pradeep
@pradeep24
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Advanced consumer product & eng, random interesting topics. Co-founded jo (YC W24), farmstead (S16, pure-play online grocer) & kicksend (S11, photos)
California
Joined November 2008
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Trying to order groceries online and wondering why you can’t get a delivery slot?
The answer is that online grocery delivery wasn’t designed for ecommerce.
A thread 👇
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One in eight (1/8) Americans that are on food stamps don’t currently have online grocery options, though they need it the most.
Today,
@farmsteadapp
and
@joinforage
are teaming up to provide an online grocery option for them, like never before.
Here are the full details…
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A different take — Walmart’s interest in TikTok is actually quite savvy. It’s the canary in the coal mine for what all retailers will experience in the next 2 years as they fight Amazon internationally on physical and digital fronts. A quick thread👇
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Supermarkets in the US have such low gross margins.
Kroger - 23%
Publix - 28%
Albertsons - 29%
Walmart - 25%
When we first saw this data at
@farmsteadapp
, we couldn't believe how low the average was. A quick thread 👇🏼
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In 2011,
@garrytan
encouraged me to apply to YC when I ran into him at an event, a nudge that changed the trajectory of my life.
Over the course of a few weeks during S11,
@paulg
and Garry helped us pin down my first startup's onboarding flows - a treasured lesson as a
One of the true pleasures of being back at YC is hand-picking and funding startups myself.
Here are my YC W24 founders. I predict very big things in each of their ten year overnight successes 🫡
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One simple example: grocery stores organize food by category into aisles, which make sense for consumers.
An efficient ecommerce operation groups items by how often they’re ordered so that you minimize the distance traveled to fulfill orders fast.
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We decided to move at-risk people to the front of the waitlist so that as capacity opens up, they will be served first.
Using an honor system, households can self-identify as at-risk and get moved to the top of the waitlist.
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Today,
@liveink
and I are thrilled to announce Farmstead’s oversubscribed Series A that we raised this year during the pandemic and shelter-in-place. Here’s our story ⬇️
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here's some YC magic:
- hit extremely obscure macOS obj-c audio issue that's core for our product tied to libraries two decades old
- spend hours getting nowhere with LLM help, or usual searches
- search on bookface just in case, two results
- find a convo from two years ago
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Hiring warehouse (onsite SF) and customer support (remote) roles
@farmsteadapp
, delivering food to Bay Area doorsteps. Please RT, email hiring
@farmsteadapp
.com with resume and *short* note about yourself, availability.
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The main bottleneck is that most online grocery delivery is run out of large grocery stores.
Tough places to run ecommerce logistics.
Imagine if buying a shirt online from H&M meant someone had to go to a physical mall to shop for & buy it before delivering it to you.
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Grocery delivery has exploded.
Given that our model puts us in a position to scale to meet demand, it’s our responsibility to increase our service levels instead of pulling back, and we thank you for your patience as we do so.
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We can deliver to hundreds of households per day out of our SF hub (which is the size of a 7-Eleven) because we’re built specifically for ecommerce.
We’re now looking to expand to a new space 10x the size so that we can serve many thousands more each day across the Bay Area.
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At
@farmsteadapp
, we believe that grocery delivery should be an inexpensive, reliable utility, like opening the tap to get water.
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After reviewing many YC application drafts, here's my feedback for folks writing an application this week.
Reminder: deadline is Apr 22nd (Monday).
· less is more
· keep cutting text length by 50% until it feels uncomfortable to you but is still clear to reader
· use simple
At YC, we work with founders throughout the life of their startup and beyond, to build the world-changing companies of the future.
And we'd love to work with you.
The deadline to apply for YC Summer 2024 is Monday, April 22 at 8pm PDT — apply today at .
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You have ~50k grocery stores in the US & each can only do about 100-150 online orders per day. That’s ~7.5M deliveries per day as the total capacity for online grocery delivery.
But nearly the entire US is on lockdown, which is 128 million households.
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Wonder why your grocery delivery service is more expensive than going to the store? A thread👇🏽
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Farmstead will be launching in Miami soon!
In partnership with
@BeaconCouncil
and Mayor
@FrancisSuarez
, we're thrilled to bring fresh, nutritious groceries to the doorsteps of Miami-Dade county residents.
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Farmstead delivered our first orders to waitlisted Charlotte customers yesterday, 15 working days from getting keys in hand to our shiny new hub there.
Big launch coming soon!
First end-to-end
@farmsteadapp
test in Charlotte is happening tomorrow.
Exactly 7 working days from the day we got keys in hand to our brand new warehouse.
