It may seem odd if you have not seen it, but buying products offered in a box stationed on the center console of a car during an Uber or Lyft ride is becoming a significant retailing format. Cargo, a company launched by partners Jeff Cripe and Jasper Wheeler has emerged as a leader in in-car retailing. Cargo has signed on more than 20,000 drivers who are able to supplement their income while selling carefully selected products. To order, passengers scan a QR code on the Cargo Box with their phone camera or enter their driver’s unique box code via the mobile menu (www.cargo.menu), select their desired items and check-out. Once the vehicle is safely stopped, the driver passes their passenger products directly from the Cargo display box. Bestselling products include snack bars, Rice Krispy treats, chargers, adapters, and beauty bundles.
Upon study, it does not take long to recognize that Cargo has done its homework and it is difficult to see a scenario in which it does not continue to grow. The company has hit on a win-win concept in that drivers can gain much needed additional income (Cargo sales have generated over $5 million in earnings for drivers) while consumers are offered products that match their needs at a specific place and point in time. After talking to co-founder and CEO Cripe, I was impressed by Cargo’s business model and believe that the company’s current and future success is rooted in three key aspects of their business model that have been effectively executed:
1) A Deep Understanding of How to Cater to Changes in the Consumer Environment
The growth of ridesharing has not only put pressure on the taxi industry but has also changed consumer consumption patterns as a result of many people becoming heavy users. Cargo grad was quick to see broader implications of spending more time in rideshares. Referring to these broader implications, Yale Grad Cripe states:
“Americans’ time spent in rideshare is the fastest growing third space, environments where we spend the most time following home and work. During this time in-car, passengers are browsing the internet, snacking, charging their phone or shopping. Cargo sees the opportunity to help passengers do these things better, and more easily.”
Cargo picked up on the fact that rideshare trips represent “dead time” in the eyes of some consumers and that by facilitating the ability to make need purchases, the service creates convenience and can be viewed as helping to recapture that dead time.
2) Using Data Analytics to Better Serve Customer Wants and Needs
Cargo’s product mix contains some staples, but also reflects local market preference, time of day, and seasonality. Distribution data takes selecting the products away from being guesswork and allows for customization of offerings. The company found, for example, that Red Bull sold very well in some markets in the morning, and in response made sure it was available then. Jeff Cripe sees this as being a key to success:
“By working closely with Uber and analyzing data from millions of passenger transactions, we’re accumulating valuable insights on the future of the in-car experience. Rideshare passengers and drivers don’t want additional clutter or commercialization. They want unique experiences and value-add services.”
By using data to understand what is working in what markets and with what drivers, Cargo effectively targets the product offering to the rider. It was via tracking sales data and offering it more widely that Olay beauty bundles became one of Cargo’s bestsellers – an opportunity that may not have been obvious without the company’s use of analytics. Recently, Cargo has expanded to offer discounts on tickets bought via SeetGeek. This is a clever idea as Cargo’s site can allow a consumer going into a new city a list of events they may be interested in and then offer the opportunity to purchase while using up time that might otherwise not be effectively used by the rider.
The analytics are also a critical factor in logistics, something that Cargo clearly considers a key success factor in the rideshare retailing business. By tracking sales closely and quickly, the company is able to replenish appropriately.
3) Understanding the Importance of Strategic Partnerships
In addition to having an exclusive contract with Uber, Cargo also partners with companies such as Kellogg’s, Procter and Gamble, Mars/Wrigley, and SeatGeek. The company is also careful to consider the perspective of the rideshare company as well as its drivers. Cargo’s business model clearly relies on effective relationships with these other entities, and the company has built this in as a consideration from the beginning.
Cargo is currently in 11 major markets in the U.S. and is poised to expand both domestically and internationally. It has attracted several major investors along the way so has the capital to expand. By capitalizing on the aspect of the business model described above it appears to have a very bright future.