🛒 Disrupting the Cart…

Hi there

Need to move fast? A group of Swiss students just smashed the world acceleration record with a custom EV racer that goes 0–100km/h in less than a second. And it does it over less than 12 metres.

In this Open Letter:

• Basket price: Changing the grocery game.
• Cringey Apple, Elon’s bio & how to lose R1.1 trillion.
• Got gold? We’re giving away R2’500s worth + merch.
• Startup play: The ins and outs of building in public.
• Your security? The poll results are in…

TRENDING NOW

Disrupting the Cart

Inside the on-demand grocery revolution

If you follow memes like we do, you’ll have noticed that Springbok’s minty green away kit reminds people of Checkers Sixty60 (and Listerine).

And in a masterwork of guerilla marketing, Checkers quickly moved to co-sponsor the RWC TV rights on SuperSport. So now when you tune in to World Cup games, you see the Sixty60 logo together with shots of the team in that jersey — genius.

But that’s not the only place they’re scoring big…

It’s in the numbers

Shoprite Group’s recent results show Sixty60 sales grew by a staggering 81.5% this past year. And Moneyweb estimates its revenue to be somewhere in the region of R3.5bn.

If those numbers are accurate, and with the app being downloaded over 3 million times, that means their annual revenue per download is around R1200 per annum. Not bad at all.

It’s going so well, rumours are they’re working on innovative ways to solve problems delivering in townships, possibly partnering with a taxis-as-logistical-partners startup. Important, because if they crack the informal market it could become their primary driver of growth for the next 10 years.

Now, you might remember we showed how other big players are battling in the traditional e-commerce space. So the question is: What did Checkers Sixty60 do differently?

Play on Playa(s)...

Let’s go back to before the Sixty60 launch.

Both PnP and Woolworths had e-commerce plays in place long before Checkers. But they weren’t nearly as fast. They were essentially, traditional order-now-get-it-next-Tuesday services.

What was wrong with this?

• Delivery was a mess. Recipients need to be home at a future-dated time. What’s more, cold chain products could be a challenge as a driver typically goes out for a few trips.
• Consumer behaviour doesn’t align. Do you know what you’re eating tonight? Likely not, but come 5 pm and if the sun’s out, you might wanna light the fire to start the braai at 6. Ordering through traditional e-commerce just doesn’t fit this common behaviour.

It’s only when Sixty60 entered that the game changed: Take 60 seconds to order and get your items delivered in 60 minutes. Fewer logistics issues and delivery within 60 minutes from a local Checkers store means no cold chain issues.

Sure, everyone’s trying to match that now – PnP acquired Bottles to turn it into asap! and Woolworths is offering fast deliveries via Dash. Even Massmart (Game, Makro, etc) bought OneCart to enter this space.

But how did Checkers change the game?

By strategically aligning with a tech startup…

See, back in 2018, local startup Zulzi was working on solving the problem of getting groceries delivered in 60 minutes. And, in particular, they had an innovative approach to allow pickers to replace items that weren’t available (a common problem in this space).

So, Checkers got Zulzi to build their first app and tested it in a few locations close to their head office. This helped them develop the unit economies needed to make it work at scale.

Some would say Checkers had “last-mover advantage”, but we disagree. Sixty60 shies away from the traditional e-commerce model to pioneer on-demand grocery delivery. It’s something else entirely.

And they're cementing their place as first movers with Sixty60 & Checkers-branded toys like the Barbie-compatible “Ken the Sixty60 delivery guy” and the “Checkers Little Shop” kick bikes and scale models.

‍The long game

So, what about cross-store delivery options such as Zulzi, OneCart or even Uber Eats? Can they beat Sixty60? We doubt it. Deliveries don’t make money (it breaks even at scale, at best) so what’s left is the margin. And when Checkers is already selling on Sixty60 at in-store prices, where is the margin to be made? Not to mention the volume of data they’re already collecting to ensure their basket margin stays more competitive than peers.

There’s lots to love about the Sixty60 story, but our favourite part is how a large corporation embraced innovation by partnering with a startup. With deep pockets and large customer bases, we hope more corporates take a leaf from the Shoprite innovation playbook.

IN SHORT

🍎 Apple of her eye. In the middle of its iPhone 15 event, Apple played a 5-and-a-half-minute-long skit featuring Mother Nature (Octavia Spencer) grilling Tim Cook and a bunch of supposed Apple employees over “Apple’s First Carbon Neutral Product”. At one point, they lock eyes for an excruciating eternity before Mother Nature walks off saying “Don't disappoint your mother”. Cringe.

📢 Meta Channels. Meta expanded WhatsApp Channels to 150 countries this week. Channels let brands, companies, sports teams and content creators you choose to follow send you updates. It’s all private, no one can see who you follow. But it’s getting pretty close to that ultimate tipping point where someone can just pay and spray every WhatsApp user. Not yet, but eerily close…

📖 The Book of Elon. The much-anticipated biography of Elon Musk dropped this week and gave many an insight into the tech titan’s life. Written by Walter Isaacson (the same guy behind the Steve Jobs bio), the 600+ pages include more on the various Twitter shenanigans, his beef with veganism-champion Bill, Elon’s favourite mobile game and more.

🥩 Beefy Prices. As we head into summer, South Africans are preparing themselves (and their gear) for serious braaiing. And it would seem that meat producer prices have been coming down. So why then is the price of meat on the fridge shelf increasing? Well, it would seem like the retailers are applying meatier margins than they did before according to the Competition Commission's latest Essential Food Pricing Monitoring.

💸 Like a sieve. The SA economy is losing out on R1.1 trillion each year due to “trade misinvoicing” alone. For some perspective, that’s about half the country’s annual budget – a whole lotta schools, clinics and infrastructure maintenance we’re missing out on.

JUST FOR YOU

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And since we are partnering with Troygold for the month of September, we’re giving away R2’500 worth of gold, plus this cool merch.

And all you gotta do to stand a chance of winning it all is 1, 2, 3, 4…

STEP 1: Click on this shiny button 👇
(The button opens a LinkedIn tab.)

Share the newsletter

STEP 2: Click “Share in a post” right under the Open Letter logo in that new tab.

STEP 3: Type a few words on what you think about The Open Letter, as a post to your followers.

STEP 4: Tag us: @TheOpenLetter and hit “post”.

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THE THREAD

To Build or Not to Build in Public…

If you’ve been marvelling at the amazing momentum of public builders like Momint and Notion, and wondering if maybe you should do the same, then this week’s podcast is for you.

It’s a quick 30 minutes, jam-packed with killer insights…

The best bits

1. The best time to build in public
2. Building in public is an awesome way to cement one of the fundamental needs for a successful startup (or any business) - accountability. If you promise to do something in public, everyone’s eyes are on you, so it's great motivation to follow through.
3. It’s particularly well suited for builder founders (founders who code and build out the product themselves) because you can get so much direct feedback if people know what you’re developing and you can simultaneously generate hype and a following even before your product’s out – get specific insights here.
4. When not to build in public
5. Equally as important is knowing when it won’t work for you. Accountability is one thing, but there is the risk of someone (anyone) stealing your idea. Unlikely, but not impossible.
6. And it’s especially dangerous to build in public if you are not committed or willing to put in more time, effort and resources than anyone else to see it through. If you emphasise the idea's value over the actual execution, someone who’s a better executer could potentially sweep in and build a similar product better or faster than you – get all the insights right here.
7. Why people REALLY want to hear your story
8. Building in public has really taken off because it can create such hype and essentially become your entire marketing strategy. And many founders shy away from it because they don’t have much real success to show yet.
9. But, if you’ve ever followed a startup’s public story, you’ll know that there’s immense entertainment value when someone who came from nowhere suddenly starts getting things right. People love that. It engages them, which, arguably, makes them more likely to become a customer or promoter. Get the lowdown here.

Like our podcast? Remember to subscribe and never miss an episode.

THE RESULTS

Last time, we asked “who ya gonna call”, and most people say private security firms or community WhatsApp groups…

🟨⬜️⬜️⬜️⬜️⬜️ 👻 Ghostbusters (9%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🍩 SAPS (2%)
🟨🟨⬜️⬜️⬜️⬜️ 🦹🏾‍♂️ Neighbourhood Watch (18%)
🟩🟩🟩🟩🟩🟩 👮 Private security firm (41%)
⬜️⬜️⬜️⬜️⬜️⬜️ 👓 A friend (2%)
⬜️⬜️⬜️⬜️⬜️⬜️ 🥋 Recall my karate training (0)
🟨⬜️⬜️⬜️⬜️⬜️ 💪 Hugo (7%)
🟨🟨🟨⬜️⬜️⬜️ 📱 Facebook/WhatsApp group (21%)

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