← The Big Impression
The Big Impression
GoPuff’s Daniel Folkman on delivering the retail media goods
00:20:31
GoPuff’s Daniel Folkman joins The Current Podcast to explore the company's philosophy, what differentiates GoPuff’s retail media network and how the platform’s unique proposition could help it capture incremental retail media dollars.
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- [00:00]
Daniel Folkman
Damien.
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Damian Fowler
I'm Damian Fowler.
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Ilyce Loefring
And I'm Ilyce Loefring.
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Damian Fowler
And welcome to this edition of the current podcast.
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Ilyce Loefring
This week we're delighted to talk with Daniel Folkman, SVP of business at GoPuff.
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Damian Fowler
Founded in 2013, GoPuff has come a long way from its original offering as an on demand convenience delivery service. Today, the company delivers almost anything you want, from convenience stores to grocery to alcohol, to home and pet products, even a coffee at midnight.
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Ilyce Loefring
As SVP of business, Daniel oversees major decisions like in housing, Gopuff's media capabilities, and how the company is navigating the evolving retail media ecosystem.
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Damian Fowler
We start out by asking Daniel about Gopuff's origin story and how it's grown over the past decade. Great of you to join us. Thank you so much. What we really want to start by talking about is Gopuff's origin story. I know you're just over a decade old and certainly you've become a household name since then. What's your unique selling point? And also, let's talk about the name a little bit.
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Daniel Folkman
Well, thanks for having me. I'm excited to chat about Gopuff and retail media and everything in between. The company is over 10 years old now, which is hard to believe. When the company started, our two founders were students at Drexel, and the opportunity that they saw in the market was to make convenience more convenient, if you will. And at the time, a lot of the delivery platforms that we now know in the third party marketplace category didn't exist around the time that we were starting, or they were very nascent. So food delivery in general wasn't what you would call a huge category. It was barely an emerging category at the time. And the difference that our founders took when they looked at the category was they're both first generation Americans. They both grew up in their family businesses, one in jewelry and one in restaurants and banquet halls. And what they learned from a young age was it was really important to control the entire customer experience to actually make money, because they weren't super familiar at a young age with the idea of venture capital or private equity and to be able to control the end to end customer experience. And when they looked at this opportunity in the convenience store space, which is where we started, the idea of owning inventory, controlling that customer experience, and actually making money on the goods that we sold was critical in terms of starting the business. You asked about the name. I hate to disappoint you, but it's not a super interesting story, although you may believe it to be. When Our founders had started the business. The story goes that they had a number of friends, they had names on a whiteboard as they were trying to think through what the name would be. And Gopuff was the name on the whiteboard that had stuck out and felt different to everybody. So we went with that name early. As you can imagine, we had a number of folks at one point or another recommending a change in the name. But we had built a brand around it, as you mentioned, household brand today. And our customers loved the name and the brand and so we stuck with it. We leaned into it and we thought, you know, it gave us a right to be a little bit more disruptive and edgy when it came to marketing and our brand itself. And we feel like we've leaned into that a lot throughout the years. So, yeah, we've come a long way.
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Damian Fowler
That's really interesting. I mean, I think that the name, in a way, the name of the brand does kind of give the brand a sort of slightly, we might say in England, cheeky edge. What does that mean though, in terms of like your marketing?
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Daniel Folkman
I think it's a fair question. Over the years, I would say that the longitude in which we've taken to pushing the boundaries with the brand and the name have varied. But we ultimately think that for what we do and the platform that we've built, our customer, our core customer is in that 18 to 35 year old demographic. When we first started, it was very focused on college. It's expanded pretty substantially and one of our fastest growing categories are actually young parents. But with the brand, it's been really important to us over the years that we've remained at the intersection of culture and commerce. We feel like the brand gives us a right to be highly relevant to culture as it evolves. And we believe that it's kind of our responsibility to show up where consumers are spending their time, whether physically or digitally. So a lot of the marketing and the partnerships and the collaborations that we've done over the years are somewhat a reflection of that. And we think that without this brand, we may have taken similar approaches, but we don't know that it would have been as impactful as we feel like we've seen with a lot of the initiatives. It's not to say that everything we've done works and we haven't missed the mark here and there, but we feel like it's been our birthright, if you will, to push the bounds on the brand side of the house.
