The retail industry has been in a huge state of flux over the past decade. The rise of social media and e-commerce has oriented consumer buying behaviour towards a variety of new online channels, which are increasingly informing how people discover products, engage in transactions, and ultimately access the items they purchase. It’s quite remarkable that the modern buying journey can be catalyzed anywhere — on Instagram, YouTube, a blog, app, or website — and end with a delivery to the customer’s home in a matter of hours, or with the customer picking up purchased items at a pre-designated location.
As online commerce penetration accelerates — e-commerce represented 21.3% of total U.S. retail sales in 2020, up from 15.8% in 2019 — merchants are being forced to ask themselves how they can refactor their physical retail presence and overall DNA for a new omnichannel reality. They’re pondering questions such as:
- What does the store of the future need to look like when people are mostly discovering products online?
- How can you entice customers to want to pay a visit to your store with new experiences?
- How can you successfully manage dual options for at-home deliveries and in-store pick-ups, depending on how your customers want to retrieve their orders?
Fortunately for these merchants, they don’t need to look far for a best-in-class case study. That’s because Foxtrot Market is the new benchmark for omnichannel retail. Foxtrot combines an upscale corner store and café with app-based purchasing that makes its entire inventory available for delivery in under an hour. The company is built on three pillars:
- Experiential Corner Store: A one-stop neighbourhood market with a full-service café, sommelier-curated wine shop, chef-driven packaged products, and private label / exclusive-to-Foxtrot goods. Foxtrot has designed its stores as meeting places for members of the local community that want a convenient way to access curated, high-quality items in addition to their everyday grocery staples. And let’s not forget those once-in-a-while indulgences — cookies, anyone?
- Robust E-commerce Platform: Foxtrot’s website and mobile app facilitate a loyalty-driven digital shopping experience that recommends products based on time-of-day, location, and a customer’s preferences. Select items are also currently available in Foxtrot’s Ship Shop , which will continue to add offerings as it expands its nationwide shipping capabilities.
- Proprietary Delivery Network: Foxtrot is able to fulfill products from its stores through an independent carrier network, which provides customers with a one-hour delivery guarantee. This delivery network is poised to expand as Foxtrot looks to make more inventory available to customers all across the U.S.
It’s exciting to see Foxtrot’s model working, which was stress-tested by a once-in-a-lifetime pandemic that has had an indelible impact on the North American retail industry. Foxtrot’s delivery model has been central to its customer service strategy since inception, which uniquely positioned the business for strength last year. In 2020, company sales increased over 100% — fuelled by consistent year-over-year growth across channels. Of that growth, 55% derives from retail, largely from same-stores sales, and over 200% from e-commerce, which was driven by a 100% increase in app downloads.
Foxtrot’s focus on the convenience retail market is particularly compelling. The North American corner store market is very large, and valued in the hundreds of billions of dollars. Foxtrot is well positioned for growth as the category shifts towards catering to digitally native consumers that expect a multi-channel shopping experience, better products, and a sense of community. When the world is able to fully re-open post-Covid, Foxtrot will continue to welcome guests who are seeking inviting cafés to enjoy meals and engage in social interactions — just as they did once before. The company currently operates an existing network of 10 store locations across Chicago and Dallas, a number that is poised to double as Foxtrot expands into new markets such as Washington, D.C. this year.
When our team met with Foxtrot’s founders and executives during the Fall of 2019 (hi Mike, Taylor, and Carla 👋), we knew Foxtrot was a concept we wanted to get behind and help accelerate. Wittington Ventures co-led a $17M growth round in the company alongside Imaginary Ventures, which was announced in February of last year. Given the momentum behind the business since then, we are excited to see the company capitalize on the opportunity with their announcement of a $42M Series B investment round today. Our team is happy to participate in the round and continue on this journey with the executive team, which includes some new faces: Sumi Ghosh, COO; Scott Holloway, SVP, Delivery; and Caroline Barry, VP, Strategy. The newest leadership additions, who have earned their stripes in leadership at Starbucks, Instacart, and sweetgreen, respectively, will be core to the brand’s growth in this next phase.
We won’t forget the first time we had the chance to experience Foxtrot in its entirety when we were conducting our investment research efforts in Chicago. It really felt like the future of retail. We are thrilled that many of you will get to have that same opportunity to experience this brand in the near future.