I love working side-by-side with this team.
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When the SF Bay Area ordered a shelter-in-place,
@farmsteadapp
’s order volume grew by 5x & average order size doubled almost overnight.
This meant 10x the items for our team to pick, pack & deliver.
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Being a PM at
@farmsteadapp
is the most leveraged tech role in the food industry.
Ex: We cut food waste from 35%+ at stores to sub 5% at our vertically integrated warehouses using data and code.
Broaden access to high quality food, rewire how food moves across the planet.
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YC's new "Launch Live" was so great to demo jo at. A room full of founders, impeccable vibes and compelling questions. Thanks so much for the opportunity
@garrytan
and
@ycombinator
team!
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Today, every online grocer is maxed out.
Amazon announced yesterday that even it’s stopped accepting new customers for grocery delivery.
Amazon puts new online grocery shoppers on a waitlist:
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The positive response has been inspiring, both from at-risk people in dire need of grocery delivery and from customers happy to wait longer knowing that the needy are getting served first.
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First end-to-end
@farmsteadapp
test in Charlotte is happening tomorrow.
Exactly 7 working days from the day we got keys in hand to our brand new warehouse.
I love working side-by-side with this team.
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Farmstead's also opening Nashville in Q1, our first new market in Tennessee!
Thank you for helping us get the word out,
@NashvilleScene
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In Feb, we launched
@farmsteadapp
’s unique same-day grocery model in the Chicago metro area (our fifth mkt) in just 10 days. This was right after three other ultrafast grocery delivery brands launched there a month prior. Here’s why…
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PSA for all Indian food fans in the Bay Area --
@farmsteadapp
just added:
+ locally ground fresh dosa and idli batter, delivered within hours across our 50 mi coverage area.
+ imported Indian snacks from Grand Sweets ;)
+ "Refill & Save" enabled for automatic weekly drops
Wanting to add this product to Farmstead Bay Area for an eternity, and I think we finally got it…
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The only way brick and mortar grocers can scale their delivery capacity is to open more stores. Many of them have decided to batten down the hatches on their existing business instead of expanding to meet the growing need.
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Like Amazon, we’ve had to institute a waitlist for new customers. However, failing to serve the elderly, those with limited mobility, or folks who are otherwise at-risk during this time kept us up at night.
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Farmstead remains open through the shelter-in-place directive, and we are hiring to double our team to bring groceries safely to SF Bay Area doorsteps. Apply here:
Please RT
Hiring warehouse (onsite SF) and customer support (remote) roles
@farmsteadapp
, delivering food to Bay Area doorsteps. Please RT, email hiring
@farmsteadapp
.com with resume and *short* note about yourself, availability.
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TikTok and Instagram are the new TV for an entire generation. Reaching folks on these platforms is key to building the next 20 years of digital demand.
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@farmsteadapp
With this
@joinforage
partnership, we now have a clear path towards eradicating American food deserts, while making online grocery a viable option for tens of millions of US households!
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Our job is to get food to our community in the safest & fastest way possible. It’s a responsibility that we take very seriously. That’s why we’re doing whatever it takes to increase the number of households we can serve everyday.
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End to end test complete in Raleigh/Durham, 4 days after we got keys in hand to our new hub there!
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Unfortunately, online advertising is a dark art and the cost of acquiring customers on Facebook and Instagram (the "FB user acquisition tax") has been trending up over the years. It’s not as simple as running the same ad everywhere on national TV.
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@paulg
YES. My kids enjoy creating comic strips on the iPad with me. I draw as they talk through the screenplay. They get to color the printed out pages later.
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Many people have asked us why
@liveink
and I did
@ycombinator
again for the second & third startup. For us, it wasn't about the $500K or demo day (though we do love those two aspects very much), but to answer three important questions.
· New startup = new constraints. What's the
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We’re hiring a product person to be part of our leadership team at
@farmsteadapp
!
Please DM me if you’re interested or know someone who would be a great fit.
More info here:
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Just in time for Thanksgiving, our 2nd
@farmsteadapp
hub is now open!
We went from 0 to launch in under 3 weeks. The first of many more to come.
@theobserver
covered the launch with a video of our hub manager sharing an inside look at the warehouse.
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Every
@farmsteadapp
grocery receipt now has a new section called “Eat This First”.
It tells you which perishable items in your order to eat before the rest, to help you cut down accidental food waste at home.
No more old food you forgot to eat in the back of your fridge!
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Walmart’s core demographic in the US is already very active on TikTok. They are the 70%+ of the population that are budget strapped, but lucrative customers.
