Can Rivals Take Advantage of Amazon’s Pandemic Woes?

From The Wall Street Journal:

When coronavirus lockdowns sent Americans into a frenzy of panic buying, the bad news came almost as quickly as the good for online organic grocer Thrive Market.

In March, the company that aims to compete with Amazon.com Inc. in the health-food sector suddenly found customers flocking to its site as its giant rival struggled to handle its own pandemic business surge. Thrive notched record sales and membership sign-ups.

Then it buckled. Orders ballooned to five times what Thrive could handle. Delivery times for some customers reached two weeks. About 30% of items were out of stock on some days. To keep delivery times from slipping further, Thrive made the previously unimaginable decision to throttle demand by limiting shopping hours.

“It was excruciating,” recalled co-founder and Chief Executive Nick Green. “It felt like a pick-your-poison moment.”

Thrive Market, based in Los Angeles, is one of a host of retailers that have spent years trying to compete against the Amazon retail juggernaut. The coronavirus pandemic provided a fleeting window of opportunity. Amazon, overwhelmed by a wave of orders, temporarily reoriented its business toward essential items, leading consumers to begin looking elsewhere.

But capturing that opportunity—and trying to ensure it is more than a temporary blip—brought extraordinary challenges for Thrive and others, demonstrating the difficulty of competing with even a weakened Amazon.

. . . .

The pandemic has accelerated the shift to online shopping and devastated traditional retailers, including Neiman Marcus Group Inc. and J.Crew Group Inc., which have filed for bankruptcy protection. Financial-services firm UBS Group AG recently predicted the percentage of groceries sold online will rise from 3% this year to 15% by 2025.

. . . .

Mr. Green calls Thrive the “un-Amazon” because, he says, it offers a curated selection of merchandise. Early on, many reluctant investors had the same question: How would it compete with Amazon or Whole Foods Market?

Mr. Green was betting that consumers would try it out for its carefully selected inventory and competitive prices and stick around because they feel good about shopping there. He also billed the company as socially conscious by adhering to such practices as not offering genetically modified products.

Thrive, which is privately held, eventually raised more than $160 million. It now has more than 800,000 members who pay $60 a year. Although Thrive doesn’t disclose sales, Mr. Green said they were in the hundreds of millions of dollars annually.

On March 11, Mr. Green was preparing to leave work when he glanced at a computer monitor showing the company’s financial metrics. That day’s revenue line shot up like the handle of a hockey stick.

He messaged an executive to make sure there wasn’t a bug in the system. There wasn’t. Checking CNN’s website, he learned the World Health Organization had declared the coronavirus a pandemic. People were buying in a panic.

. . . .

Days later, the country shifted into lockdown mode. Within a week, Amazon was struggling to meet orders promptly. On March 17, it said it was prioritizing the shipments of medical supplies, household staples and other high-demand products. Toilet paper and many cleaning supplies became unavailable, and shipping was taking weeks for some products. Amazon retooled its website to encourage shoppers to buy fewer items.

A survey by investment bank Jefferies Group LLC showed that almost one-third of respondents said they turned to non-Amazon sites during the pandemic because of delivery and inventory problems.

At Thrive, new paid membership sign-ups in March and April were up threefold from the prior year. But the same problems that plagued Amazon ravaged Thrive. Customers rushed to buy cleaning supplies, canned food and other essentials. A six-month supply of toilet paper ran out in three days. Mr. Green wasn’t sure how quickly the company could address the backlog.

Earlier in March, Chief Financial Officer Karen Cate had asked Thrive’s supply-chain director to order five times the usual amount of canned goods and cleaning supplies. She left out toilet paper. “If I could go back, I would change that one,” she said.

. . . .

To some, limiting online store hours seemed a sensible middle ground. Ms. Cate, the CFO, was skeptical. She said she felt Thrive could gain control of its order backlog without limiting members to ordering during working hours. She worried that members who worked during the day—including her daughter, a nurse at a hospital in Pasadena, Calif.—would be shut out.

She relented after seeing internal metrics that showed delivery times would only increase. “OK, I surrender,” she recalled thinking.

On a midnight call, Mr. Green and co-founder and Chief Technology Officer Sasha Siddhartha decided to move forward with limiting the hours. They told other executives the next day and instituted the new policies on March 25.

. . . .

The stress mounted for Mr. Green, whose wife had just given birth to their second child. He was getting a handful of hours of sleep per night and didn’t shave for a month. He stopped working out. Outside of work hours, his time was consumed by his newborn son and late-night emails and calls with executives.

