Is Foxtrot primed for major expansion?

Discussion
Photo: Foxtrot
Jan 31, 2022

Foxtrot recently secured $100 million in new funding with plans to open 50 locations over the next two years as it seeks to “modernize the nostalgic corner store experience” with a focus on discovery, local and digital.

The company, described by Winsight Grocery Business as a “label-defying hybrid of urban convenience store, local market and café,” launched in 2014 as a digital-only delivery service and has opened 16 locations across Chicago, Dallas and D.C., leveraging its stores as delivery hubs. Foxtrot will enter Austin and Boston in 2022 and New York, Nashville and Miami in 2023.

A primary differential is its “highly curated merchandising strategy” that features core pantry essentials, favorite treats and hand-picked wines, spirits and local beers. Nearly a quarter of all shelf space is dedicated to locally sourced items from neighborhood artisans and to emerging purveyors to support discovery.

Carla Dunham, Foxtrot’s chief marketing officer, said at a recent NRF Big Show session, according to Zipline, “We’re disruptors but we’re also being disrupted, so at any given month, 10 to 15 percent of our product is new.”

Plans call for deeper private label assortments that cater to mealtimes, expanding on its core offerings of coffee, ready-to-eat cafe meals and wine.

The digital-first focus is reflected in its five-minute pickup option, 30-minute local delivery and its national shipping platform, Foxtrot Anywhere, promoted foremost online. To support its omnichannel expansion, Foxtrot plans to triple its engineering team and invest in hires in logistics, store payments, inventory management, personalization and Perks, Foxtrot’s loyalty program.

The ramped-up store openings reflect Foxtrot’s belief that the pandemic has heightened the appeal of community and local discovery. In 2021, Foxtrot’s five-minute market pickup and cafe orders grew 250 percent and 375 percent, respectively.

Mike LaVitola, Foxtrot’s co-founder and CEO, told TechCrunch, “The biggest trend we have seen is customers fully leaning into the retail experience and for that to be the main customer acquisition point for the online business.  Delivery is here to stay, but customers are ultimately seeing the value of our merchandise. As a result, we are spending 90 percent of our time on that in-person experience, obsessing over who has the best donuts, coffee or tortillas.”

DISCUSSION QUESTIONS: Has the in-store experience during the pandemic become a more important driver of customer acquisition for digital-first players such as Foxtrot? How would you rate Foxtrot’s growth potential?

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Braintrust
"Shopping Foxtrot is FUN, since it’s about the community coffee shop feel but also about discovery. "
"Foxtrot is a breath of fresh air that provides a modern take on convenience."
"They could be the Starbucks of convenience stores."

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11 Comments on "Is Foxtrot primed for major expansion?"


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Jenn McMillen
BrainTrust

Shopping Foxtrot is FUN, since it’s about the community coffee shop feel but also about discovery. This is where you go to find local artisan honey, not Hormel chili in a microwaveable bowl.

Bob Amster
BrainTrust

Having physical stores that potential new customers can see, go into, and with which they can identify when ordering online, is the best of both worlds. That’s why omnichannel retailing is almost de rigueur now.

Dave Bruno
BrainTrust

Curated, local and artisan product discovery is the perfect antidote to the drudgery of online discovery and, if assortments align with local tastes, the store can definitely be an acquisition engine.

Ron Margulis
BrainTrust

I visited the Georgetown/DC store recently and I don’t see it as a competitor to traditional c-stores at all. If anything, it will take away customer attention and market share from the likes of Starbucks, Pret a Manger and Au Bon Pain. It is an interesting shop with good quality items, but it is more than a bit overpriced (this is likely due to the upscale location in Georgetown). If they get the assortment-value paradigm right and match the store to the neighborhood, it could work. However I still remember Tesco’s attempt to turn convenience retailing on its side with Fresh and Easy, and we all know how that turned out.

Gary Sankary
BrainTrust

This looks like a great example of a retailer merging digital and physical experiences and creating one unified brand experience for their customers. Retailers who engage in multiple channels to reach customers should focus on one experience that happens as seamlessly as possible, across all those channels.

Nicola Kinsella
BrainTrust

Their timing is excellent. The pandemic has driven a big surge in support for local businesses and demand for locally sourced products. Meanwhile people are still cooking at home more, and and craving fresh differentiated experiences.

As for in-person being an important driver of customer acquisition for digital-first companies, it really depends on the vertical. But for a highly curated selection of grocery staples and treats that constantly offers the element of surprise, in-person experiences are definitely a key growth driver – if they can scale them well. They could be the Starbucks of convenience stores.

Richard Hernandez
BrainTrust

I like the format – not really a c-store competitor but something different. I don’t know if it’s right for every neighborhood but time will tell.

Neil Saunders
BrainTrust

A lot of convenience and local stores in the U.S. leave a lot to be desired. They’re dingy, down-at-heel, and often overpriced. Foxtrot is a breath of fresh air that provides a modern take on convenience. The digital services are excellent, but they are underpinned by a very solid proposition. Good luck to them!

Karen S. Herman
BrainTrust

A digital-first in-store experience during the pandemic has been a vital driver of customer acquisition, across all retail categories, most clearly with grocery, and Foxtrot’s expansion is a clear sign of their success. Foxtrot drives digital to bring customers in-store, elevates the grocery shopping journey through discovery and curation, then finishes it with convenience in pick-up and delivery. Growth potential is significant as they expand to Austin and Boston, cities with digital savvy shoppers.

Craig Sundstrom
Guest

Grocery is a tough field. I wish them luck … they’ll need it.

Anil Patel
BrainTrust

In-store experiences have always been vital for acquiring and retaining customers. But during the pandemic, customers became more digital savvy, and they are expecting digital-first experiences in every interaction with the brand, be it an offline or online interaction. So, digital players like Foxtrot have no other choice but to go omnichannel and escalate their in-store experiences.

Being a digital-first company, it’s in Foxtrot’s DNA to leverage customer data to provide an outstanding customer experience across all shopping channels. This makes me highly optimistic about Foxtrot’s growth potential. The brand’s success with local pick-up makes the case of omnichannel strategies much stronger. Retailers who still don’t believe in BOPIS should take a look at Foxtrot and learn how BOPIS can do miracles in their retail stores.

wpDiscuz
Braintrust
"Shopping Foxtrot is FUN, since it’s about the community coffee shop feel but also about discovery. "
"Foxtrot is a breath of fresh air that provides a modern take on convenience."
"They could be the Starbucks of convenience stores."

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