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@hnshah
@Google
@mondaydotcom
@asana
@ClickUp_app
I suspect long term we will all be using Google Tables a lot more than we think we will (or want to). Especially if it integrates cleanly with Google Docs and we keep seeing it pop up as part of other colleagues’ workflows.
Also, very colorful UI for a Google product.
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Absolutely love
@ycombinator
!
We were lucky in S16 to get
@qasar
@justinkan
@nolimits
as our batch partners, who made sure we had the right foundation.
@paulg
's office hours back in S11 with my first startup were so critical to how Farmstead came out guns blazing years later.
Congratulations to the
@farmsteadapp
(YC S16) team! Farmstead raises $7.9M in new funding as it expands to a third city:
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2 weeks now
@pradeep24
@liveink
"while it can cost up to $10 million to open a new supermarket, Farmstead can launch a new hub for $100k in 4-6 weeks"
🤯🤯🤯
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In ‘99 my dad moved our family from India to the US.
We watched Alex Trebek &
@Jeopardy
every weeknight.
Learning US pop culture from scratch is hard, Jeopardy made it easier.
RIP Alex. Thank you for showing us that constant learning never goes out of style.
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Farmstead is scaling up our online grocery model nationally in 2021. We're thrilled to announce the indomitable Sara Custer (
@saramcuster
) as our new Head of Operations!
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Farmstead’s mission is to make fresh food accessible to every American. Our tech helps run efficient operations out of dark warehouses that cover a large 50 mile radius. Our customers pay the same/lower prices than stores, get fresh and local products, delivered for free.
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Tesla engineers/PMs who are reading this. I have data and context for repro, DM me!
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While Walmart’s customer base is comparable in size to Amazon, it was built over decades via store launches and TV. New digital efforts are doomed to fail to drive existing customers back due to a lack of emails or phone numbers in Walmart systems. This is an existential crisis.
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If Walmart miraculously has a stake in a huge international ad platform like TikTok, that may just stack the odds in their favor, especially with Kevin Systrom from Instagram on their board. This would be a brash, blunt move in their favor.
What’s not being discussed enough:
ByteDance / TikTok spent $1b on Musically + $1b on ads/content globally to build a platform with 2-3x the total time spent of Instagram in the US (per App Annie)
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The ground has shifted again for all of us in e-commerce, digital ads and consumer digital products. It’s going to be quite an eventful ride.
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P.S. If you're looking for Farmstead's first and true believers -
@VCMike
and
@raanan
at
@ResoluteVC
took this bet when the industry didn't get what we were doing. Any founder raising (pre)-seed, if they're not your first call, you're doing it wrong.
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Amazon is starting to push aggressively downmarket. By selling groceries out of physical stores and more often than not beating Walmart’s prices. They already have a robust 100M+ household base with emails and phone numbers that they can drive to any new initiative.
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Not to mention Walmart CEO Doug McMillan being one of the shrewdest capital allocators currently operating, even if his team winds up making strange digital moves sometimes (a topic for another day)
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Hiring a consumer growth PM for Farmstead. DMs open!
Being a PM at
@farmsteadapp
is the most leveraged tech role in the food industry.
Ex: We cut food waste from 35%+ at stores to sub 5% at our vertically integrated warehouses using data and code.
Broaden access to high quality food, rewire how food moves across the planet.
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At Farmstead, high margins, fresh food and a perfect online grocery experience for our customers are all aligned. We can't wait to bring this model to more US cities this year.
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40M people receive govt assistance to buy groceries each week.
They spend time & money on public transit, drive far to multiple stores just to feed their families. Online grocery doesn’t work for them, every option is more expensive than going to stores.
This is unacceptable.
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A nasty, expensive street fight is now looming on multiple digital platforms by Amazon and Walmart who both sell commodities and are trying to lock their customers into memberships.
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Our next
@farmsteadapp
market is the Raleigh / Durham / Chapel Hill Research Triangle and surrounding communities in North Carolina. We announced the waitlist today!
The Triangle is our third expansion market after Charlotte and SF Bay Area.
Also our second Carolinas market.
This Silicon Valley grocery startup’s first expansion outside of California will be in Raleigh and Charlotte.
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for years, our team was working on under-the-hood digital products for our warehouses. we are finally paying serious attention to our consumer mobile apps and… i forgot how fun this work is. can’t wait to show everyone what we are up to on android and iOS
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By the end of Q1,
@farmsteadapp
will be integrating EBT payment support via
@joinforage
into all of our open cities, allowing us to process the special cards required for SNAP payment - the first online-only, vertically integrated grocer to do so.
