Good Company: How Thrive Market Evolved on the Fly Once Covid-19 Arrived
As early as mid-January, Thrive Market co-founder and CEO Nick Green started seeing signals that grocery supply and demand were going to change in ways never seen before.
Members of the online natural foods store were beginning to order in large quantities—in patterns that preceded severe weather—which was typically confined to one part of the country. This time, that pattern was appearing across the nation.
In response, Thrive Market spent much of February building inventory in advance of expected record demand.
“Still, we underestimated how large the demand surge would be and couldn’t have guessed that the crisis would end up pressure testing literally every aspect of the business; from supply, to warehouse throughput, to site stability, to customer service,” Green, 35, says.
The company, founded in 2014 in Los Angeles, counted 800,000 members as of April 23 (100,000 of them joining since the Covid-19 crisis began). Although Thrive Market carries a wide range of groceries, they don’t stock produce and other everyday items, meaning customers typically bought about a third of their groceries on the site. With stay-at-home orders and other restrictions, that number ballooned to ordering 80%-100% of their overall groceries with the platform.
Thrive Market carries a range of grocery items—from organic vegetable chips to natural wines.
Prices start at $1.29 for an item like taco seasoning to $119.99 for higher-end purchases, including frozen meat boxes.
Thrive Market has seen a rapidly increasing market share, even before the coronavirus began. The company aims to be a middle vendor between a traditional brick-and-mortar and a specialty foods store. Being exclusively online, it has quickly evolved into a lifeline for those not comfortable leaving their homes in light of recent events.
“The dramatic increase in order volumes isn’t just from new members coming to the platform,” Green says, “with our existing members, we’ve seen an engagement increase of over 140%, meaning members are allocating more and more of their grocery shopping with us.”
Thrive Market had to manage supply and demand with significant disruptions in generally speedy order fulfillment times. Currently, the company is curbing order hours in a geographic system meant to ease demand on the teams fulfilling orders and restocking warehouse shelves. (Green stresses that the company has put extra measures in place to care for the wellbeing of these frontline workers as well).
The company has followed the suit of most businesses and shifted their non-essential personnel to working from home until restrictions ease. Green says that thanks to online tools, company communication and collaboration has never been stronger.
“More strategically though, we’ve also taken a step back, looking at what projects we will accelerate or de-prioritize to make sure we can continue scaling to meet the needs of more and more Americans who want to shop for healthy essentials online,” he adds.
WHAT’S THE GOOD?
Through all of this, Thrive Market has allocated significant resources toward helping those affected by Covid-19.
In March, the company launched the Thrive Market Covid-19 Relief Fund, which offers grocery stipends to healthcare workers and anyone who’s suffered major financial or health impacts from the pandemic. Each recipient also receives a Thrive Market membership (required to purchase from the site).
Site members have donated $190,000 in the last five weeks, and the company has raised more than $500,000 to date. On April 21, Green announced he’d be donating the remainder of his salary this year to the fund.
Photo: Thrive Market spent much of February building inventory in advance of expected record demand. Courtesy of Thrive Market