2020 has been a year like none other. As we approach its end, I want to take a moment to review all that we’ve achieved in this remarkable year. None of it would have been possible without our partners, who trusted us to get through this year together. Thank you for your partnership. Here’s to growing together in the new year!
In December 2019, I shared a blog post recapping my first 90 days at Kaspien and our vision for 2020. In that post, I outlined six goals:
While 2020 went in directions that we could not predict, I’m proud to say we delivered on all six fronts.
We’ve brought more services into our platform, grown our net revenue, grown our subscriptions business, improved operational efficiencies (in large part through automation), invested in our customer experience lifecycle, and added more programs and benefits for our employees.
In fact, even as turbulent as the year has been, we saw many successes in 2020:
We started our 2020 fiscal year with a bang. On February 21, 2020, we secured $25 million in new financing to expand and enhance our offerings. In April, we raised another $5.2 million in funding as our parent company, Kaspien Holdings, shifted its entire focus to ecommerce.
On March 16, 2020, our corporate office shifted to working from home. Many of our employees took desktops and monitors home, but left belongings on their office desks with the expectation of being back in a few weeks. Oh, how little we knew then.
But we adapted, quickly and efficiently. We left the office on a Friday, and by end of day Monday, we had 150 employees working from home while maintaining their duties and delivering results for our partners.
We had our share of bumps along the road, and remote work certainly came with a learning curve for us as an organization, but I am very proud of how well and how quickly our employees adapted.
In late 2019, we launched our Amazon campaign management software, AdManager, in beta. In April 2020, we launched our full release.
AdManager originated from internal needs – over our history, Kaspien has served over 4,000 brands as their ecommerce partner, which means that our advertising portfolio quickly grew. To successfully scale, we had to automate that process without sacrificing performance.
We spent over 4 years and over 5,000 manhours developing AdManager, refining and enhancing it to better meet our internal teams’ needs. We built AdManager into something truly remarkable, and eventually, we realized that others might like this software too.
Even faced with a pandemic, this year saw protests across the nation drawing attention to violence and racism that still haunts our country. In late June, we added a seventh “leadership principle” to guide our company culture and vision:
We believe in the power of diversity and teamwork.
While Kaspien has always welcomed diversity, it was done too passively. With the addition of this leadership principle, we made attention to diversity part of our company DNA. It is shifting from a passive welcome to a conscious consideration that permeates our culture and work.
On September 3, 2020, we announced our rebrand from “etailz” to “Kaspien.” Rebranding was exhilarating, full of opportunities and potential risks. We had built our reputation as etailz, but we had also outgrown the name as our company evolved to offer so many more services than just online retail. It was a risk, but one we believed worth taking.
Three months later, I’m proud to report that our team didn’t miss a beat. Operations and business expansion continued uninterrupted, and our marketing department did a phenomenal job implementing the rebrand across all our assets in one fell swoop.
In October 2020, we had the honor of being named as one of the best places to work in the Inland Northwest by the Journal of Business and Best Companies Group.
This award recognizes our progress toward the sixth goal I designated at the end of 2019: renew focus on our people.
In the past year, Kaspien has instituted many new employee engagement programs, such as a Charitable Contribution and Giving Committee. This committee is focused on giving back to our Spokane community, and recently organized a diaper drive for the local Vanessa Behan Crisis Nursery after the committee became aware that the nursery was unable to host the annual diaper drive themselves due to COVID-19.
The fourth quarter of our fiscal year is still underway at the time of this post’s publication, but we’ve published our earnings for the first three quarters of FY20. In each quarter, Kaspien exceeded our target EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), testifying to our strong operating performance.
In the third quarter, we reported a 36% in net revenue year-over-year and our Gross Merchandise Value (GMV) increased 127% year-over-year. Before that, in the second quarter, our total revenue increased 23.5% year-over-year and our GMV increased 46% year-over-year.
We have been continually improving, and it’s showing.
Over the course of the year, we continually expanded our offerings to include more self-service and managed service software solutions, US Tax compliance for online sellers, and an unauthorized seller removal service. We also expanded our FBA warehouse network to include 7 facilities across the US and were among the first approved users for Walmart’s new FBA-like service, Walmart Fulfillment Services (WFS).
As we’ve alluded to in our quarterly earnings reports, 2020 was all about building a strong foundation by centralizing our services into a platform. We’ve made tremendous progress on that initiative.
As we look ahead to 2021, our focus shifts to scaling everything we’ve developed. We will expand to new markets and marketplaces, upgrade our existing software and services and release new offerings, and serve new clients. Kaspien is becoming the industry leader in Marketplace Seller Services.
Like last year, we’ve outlined our goals as a list of strategic themes we will focus on throughout the year:
1. Centralize our Platform
We will continue creating a centralized location for brands to access everything they need to flourish in online marketplaces, including reporting and management for sales, inventory, marketing, and more.
2. Expand Our Platform
We will increase the number and quality of features, products, and services in our platform, making Kaspien truly a one-stop shop.
3. Continue Improving Tailored Offerings
Each brand has different circumstances and different goals, so a “one size fits all” approach is simply a disservice. To be the ultimate online growth partner, we must continue to enhance our ability to tailor strategy and services for each brand.
4. Build Upon Our Category Expertise
As part of offering tailored solutions, we will focus on deepening our expertise in key categories so we can deliver ever greater results for our partners. Kaspien has and will continue to serve brands of every product category. We are not diminishing our breadth; we are deepening our knowledge.
5. Expand to New Marketplaces
Amazon is the dominant marketplace in the US, but other marketplaces offer immense potential that should not be ignored. We will continue expanding our offerings on other major marketplaces, including Walmart, Target, and many more.
6. Expand Globally
New marketplaces are springing up around the globe. To better meet the needs of current and future partners, we will expand our operations into additional markets to become the global leader in marketplace services.
7. Expand through Inorganic Growth
As we continue to scale, we will seek opportunities to grow Kaspien organically and inorganically. We will consider strategic partnerships and acquisitions that enable us to improve our existing offerings, add new offerings, and serve new audiences.
8. Create and Enhance Automations
We seek to empower brands through automation. By offboarding repetitive, manual tasks, we free brands to focus on more ambitious projects and strategy, without sacrificing quality.
9. Optimize Our Value Chain
We will continue to refine our internal structure and processes with the end goal of accelerating progress and improving outcomes for initiatives that add the greatest value for our partners.
10. Diversify Our Value Chain
We intend to support multiple corporate partners and tool providers on our platform, cultivating a robust ecosystem of brand services that delivers even greater value to our partners.
11. Continue Operational Control Focus
We’ve been EBITDA positive for the last three-quarters, which means we’re maintaining profitability and sustainability. We will continue increasing operational efficiencies across our business.
Our goals are built around adding value for our partners. You’re the reason we come to work every day. We have seven leadership principles, and two of the most important are being partner obsessed and delivering results. 2021 will be all about continuing to uphold those principles.