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    Published on: January 31, 2017

    by Michael Sansolo

    Staying relevant in any business requires a near constant willingness to embrace uncomfortable truths and to prepare for and embrace new challenges. No one ever knows the precise shape of the future, but we do know that it always looks different than the past and present.

    A fabulous example of this is presented as a minor subplot in the powerful and popular recent movie, Hidden Figures. As the movie is still in theaters, I’ll try to explain this point without divulging any key plot points, although its historical roots make it fairly easy to research.

    The movie revolves around two major events of the early 1960s: the emerging space race with the Soviet Union and the waning days of segregation in the South. The two topics are entwined and told with dramatic tension even though, again, the key events of the movie are all well-known history.

    But it is the subplot about reinvention that I want to focus on, since it is something we all need to think about, both for ourselves and our companies.

    The key characters in Hidden Figures are a group of African-American women working for NASA as human computers. That is, they were all strong mathematicians, whose jobs involved making and checking calculations minus all the tools we have today. If nothing else, the movie is a historical lesson for anyone who never did complex multiplication without a calculator.

    In the course of the movie, NASA receives and installs its first mainframe computer from IBM. The new machine is such a novelty that its size and complexity befuddles even the NASA engineers.

    At one point, one of the human computers sees the new machine, housed as computers were at that time in an enormous room. Almost instantly, she makes a realization: this machine has the ability to perform thousands of calculations every minute. In other words, the IBM mainframe means the end of her career.

    Rather than protest or complain about this coming change, the character goes to the library to get a book about computers and their special language. And after reading it she informs her co-workers that she’s seen the future and their jobs won’t exist. So she leads them in learning the language of Fortran.

    The plot line continues from there, showing how the newly educated human computers make themselves an indispensable part of the future.

    As longtime MNB readers know, there’s nothing Kevin and I like more than using a movie as a metaphor for a business challenge or opportunity. (You made have heard somewhere that we actually wrote an entire book about it: "The Big Picture: Essential Business Lessons from the Movies." Available now from Amazon. For signed copies, just let us know. End of commercial.)

    This small subplot in Hidden Figures delivers a crystal clear lesson in reinvention and how to remain relevant by embracing change and getting there first. As we all know, there’s zero certainty about the future. None of us knows for certain what it holds, but we have to constantly be on the lookout for the signs and the paths to where it leads.

    Don’t hide from that challenge. Seek it out. After all, understanding the importance of embracing the future isn't exactly rocket science.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: January 31, 2017

    by Kevin Coupe

    It generally is conceded by most experts that Starbucks has been one of the most progressive companies around when it comes to mobile marketing, using its smart phone app to allow people to order and pay for coffee and food remotely and even accumulate stars that go toward free products and other rewards.

    Now, Starbucks has gone one step farther. Engadget writes that the company "is continuing its efforts to stay on top of technological trends by adding new voice-ordering functions to its iOS app and Amazon's Alexa digital assistant. Called 'My Starbucks barista' on iOS, the service is being rolled out to select customers today as an extension of the company's Mobile Order and Pay feature ... At the same time, the company is launching a Starbucks Reorder Skill to the Alexa platform."

    According to the story, "You'll be able to speak your order, and customize your food and drink to your personal preferences, according to Starbucks. On Alexa, users will be able to re-order a standard, pre-defined order by saying, 'Alexa, order my Starbucks.' They will be able to pick up their food and beverage at a pre-determined outlet."

    Now, I have to be honest here. I'm traveling, so I don't have my Echo with me. But I did immediately check a recent update of the Starbucks app on my iPhone to see if I'm one of the lucky ones to be enabled. Dammit, I'm not.

    But I can't wait.

    This is totally cool. Not necessary, but it sounds like an awful lot of fun. (I just hope, since Starbucks said that one of the reasons they had a tough quarter recently was because there were so many people using the app that it created slowdowns and walkouts in the stores, that they add enough baristas to keep up with the work.)

    As other companies try to figure out what their digital strategies should be, Starbucks is proving itself to be ahead of the game.

    It is an Eye-Opener.
    KC's View:

    Published on: January 31, 2017

    Walmart said yesterday that it is ending its competitive response to Amazon Prime, a program called Shipping Pass that offered customers unlimited three-day shipping for a $49 annual fee. In its place, Walmart now will offer free two-day shipping on two million SKUs as long as the order totals $35 or more.

    In its story, the Washington Post writes that this is "an aggressive play to snatch e-commerce business away from Amazon" by offering the same shipping speed with no annual fee.

    “In this day and age, two-day shipping is really just table stakes,” said Marc Lore, Walmart’s US chief executive for e-commerce. And he suggested that this is just the first of a number of changes, saying, “Things couldn’t be moving any faster than they are.”

