retail news in context, analysis with attitude

MNB took note yesterday of a report from RetailNetGroup that sketched out the scenario through which AmazonFresh is likely to expand, and that the metrics for its success may be different than anticipated because it can offer Amazon all sorts of of strategic advantages that work to its long term advantage. (You can read the story here.)

My comment:

This is the argument that MNB has been making for months ... that AmazonFresh may have different metrics for success than other programs that appear to be directly competitive, and that the ultimate battle may be between it and Walmart.

It seems clear that an AmazonFresh expansion is about to happen, and that it will have impact. Which is why food retailers need to be focusing on how to make themselves competitive in this space, and how to create differential advantages that will short-circuit Amazon's efforts to appropriate their customers.

And they need to do so now.

This prompted MNB reader Mike Spindler to write:

Couldn’t agree with you more Kevin.
Since day one, the first hurdle that online grocery sales (OGS) has faced is a cautious corporate grocery group.  

In every case where the grocer has tried OGS, based on my experience at MyWebGrocer, they attract new customers, solidify loyalty from current customers, grow basket size, and make money….good money.

They have to be smart  (offer store prices, full variety and stellar service) and they have to pay continuous attention to the development of the business (marketing) but a good program, well run is a great offense for any grocer to run against any interloper. 
The first hurdle needs to be overcome first!


Full disclosure: Mike Spindler is a former MyWebGrocer senior executive. And MyWebGrocer is a longtime and valued MNB sponsor.

Yesterday, MNB took note of a Business Insider report that Eric Schmidt, the chairman of Google, is predicting that by 2020 every person on the planet will be connected to the internet.He's getting some pushback on the prognostication: "In other words, he believes that in just seven years, the Internet will be accessible even in the parts of the world with no electricity that are struggling with far more basic things, like clean water," Business Insider writes.And yet, the story suggests, "it's not as far-fetched as it sounds. For instance, Google supports a project called GEEKS Without Frontiers which is creating low-cost technology to bring wireless Internet to places where traditional wired Internet isn't possible.Samsung is working on a project that has turned old shipping containers into solar-powered, Internet connected classrooms for kids in Africa, with the plan of serving 2.5 million students by 2015. And that's only two projects. While it's hard to believe that every person in the world will have access to the Internet by 2020, many more of them will."

One MNB user responded:

The real question surrounding 100% global internet availability is heavily influenced by internet affordability.  As pointed out, Samsung and others are working on innovation around connectivity (availability).  However, as one who’s working in the southern African countries these days, it seems unlikely that widespread affordability is likely. Affordability is the main concern.

The World Economic Forum (WEF) released its Global Information Technology Report 2013 on 10 April, revealing that South Africa’s mobile prices are among the highest in the world. S Africa ranked 117 out of the 144 countries measured. And, mobile, as you know, will be the key access vehicle to the internet. Therefore, the next level of innovation in developing markets needs to be around affordability, if the 100% global availability is to be realized.

I enthusiastically reviewed "City of Thieves," by David Benioff, the other day, which led MNB user Philip Bradley to write:

I read "City of Thieves" a couple of months ago and agree fully--what a terrific story, and with a number of complex layers beneath the surface.  A great book--glad you had the same experience.

MNB user Brendon Cull chimed in:

Saw your note about “City of Thieves.” It was a wonderful story.

If you haven’t read it, check out “Billy Lynn’s Long Halftime Walk.” Just won the National Book Award. It is a spot-on look at our society/culture in the years during the Iraq war. Funny and heart-wrenching. 
And if you like memoir, check out Michael Hainey’s “After Visiting Friends.”  I read it in one sitting and it is still rolling around in my mind.  A great book.

Thanks for the recommendations.

I have the Hainey book on my kindle, and will add the other one to my list.

Yesterday, I wrote about a Washington Post column by Gene Weingarten in which he critiqued a new online section of the New York Times called "Booming," designed for Baby Boomers.

One passage from the column:

"I’m here today to make some suggestions to the Times for making 'Booming' even better. First, change the title. 'Booming' is too loud. We boomers prefer a little peace and quiet when we kvetch. Call the section 'Oy'."

To which one MNB user responded:

What the hell does "oy" mean?  Something to do with Olive Oyl?

For that matter, what the hell does "kvetch" mean?  "Throw-up"?

Let me familiarize you with an online service called Google. Type either of these words into Google - in fact, pretty much any word - and it will instantly tell you that "oy" is a "Yiddish exclamation of chagrin or dismay," and that "kvetch" is Yiddish for "complain" or "whine."

(Move reference: Sally Field as Norma Rae using "kvetch" when talking to Ron Leibman's New York labor lawyer. It's a classic!)

I referenced yesterday a David Carr column in the New York Times that was all about the ongoing battle being fought between traditional businesses (in this case, TV networks) and upstart offerings that threaten their viewer base and economic model.

Essentially, Carr argued that traditional businesses are used to providing content the way they want to - bundling channels and services together, so people pay for things they don't want or need in order to get the stuff they want - which may be inefficient for consumers but is high efficient in delivering profits. But as technology and innovation move forward, the balance of power shifts, giving consumers more options and undermining their economic model. Carr may be writing about TV, but he's really describing a broader trend that affects a lot of industries.

MNB user Matthew Heinze wrote:

I did like the quote you included from David Carr regarding the consumers deciding where the media industry, and likely the retail industry, will go.

That said, Carr’s reference to the Masters app really hit home. With two small children, my available weekend time for events such as the Masters is very limited. In fact, this week, I would not have watched a single hole save for the Masters app/mobile site. I checked the scoreboard every couple of hours over the weekend to see what was happening. I noticed the ‘Live’ button but wasn’t really interested in following any particular group throughout the day. Then, when I saw it was going to a playoff I was more than a little interested. However, out in the backyard with the boys I wasn’t about to run in the house to the television. I pulled up the Masters site and there it was, live coverage of the playoff streaming to my iPhone. It didn’t even seem to have any buffering issues which was great. 

The balance of power is definitely shifting and I look forward to seeing how the ‘traditional’ media and retail outlets respond. As a consumer, I will continue to ask for what I want not the profitable bundle they want to sell me.

There's the future, folks.
KC's View: