Data Dive

Data Dive, Early Fireworks Edition: Alphabet, Postmates, Costco And H&M


The year 2019 is winding down and with it the entire second decade of the 21st century. And while there are still roughly three weeks to go until the ball drops, the new year starts and the fireworks go off, it seems some firms last week wanted to get a jump on the action and decided to set off a few metaphorical volleys early. Some were surprising — the like big leadership change at Google — while others were a bit more worrying, like the cold front that has hit Postmates particularly hard.

But good or bad, it seems the ecosystem got its affirmative answer as to whether or not 2019 was going out with bang.

As for the biggest burst …

The Big Leadership Switch At Google

Just in time for a new decade, Alphabet’s leadership is getting a big switch. Last week, via blog post, Alphabet founders Larry Page and Sergey Brin announced they would be formally stepping away from leadership at the search giant. Taking their place at the top as Alphabet’s CEO will be Google CEO Sundar Pichai — who will also be holding on to his current gig as the head of Google.

“Going forward, Sundar will be the CEO of both Google and Alphabet. He will be the executive responsible and accountable for leading Google, and managing Alphabet’s investment in our portfolio of Other Bets,” the post said. “We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as board members, shareholders and co-founders.”

For his part, Pichai said that the new position won’t affect the way things are done at Alphabet and that the day-to-day structure will remain largely unchanged as will the “deep work we’re doing to push the boundaries of computing and build a more helpful Google for everyone.”

Page and Brin founded Google in 1998 and grew it from a simple search engine to one of the largest tech companies in the world that now has a hand in everything from driverless cars to internet-enabled balloons that provide connectivity to far-flung, rural places around the globe, to artificial intelligence voice assistants and beyond.

“Today, in 2019, if the company was a person, it would be a young adult of 21, and it would be time to leave the roost,” the founders said. “While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents — offering advice and love, but not daily nagging!”

Postmates’ Profit Problem

It was a rough week for Postmates employees as reports hit the wires that the delivery company has officially laid off dozens of employees and shuttered its Mexico City office. But Mexico City employees weren’t the only ones who got the sack this week — reportedly workers were axed from the company’s headquarters in San Francisco as well as from Los Angeles, Nashville, Tennessee and other offices.

“We made the difficult decision to end operations in Mexico City as we focus on our continued growth in the U.S.,” a Postmates spokesperson said in an email to media. “We continually review our business to ensure that staffing is aligned with current business needs and have made small adjustments as a result.”

However reluctant the firm was to go forward with the layoffs, the plan to do it had a codename, “Project 710,” which internal sources indicated “signifies closures and new beginnings.” A source also told reporters that Postmates, which competes with Uber, DoorDash and Grubhub, is shopping around for a buyer.

The layoffs come shortly after the firm raised $225 million in a funding round in September and filed paperwork for a possible 2020 initial public offering (IPO). But the spotlight on the financial hardships of Uber and Lyft, combined with WeWork’s botched IPO and mismanagement has left investors nervous and looking for solid prospects for profit.

Postmates Co-Founder and CEO Bastian Lehmann noted last month that GrubHub’s difficulties were not an indicator of struggles every firm is having in the market, and that it is incumbent on firms to set themselves apart from one another as rivals like DoorDash, Uber Eats and Seamless pack into the busy food delivery space.

“The right way to think about the space is not a winner-take-all market,” Lehmann said. “You will have different brands in the space that appeal to very different customer bases, based on the merchants that they provide access to.”

Postmates is now hoping it can hang on and keep investors interested long enough to become one of those brands.

Some Ill-Timed Technical Difficulties

There is no good time for eCommerce website to have widespread outages and down periods — but there are especially bad times. Both Costco and H&M learned that the hard way during the Black Friday-Cyber Monday shopping extravaganza when their digital commerce tech failed during exactly the wrong time period.

Costco lost its whole website entirely for a short time early on Thanksgiving Day following several hours of “intermittent slow load and transaction times” starting Wednesday, according to website performance monitor Catchpoint. As a result, Costco announced on the site that “all Thanksgiving Day-only promotions have been extended into Friday, November 29th, WHILE SUPPLIES LAST.”

But Catchpoint found Costco was not alone during the weekend when it came to time hiccups. H&M’s website was down for less than 5 minutes on Thanksgiving morning, but also experienced intermittent outages on Black Friday morning.

Outages were not the only issues plaguing retailers during the long shopping weekend — The Home Depot and Nordstrom Rack customers experienced website “slow load times” during the middle of the day on Thanksgiving and Friday respectively.

And while a few minutes or hours down may not seem like a terribly big deal in the grand scheme of an entire holiday shopping season, according to ChannelAdvisor, a software platform for retailers, the losses can start to add up quickly. By their estimates, retailers lose about 4 percent of a day’s sales each hour that a website is down. During major spending periods, like the Thanksgiving shopping weekend, that can add up to some big losses pretty quickly.

So what did we learn last week? Keep your eyes open during the last few weeks of the year, because you never know what big changes the big players might be trying to sneak in before the decade ends and the real fireworks start.

Until next week.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.