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Tag Archives: Whole Foods

Airbnb has well and truly disrupted the world of travel accommodation, changing the conversation not just around how people discover and book places to stay, but what they expect when they get there, and what they expect to pay. Today, one of the startups riding that wave is announcing a significant round of funding to fuel its own contribution to the marketplace.

Domio, a startup that designs and then rents out apart-hotels with kitchens and other full-home experiences, has raised $100 million ($50 million in equity and $50 million in debt) to expand its business in the U.S. and globally to 25 markets by next year, up from 12 today. Its target customers are millennials traveling in groups or families swayed by the size and scope of the accommodation — typically five times bigger than the average hotel room — as well as the price, which is on average 25% cheaper than a hotel room.

The Series B, which actually closed in August of this year, was led by GGV Capital, with participation from Eldridge Industries, 3L Capital, Tribeca Venture Partners, SoftBank NY, Tenaya Capital and Upper90. Upper90 also led the debt round, which will be used to lease and set up new properties.

Domio is not disclosing its valuation, but Jay Roberts, the founder and CEO, said in an interview that it’s a “huge upround” and around 50x the valuation it had in its seed round and that the company has tripled its revenues in the last year. Prior to this, Domio had only raised around $17 million, according to data from PitchBook.

For some comparisons, Sonder — another company that rents out serviced apartments to the kind of travelers who have a taste for boutique hotels — earlier this year raised $225 million at a valuation north of $1 billion. Others like Guesty, which are building platforms for others to list and manage their apartments on platforms like Airbnb, recently raised $35 million with a valuation likely in the range of $180 million to $200 million. Airbnb is estimated to be valued around $31 billion.

Domio plays in an interesting corner of the market. For starters, it focuses its accommodations at many of the same demographics as Airbnb. But where Airbnb offers a veritable hodgepodge of rooms and homes — some are people’s homes, some are vacation places, some never had and never will have a private occupant, and across all those the range of quality varies wildly — Domio offers predictability and consistency with its (possibly more anodyne) inventory.

“We are competing with amateur hosts on Airbnb,” said Roberts, who previously worked in real estate investment banking. “This is the next step, a modern brand, the next Marriott but with a more tech-powered brain and operating model.” These are not to be confused with something like Hilton’s Homewood Suites, Roberts stressed to me. He referred to Homewood as “a soulless hotel chain.”

“Domio is the anti-hotel chain,” he added.

Roberts is also quick to describe how Domio is not a real estate company as much as it is a tech-powered business. For starters, it uses quant-style algorithms that it’s built in-house to identify regions where it wants to build out its business, basing it not just on what consumers are searching for, but also weather patterns, economic indicators and other factors. After identifying a city or other location, it works on securing properties.

It typically sets up its accommodations in newer or completely new buildings, where developers — at least up to now — are not usually constructing with short-term rentals in mind. Instead, they are considering an option like Domio as an alternative to selling as condominiums or apartments, something that might come up if they are sensing that there is a softening in the market. “We typically have 75%-78% occupancy,” Roberts said. He added that hotels on average have occupancy rates in the high 60% nationally.

As Domio lengthens its track record — its 12 U.S. markets include Miami, Los Angeles, Philadelphia and Phoenix — Roberts says that they’re getting a more select seat at the table in conversations.

“Investors are starting to go out to buy properties on our behalf and lease them to us,” he said. This gives the startup a much more favorable rate and terms on those deals. “The next step is that Domio will manage these directly.” The most recent property it signed, he noted, includes a Whole Foods at the ground level, and a gym.

Using technology to identify where to grow is not the only area where tech plays a role. Roberts said that the company is now working on an app — yet to be released — that will be the epicenter of how guests interact to book places and manage their experience once there.

“Everything you can do by speaking to a human in a traditional hotel you will be able to do with the Domio app,” he said. That will include ordering room service, getting more towels, booking experiences and getting restaurant recommendations. “You can book your Uber through the Domio app, or sync your Spotify account to play music in the apartment.