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Ilyce Loefring
You also have a very successful strategy with partnering with brands around normal, like operating hours. So I've read that Gopuff does most of their sales between 6pm and 2am when most places are closed. I know, like Starbucks for instance, you work with them to get an order to somebody past their closing time. Can you explain a little bit about how this approach is beneficial to the brand and how it goes about choosing which types of partnerships to pursue?
- [05:19]
Daniel Folkman
I think that everything we do is rooted in how are we creating or how can we create incremental purchasing opportunities for customers or white spaces in which customers otherwise wouldn't have transacted? Or there were a number of barriers in the way of them making a transaction. So examples of that would be at 11pm at night, someone is home with their infant child, they're out of diapers, they really need those diapers. There's not really an interim solution in the household. But the idea of getting in a car and driving to a store either doesn't work because the stores nearby don't have the product, or the parent isn't comfortable getting in the car by themselves at 11 o'clock at night with an infant child to go drive to the store. Right. And so before Gopuff existed in that situation, there would be really no transaction occurring or the ability to go make that purchase would have had high friction in front of it. With Gopuff, a couple clicks of the button, 15 minutes later, the diapers show up. Right. There are countless examples of that. Ice cream at 2 in the morning when someone comes home and they're craving ice cream and they don't want to go outside, or the stores nearby are closed or alcohol being delivered after someone's had a couple of drinks, there's no store within walking distance and they're not going to get behind the wheel of a car. So I say all that to say that everything we've kind of done has been oriented around how do we create these opportunities for customers to purchase that they otherwise didn't have. That obviously transitions really well when you think about building a media platform because brands now have an opportunity to put themselves in front of consumers in white spaces or in incremental purchasing moments. That's not to say that like when we partner with folks or work with our advertisers, we ignore the 2am to 6pm window, the inverse of it. We still do a lot of business there. But Starbucks is a great example. To your point where the average Starbucks store closes at some point in the early evening. And while maybe you're not thinking about drinking coffee at 9pm I can think of a number of use cases, whether it's hospitals or colleges or similar, where caffeine is super valuable in those moments. But also Starbucks has a great assortment of fresh and prepared food that folks can get their hands on, you know, after 6pm So I think Starbucks is probably one of the best examples of how we've tapped into that uniqueness.
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Damian Fowler
So, you know, based on your data, where all the coffee drinkers are after 6:00pm we do. Wow.
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Ilyce Loefring
Fascinating.
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Damian Fowler
Wow. That brings us to our next question.
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Ilyce Loefring
Yeah, so you mentioned media and I know in July of this year GoPuff took its ads business in house, which is not an easy task. And you're using AI on top of that to analyze first party data.
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Damian Fowler
Coffee drinkers, yeah.
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Ilyce Loefring
Was that a big factor in deciding to build an in house ads platform? And how could that impact your business?
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Daniel Folkman
It was one of a handful of key factors in terms of the decision to bring the ad platform in house. When we looked at the industry, there were a couple big things that we noticed. And this is over the past couple of years. Cause obviously, as you guys know, 10 years ago, retail media was not, it was barely a thought, let alone the one of the fastest growing channels in marketing. When we looked at the business at that point, we realized that there was a fast growing trend in terms of how many retail media platforms were popping up. Felt like everyone who had a REIT was a retailer. Someone internally was like, we need to have a retail platform. And I think that trend is only growing and we can talk about what that means for the industry in a second. When we looked at that, we realized how important it was going to be for us to differentiate from the other platforms. And so when we realized that those were like the three core pillars of why we were different than everyone else in retail and why we could be better or unique compared to other retail media platforms. It made a ton of sense for us to say, look, the only way that we can properly take advantage of these things is we need to have 100% control of our data. We need to be able to do things different with the first party data that we have access to. And yes, thanks to the brilliant work that our ad tech team has done around the AI and ML models that we've developed and continue to develop, we are able to farm thousands of data points in the blink of an eye effectively to allow brands to better target lapsed buyers or new to brand customers, to be able to identify new customers who otherwise behave like loyalists, to be able to quickly look across campaigns and See if new to brand customers would be more or less likely to convert on an ad unit if it were a single sku, for example, or a multi pack sku. So if you look at the combination of that improvement, you're moving the needle for every constituent in the triangle for the advertiser, for that customer and for the retailer. So it's early still, but all of the data is pointing in the right direction. And now we're spending a lot of time, we've had a multi year roadmap that we're constantly debating and moving around. But we are trying to double down on the power of our data and what we can do with it and how we can give more transparency, visibility and efficacy to our advertisers, give them more control over what they're doing on our platform.