It was difficult to concentrate from his setup in the family’s guest bedroom. He took two monitors and his MacBook Pro and set up an office in his closet, placing the equipment on shelves near his T-shirts and jeans. He scrapped a strategic plan and built a new one, staying up one night until 3 a.m. to finish it. The plan re-examined hiring goals and when the company should expand its fulfillment network, among other things, to ramp up faster.

. . . .

Holding on to customers became harder as Thrive struggled to handle the order influx. Online, customers were threatening to leave over the delays. Members were frustrated and questioned why Thrive was taking on new customers.

. . . .

By early April, Thrive Market was hiring as many as 30 warehouse workers a day. Using several recruiting agencies, it hired more than 300 warehouse workers in less than two months, adding to the roughly 500 it had. Labor costs jumped 20%.

The company also removed nonessential items such as water bottles and yoga mats from its website to concentrate on delivering essentials like food and cleaning supplies. It tinkered with its fulfillment processes, processing orders for high-demand products in one section of warehouses. It prioritized orders with the longest delivery times. It stopped selling low-demand items in the back of the warehouses, partly so workers wouldn’t have to waste time fetching them.

. . . .

Higher costs have reduced the percentage of profit made on orders, Mr. Green said. And the store has had to dip into its cash reserves to pay for a spike in inventory expenses. But the year’s revenue projections have risen, and the company is in a strong cash position, he said, although he declined to provide details.

Thrive’s goal to reach profitability by the end of 2022 hasn’t changed, he said. “With our growth accelerated,” he said, “we expect to get profitable even faster.”

. . . .

The lessons from the pandemic have changed its fulfillment processes. Mr. Green said the company will hold 20% more inventory and will work with a larger number of suppliers. Its technology team plans to roll out improved recommendation functions on the website for when items are out of stock.

Link to the rest at The Wall Street Journal (sorry if you run into a paywall)

PG has a soft spot for scrappy young tech startups and was heartened by the apparent survival of Thrive as depicted in the OP. For PG, a couple of smart young gals/guys who put it all on the line to start their own internet business is the cutest thing since puppies. That’s one reasons why he appreciates indie authors.

PG remembers when he first heard about Amazon from a friend and read an interview with Jeff Bezos. Later, PG created quite a few posts as the illegal Apple/Big Five Publishers scheme to kill Amazon fell apart.

Of course, Amazon has probably been the best single thing to happen to authors and readers in the last twenty years. Gatekeepers of dubious ability knocked back on their heels. Talented authors who want to move fast and write a lot of books unchained. Indie authors who know their readers because they pretty much are their readers instead of believing most people are more like their classmates at Swarthmore and Princeton than anything else.

Literati will go to their graves without admitting it, but Amazon has also helped Big Publishing to avoid becoming Semi-Big or Largish-Medium Publishing during the same time-frame. Since a great many publishing executives fall into the category of smartish, Amazon may have even prevented Big Publishing from becoming Chapter 11 Publishing.

Based upon a whole bunch of authors that he knows and carefully monitoring of what authors, particularly indie authors, are sharing about the business side of their art, PG feels comfortable in stating that Amazon’s self-publishing programs have made it more possible for many, many more authors to quit their day jobs than any other organization or collection of organizations on the planet.

As he has mentioned before, PG hopes JB’s style and savvy doesn’t slowly fade away at Amazon since he’s becoming less and less involved in the management of the company. Amazon works in a tough neighborhood. The list of huge, well-known retailers that have lost their mojo and disappeared into Chapter 11 or, at best, irrelevance is a long one and if Amazon ever starts taking its customers for granted, it might join the Wikipedia throng of giant retailers that are no more.

The Surprising Stories Behind the Pen Names of 10 Famous Authors

From The Literary Hub:

 Some authors become so iconic that they cease, in some sense, to be people—especially once they’re dead, and have passed securely into the realm of our collective imagination. But there’s much to be gained from digging a little deeper into those writers, or at the very least, scratching off that first surface: the names (and personas) they invented for their writing careers.

. . . .

I have to admit, I had no idea that Toni Morrison was a pen name—but it’s true. The “Toni” came from her saint’s name, Anthony, which she took at 12 after converting to Catholicism. Toni soon became her nickname. “Morrison” was her first husband’s name—they married in 1958 and divorced in 1964. “To this day,” wrote Boris Kachka in a 2012 profile of Morrison, “she deeply regrets leaving that now world-famous name on her first novel, The Bluest Eye, in 1970.”