And there are plans to extend the retail experience using the app. Roberts says it will be a “shoppable” experience where, if you like a sofa or piece of art in the place where you’re staying, you can order it for your own home. You can even order the same wallpaper that’s been designed to decorate Domio apartments.

Ripe for the booking

Although Airbnb has grown to be nearly as ubiquitous as hotels (and perhaps even more prominent, depending on who you are talking to), the wider travel and accommodation market is still ripe for the taking, estimated to reach $171 billion by 2023 and the highest growth sector in the travel industry.

“Airbnb has taught us that hotels are not the only place to stay,” said Hans Tung, GGV’s managing partner. “Domio is capitalizing on the global shift in short-term travel and the consumer demand for branded experiences. From my travels around the world, there is a large, underserved audience — millennials, families, business teams — who prefer the combined benefits of an apartment and hotel in a single branded experience.”

I mentioned to Roberts that the leasing model reminded me a little of WeWork, which itself does not own the property it curates and turns into office space for its tenants. (The SoftBank investor connection is interesting in that regard.) Roberts was very quick to say that it’s not the same kind of business, even if both are based around leased property re-rented out to tenants.

“One of the things we liked about Domio is that is very capital-efficient,” said Tung, “focusing on the model and payback period. The short-term nature of customer stays and the combination of experience/price required to maintain loyal customers are natural enforcers of efficient unit economics.”

“For GGV, Domio stands out in two ways,” he continued. “First, CEO Jay Roberts and the Domio team’s emphasis on execution is impressive, with expansion into 12 cities in just three years. They have the right combination of vision, speed and agility. Domio’s model can readily tap into the global opportunity as they have ambition to scale to new markets. The global travel and tourism spend is $2.8 trillion with 5 billion annual tourists. Global travelers like having the flexibility and convenience of both an apartment and hotel — with Domio they can have both.”

Read more: https://techcrunch.com/2019/12/17/domio-raises-100m-in-equity-and-debt-to-take-on-airbnb-and-hotels-with-its-curated-apartments/

Employees described increasing pressure to push Amazon Prime deals and memberships, understaffing and increased workloads

Since being bought by Amazon two years ago, employees at Whole Foods say their working conditions have declined markedly amid pressure to push Amazon Prime deals and memberships, plus widespread understaffing, increased workloads and labor budget cuts.

Amazon announced in June 2017 it would buy Whole Foods. In interviews with 24 Whole Foods employees across the US, workers described an increasingly pressured environment and the erosion of Whole Foods corporate culture.

Workers interviewed were reluctant to speak on the record for fear of retaliation.

Amazon has changed the company so much to the point where I cant recognize Whole Foods any more, said one Whole Foods worker in California. It sends chills down my spine every day to see the store I love bombarded with everything and anything Amazon, from the Prime signs, Amazon lockers, Amazon meal kits and the Prime shoppers.

In September 2018, a group of current and former Whole Foods workers organized Whole Worker, a group for workers to organize collectively to push for improved working conditions.

In a mass email sent to Whole Foods employees by over a dozen current and former workers with Whole Worker on 21 June, the group characterized Whole Foods relationship with Amazon as a subordinate to Amazon, where workers are primarily used to sell Amazon Prime memberships and deals.

A Whole Foods team member in the south-west US said: Cashiers are currently trained to ask each customer if they have Prime. In the fall, they are rolling out signing up for it at the guest service desk. They are aiming for 35% of product purchases to be items on Amazon Prime sales, even if the guest doesnt have Prime.

A Whole Foods team leader who runs a meat department in the north-east US noted training for new employees now include sections about Prime benefits for customers. It had nothing to do with customer service, expectations or requirements. Simply just the benefits of Prime, from everything to answering questions on Kindle, Amazon tablets, Amazon Fire Stick and Amazon music, they said.

A Whole Foods worker in the Pacific north-west region claimed Amazon kiosks are replacing Prime lockers in Whole Foods stores throughout the region, where Prime customers can drop off and pick up Amazon orders.

