- In the company's first earnings report as a publicly traded company, Boxed executives outlined a promising sales outlook for its business-to-business delivery unit and proprietary technology stack as workers head back to offices and retailers continue to ramp up their e-commerce operations.
- Boxed’s retail sales, on the other hand, are slowing as competition ramps up and shoppers return to stores. Boxed posted net retail revenue of $157 million for fiscal 2021, down 16% from the prior year.
- The company’s 5.3% decline in revenue underscore the difficulties that online-only grocers face as they come off the pandemic’s boom period.
Although Boxed has made its name as an online club retailer, the company is steering toward B2B sales and technology to fuel its business.
Chieh Huang, Boxed’s CEO, said Tuesday that product sales to business clients have increased as workers return to offices and that he expects that shift to continue over the course of this year. The company is focusing on categories that resonate with business customers and dedicating more marketing and sales investments to the channel, he said.
While Boxed’s consumer orders average just over $100, business orders are more than twice that, said Mark Zimowski, Boxed’s chief financial officer. “[It’s] a stickier and more profitable customer as well,” he said.
Boxed’s proprietary technology, which includes software as well as hardware like warehouse robotics, generated just over $20 million in revenue for the company in fiscal 2021. Huang sees significant potential to land new deals and grow within existing ones, noting that its experience as a retailer differentiates it from other technology vendors.
Early last year, Boxed landed an enterprise software agreement with Japanese grocer Aeon, and by the fall had scaled to 40 locations with the retailer’s Malaysian division. Huang said Boxed is discussing expanding the agreement to other areas of Southeast Asia and Vietnam.
Boxed’s retail business has dropped off after booming during the pandemic, with the number of active customers buying from the company down nearly 20% in 2021. Huang said Boxed plans to expand a third-party marketplace it recently launched that currently offers around 1,000 products in categories like health, baby and beauty care. It’s also looking at ways to expand MaxDelivery, the New York City grocery delivery service it acquired last year.
MaxDelivery currently sells Boxed’s private label brand, Prince & Spring, on its site, and Huang and Zimowski said the company is in negotiations to bring MaxDelivery to new markets. The executives said Boxed is learning from the service’s fresh, on-demand delivery model, and aims to incorporate dark store and fresh food fulfillment technology into its stack. MaxDelivery carries around 10,000 SKUs while Boxed offers around 2,000.
“You're definitely going to see some cross-pollination,” Huang said.
Founded in 2013, Boxed went public last year through special purpose acquisition company Seven Oaks Acquisition Corp. in a deal that valued the company at $900 million. The company’s earnings report didn’t do much to move its stock price, which sits at about $10 per share.