Don’t buy into the logic that retail is “done.”
So says Ron Johnson, Apple’s former vice president of retail and the founder and CEO of Enjoy, which has raised $230 million since it came to market in 2014, including a $150 million Series C that wrapped at the end of August.
Enjoy is part of a new wave in retail elevating customer convenience to new heights, Johnson shared at the WWD Digital Forum in New York City Wednesday. The startup places a high premium on adding value during otherwise transactional purchasing occasions. For now, it’s heavily invested in the consumer electronics category—you have to start somewhere, said Johnson, who believes Enjoy could gain traction with high-end apparel and even department stores further down the line.
Enjoy is best described as a mobile retail store. It brings the store experience to customers instead of expecting people to find their way to a store.
Since it partnered with AT&T, customers of the wireless services provider no longer have new phones and gadgets shipped to their addresses. They either pick up purchases at an AT&T store, or an Enjoy employee brings purchases to their home, along with a sleek Rimowa case secreting value-added accessories that really highlight the holistic Enjoy experience.
The customer’s home, Johnson said, is a “neat setting for retail,” something many multi-level marketing companies learned decades ago. There, the Enjoy staffer, trained to be a category specialist, can assist with device setup, answer any questions and upsell customers with accessories, insurance and other add-ons. What’s particularly interesting is the upsell effect on Enjoy’s net promoter score across 1 million customers, which rises from an average of 87 to 92 for people who buy one additional item (like a screen protector, perhaps) and up to 94 when they purchase two more products.
The takeaway? That people appreciate when Enjoy saves them either the hassle of a trip to the store or the delayed gratification of waiting for accessory shipment to arrive, Johnson said. The service transforms the cost of shipping into a “major profit center” for clients, he added.
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That’s because the last mile in e-commerce happens to be the most expensive. Half of the price of apparel sold online is eaten up by last-mile costs, Johnson claimed. Enjoy reimagines what the last mile for a premium brand could look like in a digital world where customers order by SMS and expect on-demand same-day convenience.
And while online shopping is commonly regarded as the great disruptor of traditional retail, it’s merely the latest in a long line of disruptions, Johnson said, citing the succession of main streets, department stores, shopping malls and value retailers as some of the forces in commerce that have suffered at the hands of future-gazing nimble newcomers.
Now Enjoy, itself, aims to disrupt the status quo on more than one front.
Questioning the point of visits to brick-and-mortar locations when Enjoy delivers commerce to customers, Johnson said, “We’re now disrupting physical stores by helping you with the purchases that matter.”
Factor in the workforce angle, too, and the precariousness of the on-demand gig economy. Enjoy’s staff receive benefits starting on day one as well as stock in the company, Johnson noted. “We provide full-time jobs with career paths.”
Even warehousing isn’t safe from Enjoy’s disruptive ambitions. Whereas retailers commonly store inventory with warehouse operators nearby, Enjoy manages client inventory itself, and employees bring merchandise directly to the customer’s home, taking any leftovers back to what Johnson calls an “Enjoy House” where workers begin and end their 10-hour days.
Johnson described Enjoy’s target customer as “everyone who buys online.” Millennials love talking about the Enjoy service with their friends, moms with young children appreciate not having to wrangle a gaggle of kids and their accoutrement inside a store, and boomers like getting help when they need it, Johnson noted.
Because Enjoy is a service that piggybacks off existing businesses, it’s not concerned about driving volume or investing too much in marketing itself. Enjoy is after perhaps 10 percent of AT&T’s sizable store business, Johnson explained. Consumers receive Enjoy’s services free of charge, while the startup works out deals on a partner-specific business.
“We’re profitable for our partners,” Johnson said.