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Damian Fowler
Wow, that was a very thorough answer, I have to say. And one of the things I was curious about when you were talking there was. What was that kind of moment? Was there a moment when you realized you had a critical mass of data from your customers that was like, we need to move now, we need to move into this new channel? I know this was a fairly recent development. I'm just curious about the kind of timeline you mentioned that just now.
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Daniel Folkman
That's a tough one. I can't point to a specific moment where we said or like forcing function of we have all of this data, what are we doing with it kind of thing. I don't know that there was like a specific moment in that sense. For us it was more spending time with advertisers and getting to know other retailers and understanding what they were doing and realizing that we had something different between those three kind of pillars that I mentioned, the demographic, the delivery mechanism and the data that we have access to. Not only are our customers digitally native, which we're not the only player that has that, but we are definitely in the small percentage of players that have that. We're definitely the fastest in terms of delivery. And funny enough, I saw this stat the other day. It's like only 30% of retailers offer a same day delivery capability, which I thought was like crazy. It feels very low. But it kind of shows you that we are like the outlier, not the norm in that sense. And so thinking about those things and then the idea that we've always said this, a lot of folks have shopper data because someone goes on their platform and they buy something. We believe we're the only platform that has true consumption data because the majority of customers who make a purchase on our platform are consuming at least one item in that basket within minutes of receiving that delivery. So we can actually take the funnel from discovery to consumption down to 15 minutes. And so the combination of all those things, as we looked at the market and as we talked to other people and advertisers and understood where the gaps were, that was more the moment for us to say, okay, we need to move on this quickly. We want to be at the tip of the spear of where this industry is going and not a laggard like a number of other players are. And by the way, if you're a big retailer, you can be a laggard and be really successful. We just, we don't want to sit on our laurels. That's not how we built the core business. That's not how we want to build our media business.
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Ilyce Loefring
Now you told Ad Exchanger in an interview in August that you don't think it's necessarily sustainable to have hundreds of retail media networks in the space. Now, you've talked to us a little bit about how GoPuff differentiates itself, especially when it comes to, like the data you can see when users actually consume your products. How are you able to use data like that in differing ways?
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Daniel Folkman
Well, I hope at this point that I am not the minority in my belief that there are too many retail media platforms and it's not sustainable. I think it's becoming a foregone conclusion at this point in the industry that something is going to have to change. Now, the challenge with a category or a channel that has way too many options is that in most situations, consolidation, the big folks would start to swallow up the small ones. Some of the smaller ones may go out of business or they may become super niche offerings and effectively the cycle of a company come back to becoming a feature for a bigger platform that, as we all know, that is incredibly challenging and almost impossible in this category because I don't see a world, and I could be wrong, but I would be very surprised that retail media platforms go scooping, going out and start buying other retail media platforms. Right, because they're attached inherently to the retailer and they lose all their value when separated. And I don't think that retail retailers have any interest in shutting down or consolidating their platforms because it's just a cherry on top from a profit standpoint to their already existing business that if they're a long standing retailer, obviously works. So I think it creates a challenge in the market. And I think there are a couple ways that you can attack that. I think the first is building something that is different and unique in a number of the ways that, that I just said. And we do believe that we've done that at least early innings and there's more work to do. And the feedback that we've gotten from the industry and from advertisers has been consistent with our thesis. But I don't know that's enough. We think that the form of consolidation that our industry will start to see has to look something like cross retail collaboration. You can differentiate on data, you can differentiate on capability, you can differentiate on demographic. And we believe that will carry us. And we've seen that in other industries and we've seen that in other categories. And I believe that we're getting close to that point. I think another way to differentiate beyond just the collaboration stuff is we have to double and triple down on the data that we have and what we can do with it. It's another, what I would say was a contrarian view maybe a year ago. That's becoming less and less. And a year ago this was like a conversation I don't believe anyone really wanted to have. I think today it's become a much more popular conversation. To bring this back to the question that you asked, on top of the differentiating pillars, on top of the cross retail collaboration, we also need to think about how we use the data to drive the right outcomes for advertisers and not just focus on being the highest returning platform, because that is an easily manipulated metric. Wow.
