer up my personal email. And it's just andy.berman@gopuff.com. Feel free to reach out. We are very much open for business and all of the advertisers with us web linking will be live quite soon. All right. We'll put a link to that. But thank you. Thank you, Elaine. And thank you, Andy, for joining us today. Thanks for having us. Sri, just a run of the mill episode, right? Nothing really exciting going on here today. Ha ha ha. One more time, we've got the fanboy stuff going on. Our fan going all over it. Thank you so much. There's a great episode. You bet. Your bottom dollar. All right, and to our audience, we are really appreciative that you join us for all of these episodes where we're well into we're closing in on 100 episodes. Hard to believe we just launched this last year and we're almost there. But this is a great journey for us. We're thankful that you're on it with us. And we look forward to you joining us on the next episode of the CPG Guys podcast. Thanks. Goodbye.