🥬 DoorDash = the Shopify of e-grocery?

Monday, August 24, 2020 by Snacks
"_Tell them we're coming for the eggs..."_

"Tell them we're coming for the eggs..."

Last Week’s Market Moves
Dow Jones
27,930 (0.00%)
S&P 500
3,397 (+0.71%)
Nasdaq
11,312 (+2.66%)
Bitcoin
$11,499 (-3.37%)
10-Yr US Treasury
0.636%

Hey Snackers,

Claaassic Venmo decimal derp: Citibank accidentally wired $175M to a hedge fund — it meant to send $1.5M. The fund is ignoring the "pay us back" Venmo request. Maybe Citi should try shaming it in the post-brunch group chat.

The stock market hit an all-time high last week thanks to "Big Tech 5" gains. Apple, Amazon, Alphabet, Microsoft, and Facebook now make up 25% of the S&P 500 — their massive valuations dominate the 500-company index.

On our pod: John Deere’s million-dollar tractors aren’t getting traction in the corona-conomy. Our 15-minute pod jumps into the infamous “waterfall chart.”

Deliver

1. DoorDash pushes to become a "delivery-everything" platform ahead of its IPO

Revenge is a dish best served cold... So is delivery domination. DoorDash is in the enviable pandemic position of being the #1 restaurant delivery platform in America. In the mafia-style food delivery wars, DoorDash has protected its leading market share against promo-slinging rivals Grubhub and Uber Eats. Now Don DoorDash is coming for Instacart and Amazon's territory.

  • DoorDash is launching grocery delivery, starting with chains like Smart & Final in California. It's offering free delivery to DashPass subscribers.
  • Grocery, but make it takeout: DoorDash promises to deliver groceries in less than an hour. That gives it an edge over Instacart and Don Bezo's Amazon Fresh, which typically use scheduled delivery windows.

It's all about the backend, baby... Sometimes the things you don't see are the most powerful. Shopify's platform powers the ecommerce of over 1M businesses, from Kylie Cosmetics to the local taco joint — but consumers don't see Shopify. DoorDash has a similar "hidden" platform:

  • DoorDash Drive: DoorDash sells its backend delivery platform to grocery chains like Walmart and Wegmans, handling their last-mile delivery.
  • Like the Shopify of e-grocery, DoorDash Drive powers chain stores' delivery services, letting them brand them as their own. Now, DoorDash is using the same platform to bring grocery delivery to its own app.
THE TAKEAWAY

DoorDash wants to be an all-in-one delivery platform... It dominates restaurants, it's making big moves in grocery, and it added convenience stores and pharmacies this year. In addition to selling direct-to-consumer, it's selling to other businesses with DoorDash Drive. This service could be a major growth driver as stores expand delivery in the corona-conomy. DoorDash's "delivery everything" play puts it in a strong position as it gears up to go public this winter — It raised $400M in June at a meaty $16B valuation.

Highs

2. Who's up...

When the red Corolla rolls up before he asks for digits... 5 stars for timing. Uber and Lyft shares soared Thursday after the ride-hailers narrowly avoided a major shutdown. California's AB-5 law required them to reclassify gig drivers as employees by August 20th. Uber/Lyft said nahhh and threatened to suspend service in CA starting Thursday. Just hours before the expected shutdown, a court granted them a reprieve delaying the order. Now Uber/Lyft are urging riders to vote on Prop 22 in November to exclude ride-hailers and delivery apps from the law.

Bagged a bullseye... Target stock hit an all-time high after the retail classic posted its strongest quarterly sales growth ever. Profits jumped a massive 80% after curbside pickup popped over 700%. Plus, online sales nearly 3X'd as Tarjay added a whopping 10M new digital customers in the 1st half of 2020. But its grocery biz is the real MVP — milk and hummus allowed it stay open during lockdowns.

Lows

3. ...and who's down

Finally fixed the toilet seat... Home Depot had its best quarter in 20 years thanks to lockdown DIY "House Hype." But the stock fell because Home Depot's CEO didn't sound hyped about this quarter. Stimulus checks helped bankroll last quarter's splurges on Adirondack chairs — now checks have been spent and the $600/week extra unemployment benefit has expired. Investors are wondering whether the home spending boom has peaked.

Same paper, less Nutella... You're shelling out more $$$ for the same jar of Italian decadence. The value of the US dollar fell to its lowest level in over two years, making it less valuable compared to currencies like the Euro. That's partly because the Fed has been blasting out fresh dollars to stimulate the economy. More dollars = less demand for dollars = less valuable dollars. Depreciation threatens the USD's "Superman status" as a global reserve currency. Long-term, it could mean higher inflation (and really expensive Bordeaux).

What else we’re Snackin’

  • Chill: 11 tips for anyone who doesn't know how to relax in the WFH era (it's all about "relaxation pockets").
  • Explore: 19 beautiful islands across the US that you can drive to (aka not Hawaii).
  • Learn: What's a stock split? It's kind of like slicing a pizza... Tesla and Apple are slicing theirs on August 31st.
  • Visualize: A 3D mapping of the largest population density centers — the Boston-Washington corridor looks like an unmown lawn.
  • Achieve: Why "success addicts" choose being special over being happy, and why most people never feel successful enough.

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Disclosure: Authors of this Snacks own shares of Apple, Shopify, and Amazon.

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