“Wasn’t that stupid?” she says. “I feel ruined!” Here she is, fount of indelible names (Sula, Beloved, Pilate, Milkman, First Corinthians, and the star of her new novel, the Korean War veteran Frank Money), and she can’t own hers. “Oh God! It sounds like some teenager—what is that?” She wheeze-laughs, theatrically sucks her teeth. “But Chloe.” She grows expansive. “That’s a Greek name. People who call me Chloe are the people who know me best,” she says. “Chloe writes the books.” Toni Morrison does the tours, the interviews, the “legacy and all of that.” Which she does easily enough, but at a distance, a drama-club alumna embodying a persona—and knowing all the while that it isn’t really her. “I still can’t get to the Toni Morrison place yet.”

“Myself is kind of split,” she told The Guardian the same year. “My name is Chloe. And the rest is . . . that other person.”

. . . .

Of all the writers on this list, John le Carré probably has the coolest reason for using a pseudonym—spies can’t use their own names when they publish books. I mean, obviously! He wrote his first novel, Call for the Dead, while an MI5 agent, but it didn’t print until he had moved to MI6. As le Carré explained:

I was what was politely called “a foreign servant.” I went to my employers and said that I’d written my first novel. They read it and said they had no objections, but even if it were about butterflies, they said, I would have to choose a pseudonym. So then I went to my publisher, Victor Gollancz, who was Polish by origin, and he said, My advice to you, old fellow, is choose a good Anglo-Saxon couple of syllables. Monosyllables. He suggested something like Chunk-Smith. So as is my courteous way, I promised to be Chunk-Smith. After that, memory eludes me and the lie takes over. I was asked so many times why I chose this ridiculous name, then the writer’s imagination came to my help. I saw myself riding over Battersea Bridge, on top of a bus, looking down at a tailor’s shop. Funnily enough, it was a tailor’s shop, because I had a terrible obsession about buying clothes in order to become a diplomat in Bonn. And it was called something of this sort—le Carré. That satisfied everybody for years. But lies don’t last with age. I find a frightful compulsion towards truth these days. And the truth is, I don’t know.

Trust a spy to keep the real story close to his chest. Well, at least he didn’t go with “Chunk-Smith.”

Link to the rest at The Literary Hub

Even on a romantic holiday my thoughts turn to murrrder

From The Guardian:

“My readers are probably going to kill me,” Val McDermid announces cheerfully when we discuss the ending of her latest novel. Her new Tony Hill and Carol Jordan book, Insidious Intent, is published on Thursday, and the reaction of fans to how she has chosen to end it will be interesting. “There’s a certain fear of being stoned in the street,” she chuckles.

We meet at the Theakston Old Peculier crime writing festival in Harrogate, where McDermid is practically royalty, and she has murder on her mind. This is not unusual, she says; quite frequently a pleasant weekend away will turn her thoughts to homicide. There was the time when she spotted a wedding party during a crime and mystery conference at her old college, St Hilda’s, Oxford, “and by the end of the afternoon it seemed to me that the logical thing that was going to have to happen was that the bridegroom would be dead by bedtime. And by the end of the weekend I had the basic shape of the story in my head.”

. . . .

If the hypothesis is correct that sales of crime writing soar during troubled political times, then the genre must be thriving. But McDermid thinks it’s not so simple. “I can’t actually think of a time in my adult life when we haven’t been living in troubled times,” she says. “I think what we have now is a greater perception of the troubled times around us, and that’s partly because of … the 24/7 news cycle.” The consolation of crime fiction for the reader, she suggests, is that “although terrible things happen, at the end there is some sort of resolution”. The value of crime fiction for the writer is slightly different: “People can read these books and be afraid but in a safe way … and that I suppose gives you the freedom to explore other things in the book … You can write about politics, you can write about relationships, you can write about landscape, you can write about whatever you want to write about and frame it in this shape.”

. . . .

Crime fiction has flourished since McDermid started writing it in the 1980s. “When I started out it was quite narrow in many respects,” she says. “Mostly in the UK what was being written was either village mysteries or police procedurals.” Having grown up in the 50s and 60s in Kirkcaldy, a former mining town on Scotland’s east coast, she didn’t see how she could translate her own experience into a crime novel a la Agatha Christie: “It’s not very much like St Mary Mead,” she observes. After university, she trained as a journalist, and worked for 14 years on national newspapers, eventually becoming the northern bureau chief of a Sunday tabloid. Her first novel, Report for Murder, was published in 1987 by the Women’s Press.

Link to the rest at The Guardian Here’s a link to Val McDermid’s books.