The COVID opportunity
We are heavily constrained, again it’s an odd quarter because generally the biggest uncertainty we have this customer demand, and with the order and how much of it they’ll order. Demand has been strong, the biggest questions we have in Q2 are more about ability to service that demand and that is the products that people are ordering in a full way, not blocking or making it hard to find non-essential items, increasing marketing, and everything else.
So I think the challenge is really on everything besides the top line. And top line is certainly not to be taken for granted. There’s always the importance of having attractive offerings in stock for customers. But usually things you can count on, the cost structure, the ability to get products, yes, your capacity for shipping and delivering, those are usually things that you can take for granted, and in this quarter, you can’t. That’s really where the uncertainty is driven.
I think this applies to every business that is experiencing tremendous growth during this pandemic. Almost all the essential businesses, especially food and grocery delivery startups, are running at their full capacity to cope with the demand. But as Dave said this demand and growth are uncertain.
What sticks after this pandemic is how people experienced your service (reliability) and product (quality). It’s a great opportunity if businesses start using this uncertain growth to improve that customer experience. It’s rare to see growth like this and any business which is not constantly experimenting to improve things is definitely missing out big time or will soon.
If we think about it, all these essentials are not really price-sensitive and the only differentiator is the reliability of service. This makes it easy for customers to shift to another service when things are bad. The only job of any business now is to make sure customers are not thinking about it.
EDIT: [May 27, 2020] Updated earnings call source link.