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Blue Apron looks to retail stores as competition eats into margins

When food company Blue Apron launched its ready-to-cook meal service, the key strategy was to avoid middlemen while delivering the recipes. Customers welcomed the innovative model for the convenience it offered – having the food ingredients delivered at the doorstep, which saved them the burden of purchasing grocery and setting the menu. Moreover, the kits come with all the necessary instructions for preparing the meal and details of those who supplied the ingredients.

Needless to say, the mounting competition and consolidation activities the food industry witnessed in recent times have had their impact on Blue Apron also.

The latter part of last year saw the challenges multiplying and the company’s market value depleted sharply. The major headwind to sustainability has been the falling customer base. Now, it has become inevitable for the company to adopt a new marketing strategy.

Meanwhile, the company’s attempts to bring innovation to its offerings, such as easy-to-cook meals and a diet plan for customers who are health conscious, failed to yield the desired results.

In what could be termed as a paradigm shift in its business model, Blue Apron has announced plans to sell products through third-party retail outlets, including supermarket chains and even retail channels operated by its rivals.

For instance, Walmart, one of Blue Apron’s potential partners, has been aggressively pushing its own ‘convenience meal-kits’ though stores across the country. Similarly, the raw food kits offered by AmazonFresh are well received by customers.

Shoppers can expect to pick their favorite Blue Apron meal-kits and other recipes from the shelves of local department stores later this year.

Blue Apron has announced plans to sell products through third-party retail outlets

According to the New York-based company, through the initiative, it intends to take advantage of its brand value and popularity of products, while tackling the pressing operational issues and distribution problems.

The extent of Blue Apron’s fiscal woes can be measured from the more than 75% loss its stock suffered since going public in the second quarter of last year, which is touted as one of the worst IPOs in 2017. On Friday, the stock made a modest gain in early trading, after the announcement.

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