Whole Foods is not an independent company that has an investment or something from Amazon. It is a grocery retail outpost for Amazon, and its there to push online sales, Prime memberships and Prime devices, they said.

A Whole Foods representative told the Guardian in an email: Our Team Members are the heart of Whole Foods Market, and we are proud to continue to have one of the highest ratios of full-time/part-time employment and hourly starting wages in the industry. We have not cut labor hours as a result of increasing minimum starting wage to $15 per hour.

However, numerous workers in different Whole Foods departments said theyre pushed to prioritize Amazon-related tasks over everything else.

We must have large signs over our Prime deals, additional signs on the displays and samples or we get asked about it constantly, said a Whole Foods team member who works in a specialty department in the Rocky Mountains region.

Several Whole Foods workers told how one of the Amazon-related changes is that understaffing has become the norm. Full-time workers said their hours have regularly been reduced from 40 a week to 35 to 37 in the wake of Amazon enacting a $15 minimum wage for all its employees thus rendering any rises in pay almost non-existent.

I have worked for the company for over a decade and have seen the most recent crunch of labor since the $15 hour minimum was implemented, said a Whole Foods employee in the midwest.

The worker claimed their schedule was cut to 27 hours a week, despite being a full-time employee and working in an understaffed department. They continue to give us more and more tasks and more checklists and things that need to be done, but our hours continue to be cut.

A full-time Whole Foods team member in the mid-Atlantic region noted: Now Im usually scheduled 36 to 37 hours a week since the Amazon minimum wage increase.

Another Whole Foods worker in California told the Guardian: Our store has been labor deficient or compressed since the winter of 2018. We were successful, busy and a great environment. Then we stopped hiring, cut hours, moved people around to patch holes.

A buyer and supervisor for Whole Foods on the west coast said: We dont have the manpower to get product on the shelves for customers, and we dont have time for customer service because we are constantly playing catch-up.

Read more: https://www.theguardian.com/business/2019/jul/16/whole-foods-amazon-prime-working-conditions

Read more: http://www.dailydot.com/upstream/stitches-arrested-whole-foods/

With its locally sourced orchids and imaginatively priced organic diapers, the grocery store is a natural fit for Brooklyns painfully fashionable neighbourhood

Its clear by now that Whole Foods march toward benevolent, organic, feel-good corporate dominance cannot be stopped.

The grocery store or Americas healthiest grocery store, as it prefers to be known has more than 435 outlets across the US, Canada and the UK.

And, just last month, Whole Foods plopped down its latest outlet in Williamsburg, Brooklyn.

Williamsburg is a place that, depending on your point of view, is a hub of culture, music and art, or a place that is home to wealthy ad agency workers who want to live in lavish, brand-new condos while still enjoying the authenticity of Brooklyn life.

Happily, both perspectives make the neighbourhood prime feeding ground for Whole Foods, given the companys target audience: an audience that wants the farm-to-table produce and aura of philanthropy you get at a farmers market, but with more attractive packaging and nicer shopping baskets.

On Friday morning the new store was predictably awash with customers. Whole Foods prides itself on offering local produce, and the Brooklyn plant is no exception. Upon entering, the first thing I saw were some beautiful white orchids. The second thing I saw was a sign above them. Grown in New Jersey, it said.

It didnt stop there. There was a cabinet labelled baked goods. It turned out some of the baked goods had been baked right here in Brooklyn. There was even a picture of the bakers. The store features more than 800 Brooklyn-made products from more than 75 Brooklyn suppliers.

As I headed downstairs, into the belly of the beast, the store opened up. It is cavernous at 51,000 square feet. As you come down the escalator there is a sign bearing Whole Foods higher purpose:

Nourishing the health and well-being of people and planet by being the authentic purveyor of food for the greater good.

Its certainly a noble idea, but I rather doubted the sincerity of the message, given it was displayed on one of those letter boards where you can change what it says at any given moment, like messages children craft on refrigerators with magnets.

Moving forward, I encountered the fruit and veg section, where I was met by 11 different types of onion.