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The prediction & automation tech the Farmstead team has invented creates a viable mass-market online grocery option for the US and beyond.
Thank you for a clear distillation of our digital advantage,
@pymnts
team!
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Distance Learning week 3 —
Me: “What did you learn this morning?”
1st grader daughter: “Well, my stuffed dinosaurs were taking a nap and the Zoom call was very loud so I asked my teacher to keep it down.”
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Farmstead customers pay less than stores, skip multiple trips with one order, and get free delivery and no other fees. We are bringing this low-cost, highly accessible model to everyone, and are opening hubs all across the country in 2021!
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The grocery store itself is a gigantic showroom that needs to be filled, creating a huge amount of food waste across the entire food ecosystem.
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To catch up to Amazon, Walmart are digitizing their stores, pushing store pickup and Walmart+ (their Prime competitor) heavily.
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Thank you for having us on,
@RoadToAutonomy
@gbrulte
! Loved the opportunity to talk about Farmstead's early days, our team's thoughts on how code helps getting food to your door, and our plan for the next few years.
On the latest episode of The Road To Autonomy,
@gbrulte
sat down with Pradeep Elankumaran (
@pradeep24
), Co-Founder & CEO of
@FarmsteadApp
to discuss the future of online grocery delivery.
Listen today on your favorite podcast platform.
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A well-executed online grocery app drives more lasting customer behavior change in a 10 min session than a layout of a supermarket does in the 40 mins spent walking its aisles.
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How do you improve gross margins? By selling more fresh produce, dairy and other perishables
They're higher margin than non-perishables. But all that margin is lost when food rots sitting in distribution centers or at grocery stores' showroom floors.
Time to change this.
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Walmart now has to pull off a shift in strategy and execution similar to Facebook going from HTML5 to native mobile.
Our mobile app strategy turned out to be way more powerful than our web platform, and the revenue we lost from web games was quickly replaced by News Feed ads. Zuck didn’t give up on his platform aspirations, he just refocused his energy on the next paradigm shift in AR/VR.
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The
@joinforage
team offers an API for EBT payments, along with handholding to get through USDA approvals. Like us, they are VERY mission-driven.
@jnintal
and his cofounder
@victor_vector
were SNAP recipients personally for many years, and knew the ins and outs of the system.
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Farmstead’s approach to improving gross margins is data-led.
Grocery OS’ machine learning (ML) models make inventory decisions, based on multiple factors that tie directly to end-user demand. That's how we sell more fresh products, while cutting food waste.
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Our gross margins are in the mid to high-30%s, some 30-50% higher than traditional grocery.
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These gross margins show food waste, supply/demand dynamics, pricing, and competition on a national scale.
Traditional grocery stores aren't set up to predict demand from the end customer - the family buying and using groceries - and meet that demand with just enough supply.
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Rest in peace, Mahbod. He was an amazing human.
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Do you live in Half Moon Bay in the Bay Area? You can now get your weekly groceries from Farmstead!
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"My co-workers keep asking me things like, ‘Have you seen Tiger King?’ and I just want to yell: ‘Are you kidding me? Who has time to sit around and watch TV?’” via
@NYTimes
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Curious if other folks had this problem, we posted on Nextdoor. We got 200 sign ups in 2 days for a weekly milkman-like grocery delivery offering.
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When
@farmsteadapp
launched in Charlotte and Raleigh, we immediately heard from customers and local governments asking about EBT support, and whether we could help eradicate food deserts.
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👀
"When things return to normal, there will be a lot of people who don’t go back to shopping in-person." Whole Foods CEO John Mackey discusses Americans’ changing food-buying habits, leadership lessons from Jeff Bezos and the problem with lockdowns.
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Miami will be launched in late Q1, after our Raleigh/Durham and Nashville market expansions.
In addition to adding W2'ed warehouse and delivery jobs in Miami-Dade county, Farmstead's also exploring opening product development offices in Miami.
Our team's so excited!
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So now the path for Walmart surviving is clear:
1. Turn on pickup and delivery at all Walmart stores as fast as possible, connect them to new digital products and drive retained use.
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Food stamp basics: the Supplemental Nutrition Assistance Program (SNAP) is a federal program helping more than 40M Americans afford to put food on the table. It is the largest program working to fight hunger in America.
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2. Connect up Walmart’s own measurement tools at Walmart Media Group to TikTok and make more CPG marketing revenue, potentially adding extra margin when competitors advertise on TikTok.
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Walmart has stores with heavy TikTok audience overlap in two cutthroat markets: China (438 stores) and via their stake in Flipkart, India too.
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