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Damian Fowler
We were just both stunned there by that. Yeah, no, yeah, that's that your insights there on collaboration, I hadn't heard. And I think that makes a lot of sense. Basically when we think about the open web and the direction it needs to go for everyone, that fits into that concept, I think. Finally, I'd love to get your predictions a little bit. I know you're probably not in the prediction game, but based on the data that you have, as you think about 2025, what are your priorities? Where are you heading for the media.
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Daniel Folkman
Business or generally for the company?
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Damian Fowler
Let's say generally for the company.
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Daniel Folkman
Okay. When we look at our priorities for the business, I mean, first and foremost everything that we do is focused on our customer and just continuing to deliver a great and differentiated experience. I think today we've seen the adoption around speed. I think it's like 80% of customers choose the fastest speed or delivery option when available, which feels pretty like obvious. But I think a couple years ago was not so obvious. So doubling down on speed, which we believe we Win in is something that we continue to focus around, especially knowing it's one of the top considerations for a potential customer. But more recently, doubling down on the and investing in the importance of value to the customer. You know, it's no secret that the economy has been up and down over the past couple of years. Typically during an inflationary or an uncertain economic environment, customers are always looking for great deals and great value. So we think speed, value, speed and value are two key priorities. I'd say the last one for us is around reliability, right? If we say we're going to deliver in 15 to 20 minutes, we damn sure better deliver in 15 to 20 minutes. There's nothing worse than customers expectations not being met. We would much rather say we're going to deliver in 25 to 30 and deliver in that window than say we're going to deliver in 15 to 20 and then miss that window by even a couple of minutes. So everything we're doing within the company is focused around those three things. You'll see a lot of partnerships coming online in the next six to 12 months. The team's been working really hard on that and then continued iteration on a couple of things that we already talked about. So our subscription program and our media platform is really important to us. We definitely have ambitions to be much larger than just a retail media network. We see ourselves as a media ecosystem, excuse me, that our partners can better understand, better engage with, and ultimately sell more product to their desired customers, whether on our platform or outside of our ecosystem. And then of course, in between, investing in our retail media capabilities to enhance the value of the data that they're purchasing on the upfront and that they're seeing on the back end. And so everything we do is focused around our data, who our customer is, being more transparent with our advertisers and ultimately giving them more tools to sell more product to the customers that they want. So the media stuff doesn't work without the core business. So let's start with the speed, the value and the reliability. But assuming those things continue to improve and work, which we have high confidence that they will, we think we can build something really unique on the subscription and the media front on top of it.
- [19:52]
Damian Fowler
And that's it for this edition of the Current Podcast. We'll be back next week, so stay tuned.
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Ilyce Loefring
The current podcast theme is by Love and Caliber. The current team includes Kat Fessy and Sydney Cairns.
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Damian Fowler
And remember, we believe that it's kind.
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Daniel Folkman
Of our responsibility to show up where consumers are spending their time, whether physically or digitally.
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Damian Fowler
I'm Damien.
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Ilyce Loefring
And I'm Eilese.
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Damian Fowler
And we'll see you next time. And if you like what you hear, please subscribe and leave us a review. Also, tune into our other podcast, the Current Report.