Suffice to say, it is extremely comprehensive. Comprehensive and local. You can buy organic red onions from New York. Organic yellow onions from New York. Horseradish root from New Jersey.

That said, there is foreign stuff too. Apples from Argentina. Pears from New Zealand.

Sometimes two of the same products, one produced locally, and one produced abroad, are positioned next to each other, enabling shoppers to secretly vent their xenophobia.

Screw you France, Im buying the New Jersey onion. Get stuffed, Holland, my Savoy cabbage is coming from Vermont.

If one of the staples of Whole Foods is healthy, organic produce, another is the pricing. It is expensive. You can buy orange juice a 16oz orange juice for $7.99. Or 27 organic diapers for $11.99. Or 15oz of chia seeds for $13.99.

If it proves anything, its that people will pay whatever you charge them. Whole Foods could double the price of its sprouted buckwheat acai blueberry cereal and people would probably still buy it. Just as long as it still contains organic maqui, Himalayan crystal salt and coconut nectar.

On Friday Manon Hallay, a 21-year-old dance student and Williamsburg resident, was among the Whole Foods patrons.

Its great, she said as she emerged from the store, blinking in the sunlight. But its so expensive.

Hallay claimed to have been buying breakfast food. I looked in her bag. It contained one loaf of bread and a bottle of lemonade.

Nola Romano, 41, appeared to have done a more comprehensive shop.

Meat and vegetables, she declared when I asked what she had purchased.

Because theres not many places to buy good vegetables round here, she said. Or meat.

Romano was dressed in leggings, sneakers and a sports top. Whole Foods is perfectly placed to draw in the healthy-lifestyle crowd, given its location next door to an Equinox gym think a normal gym, but priced like maintaining a racehorse and many of the customers seemed to be dressed in workout gear. But appearances can be deceiving.

Oh its a facade, Romano said when I noted her sporting attire.

Ive done no exercise today. Except carry these, she said, motioning to her meat and vegetable bags.

Romano also noted the high prices although if you buy their store brands its cheaper but a look around Brooklyn Harvest Market, a couple of blocks away, suggested Whole Foods prices arent that different from other local options. The butternut squash was 50c cheaper in Harvest Market, sure, but then the organic diapers were $2 more. The chia seeds were $4 less in Harvest, but Whole Foods offered cheaper yellow onions.

So theres competition. But it seems nobody else does the local produce thing quite like Whole Foods. Or at least nobody else assails their customers with local produce propaganda quite like Whole Foods.

And its not just that you can find over 30 cheeses made within 100 miles of here. Its that Whole Foods is really good at creating an environment where people want to spend time.

In the Williamsburg store theyve created a faux neighborhood, like on a TV set where theres a precious manicured street with fake signs and fake store fronts. You can stand outside Fine Cuts butchers and watch a real-life butcher handling his meat. You can sit in the N4 taproom and drink a local IPA while enjoying the sports on TV. You can flip through the New York Times style section as you drink a latte in the coffee shop.

Or maybe youd like to pay a visit to the smoothie bar. Or visit Lukes Lobster tail cart an old-fashioned wooden thing where someone who may or may not actually be called Luke sells lobster tails from Maine. You could even stop in at the vegan and paleo parfait bar for a chat over some chickpeas. The resulting atmosphere is more food hall than big-box grocery store.

It is relaxing. It is homey. It is aspirational. It feels like a community.

It isnt, though.

Are you trying to sell me something? If youre trying to sell me something then dont fucking talk to me, said a woman leaving the store as I trotted over with my notebook.

After spending an hour in Whole Foods I felt I knew how to talk to their customers. I opened my mouth to explain.

Im locally sourced! I wanted to say. Im 100% organic! Im expensive!

I didnt get the chance. Im in a hurry, the woman called over her shoulder as she ran across the street.

Not even Whole Foods can ensure every customer leaves in a good mood.

Read more: https://www.theguardian.com/business/2016/aug/13/whole-foods-arrives-williamsburg-brooklyn