Fresh produce items include weekly staples that customers purchase each week and lead to repeat orders and "basket building" behavior. With a desire to launch this category for the first time, Gopuff had to navigate the logistical challenges of suiting fulfillment centers to be able to handle this new offering:
Warehouse Retrofitting: Modifying GoPuff's existing spaces with Atosa refrigerators and necessary equipment to maintain fresh produce quality.
Staff Training: Developing training materials and designating inventory control specialists among the warehouse associates.
Site Selection and Product Selection: Uncertainty around how many sites could support the new offering necessitated careful site selection to minimize risk. Additionally, choosing suitable fresh produce assortment was crucial to prevent low demand and product wastage due to damage or expiration. A location strategy had to be developed to determine which sites could support the product as which sites would be ROI positive.
Regional Supply Chain: Navigating the challenge of national delivery with predominantly regional fresh produce wholesalers.
Product Marketing: Ensuring customers familiar with GoPuff's snack and beverage offerings were aware of the new fresh produce availability.
Actions Taken
To overcome the challenges, a large cross-functional team across merchandising, logistics, fulfillment, supply chain, and strategy built a plan to launch and expand Gopuff's fresh produce offering:
Warehouse Reorganization: Cleared inventory nearing the end of its lifecycle and retrofitted the space with 2-3 Atosas, even upgrading the electrical panels at certain sites as necessary.
Customer Search Behavior Analysis: Analyzed search behavior to discern customer preferences for fresh produce. "Lettuce" emerged as the most searched fresh produce term.
Site and Product Selection: Selected sites based on customer demand thresholds and search behavior for grocery products, ensuring an ROI-positive rollout. The fresh produce assortment was selected based on this data. The location strategy involved building a model using a mix of search and sales data to arrive at which sites would be ROI positive.
Supply Chain and Inventory Management: Established supply chains with regional wholesalers and closely monitored inventory to meet demand without flooding the inventory.
Marketing and Promotion: Conducted marketing campaigns to raise customer awareness about the new offering.
The necessary cold storage and atosas had to be installed to accommodate the new service offering.
Results
The launch of GoPuff's on-demand fresh produce delivery resulted in several positive outcomes:
Product Expansion: Achieved a nationwide launch of 25 fresh produce SKUs across participating GoPuff stores.
Increased Customer Retention and Repurchase Rates: The addition of weekly staples to GoPuff's assortment led to higher customer retention and repurchase rates. Baskets were also higher when grocery items were attached showing that these retained customers were also higher value than average shoppers.
Efficient Fulfillment Centers: GoPuff developed centralized fulfillment centers for scaled sorting and quality supervisory, saving on transportation costs by delivering items in bulk to centers and completing the last-mile delivery at a lower cost.
Gopuff has expanded their produce offering and it is now a key staple of the shopper experience with plenty of options to choose from.
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