Dispatch Coffee speeds up push to e-commerce
MONTREAL COVID-19 is accelerating a Montreal coffee retailer’s digital push to capture a slice of the $30-billion-a-year North American market for home-brewed java.
At Dispatch Coffee’s newest café, dozens of white cardboard boxes are stacked up near the window. Coffee bags are lined up on the counter, ready to be shipped.
That’s because the St-Laurent Boulevard. location — one of three that Dispatch closed in mid-March when Quebec Premier François Legault put the economy on pause — has been turned into a makeshift hub to process online orders.
Confinement, it turns out, goes better with coffee. Dispatch’s online sales more than tripled in March, and after a 65-per-cent gain in April, numbers for May are also expected to show an increase — which means the company will hit its 2020 digital sales target after barely five months, founder Chrissy Durcak said.
“With what is happening now, we’re kind of fast-forwarding our business plan by a year or two,” Durcak said in an interview. “COVID-19 accelerated a trend toward digital-first shopping, and also toward local and conscious consumption.”
Dispatch’s shift is typical of the changes brought about in retail by the pandemic, according to Louis Hébert, a management professor at the HEC Montréal business school.
Tobias Lütke, who runs the e-commerce behemoth Shopify, told financial analysts last month that the trends now reshaping the retail industry are occurring about 10 years ahead of schedule.
“COVID-19 shows the importance of having an omni-channel strategy,” Hébert said in a telephone interview. “A crisis is an opportunity to provoke change. COVID -19 is changing the way we see life, the way we interact, the way institutions function.”
Like other businesses, Dispatch is being forced to rethink “what the future of brick-and-mortar retail will look like,” Durcak said. “We don’t know if people will want to sit in cafés together.”
Dispatch started selling coffee on its website in February 2019, though Durcak actually began fundraising efforts a year earlier. It recently raised $1 million from an investor group led by the Anges Québec fund.
Durcak said she began considering online expansion after weighing the costs associated with a brick-and-mortar strategy, which she calls “the status quo pathway.”
“I just had an ‘a-ha’ moment and thought: Maybe the best way forward is to tackle a small segment of the at-home market, make it more ethical and target the specialty coffee buyer,” she said.
Durcak said Dispatch will use the new money to bolster its subscription-based coffee delivery service. It now counts more than 2,000 subscribers, up from 300 at the start of 2020, and the goal is to reach 5,000 by the end of this year and 15,000 by the end of 2021.
About 70 per cent of Dispatch’s subscribers are located in Quebec. Montreal customers now have access to two new shipping options — bike delivery and instore pickup.
In planning its digital expansion, Dispatch is following in the footsteps of online-only retailers such as Harry’s Razors or mattress seller Endy.
Its goal is to offer high-quality and responsibly traded coffee at a
We’re tying to figure out a way to take the sense of human connection we have in our cafés and bring it into the digital space.
fair price, from countries including Burundi, Guatemala, Peru and Rwanda.
After a stint as a barista, Durcak became an entrepreneur in 2012 when she launched an iced-coffee delivery service — by bicycle — and drove an espresso truck around town. Dispatch opened its first café in Mile Ex in 2014 and has since added locations on the McGill campus and on St-Laurent.
With coffee shops closed to onsite consumption until further notice, Dispatch team members have been kicking around ideas to enrich the online experience — such as allowing subscribers to chat via FaceTime with a barista who can help them brew coffee at home.
“We’re tying to figure out a way to take the sense of human connection we have in our cafés and bring it into the digital space,” Durcak said. “We’d like to humanize the online experience.”