    The Post writes that "the rollout of free two-day shipping is the first high-profile, customer-facing digital strategy to debut under Lore, who assumed leadership of Walmart’s online offerings after the retailing behemoth bought his startup, Jet.com, for $3.3 billion."
    KC's View:
    It remains to be seen whether this new competitive move will do any damage to Amazon, but I think it is worth noting that while Walmart is making two million items part of this new program. Amazon Prime applies to more than 40 million items. (Lore says the two million represent the "vast majority" of what people buy on Walmart's site.)

    My suspicion is that this new initiative isn't enough on its own to put a dent on Amazon Prime, and so it'll be interesting to see where it fits into whatever else Walmart is planning.

    It ends up that Shipping Pass only lasted six months, so we'll see if the replacement has any greater sustainability. To me, it all comes down to where Walmart is putting its emphasis.

    When Shipping Pas was announced, I said that the name reflected a retailer-centric view of the service. It is all about how Walmart is going to get the product to the consumer.

    "Prime," I said, speaks to how I, as a consumer, am valued by Amazon.

    And that's not just a semantic difference. I think it reflected a failure of imagination, and we'll have to see if Marc Lore is able to solve that problem.

    Published on: January 31, 2017

    The St. Louis Post-Dispatch reports that Schnuck Markets is preparing to face off against increased competition in the grocery segment by "betting big on online ordering and same-day delivery. Beginning next month, Schnucks is rolling out a new delivery service at 29 of its local stores, including the Metro East, to both homes and businesses."

    The story notes that Schnucks is working with Instacart, which also serves a number of other retailers in the marketplace, including Straub’s, Shop ’n Save, Whole Foods, Costco and Petco: "Beginning next month, customers can access Schnucks Delivers’ new service online at Schnucksdelivers.com. Instacart will provide the software, shoppers and drivers."

    This is the second go-round for Schnuck Markets in the e-grocery space. It launched Express Connection a number of years ago, and stopped taking new customers two years ago.
    KC's View:
    I applaud the decision to get into e-grocery, but I am a little skeptical about the Instacart piece of the puzzle. First there is the fact that Instacart has had some labor issues lately - like a decision to recalculate how its people get paid, which led to some level of employee antipathy, which could be communicated to shoppers.

    Add to that the fact that Schnucks' people always have been a differential advantage for the company. Now they're letting someone else handle the customer interface at the point of delivery, and the someone else also is repping the very companies from which Schnuck's is trying to differentiate itself.

    I just think that this is one part of the experience that I'd prefer not to outsource.

    Published on: January 31, 2017

    The Baltimore Sun reports that Ahold Delhaize-owned Giant of Landover is testing a pilot program in nine stores that "measures the sustainability of food, both fresh and processed," and then provides a label for consumers that identifies items as "good," "great," and "best."

    "Giant's pilot program, developed by Brooklyn, N.Y.-based HowGood, comes as more and more consumers want to know how their food is grown and made, and retailers are looking for ways to give them information in a digestible way," the Sun writes. HowGood measures some 70 different criteria in making its evaluations, including "conditions and wages for production workers, treatment of animals, use of pesticides and antibiotics, and greenhouse gas emissions, among other indicators ... HowGood can rate about 90 percent of food products in a store with its database of more than 200,000 rated products that consumers can access through a mobile app."
    KC's View:
    The view from here remains consistent - the more information you can make available to customers, and the more transparent you can be about pretty much everything, the better. As long as they understand the basis of the sustainability index, they can decide whether or not they even want to use it, and then can make more informed decisions about the products they buy.

    Published on: January 31, 2017

    The Miami Herald reports that McDonald's products now can be delivered to customers' homes and offices in Southern Florida, now that the fast feeder has teamed up with UberEATS, the food-delivery app created by the ride sharing company.

    According to the story, "Beginning Monday in McDonald’s first large-scale test of this app-enabled delivery service in the nation, UberEATS and McDonald’s are partnering to test delivery from 134 McDonald’s locations in Miami-Dade and Broward counties, as well as 55 restaurants in Orlando and 30 in the Tampa Bay area. If the tests are successful, McDonald’s may expand the service to other markets around the nation, said Pam Williams, director of growth platforms for McDonald’s USA ... Customers can now place McDonald’s orders via the UberEATS mobile app or at UberEATS.com, and track their order as an UberEATS delivery partner brings their meals to them. The full menu at participating McDonald’s restaurants will be available for delivery except for soft-serve cones and promotional items such as McPick 2. An UberEATS booking fee of $4.99 applies to each order."

    One area McDonald's franchisee who has already been testing the app says that customer feedback has been good.

    This is said to be UberEATS' first large scale pilot test with a fast food chain, though it is operating in some 50 cities in 20 countries around the world.
    KC's View:

    Published on: January 31, 2017

    The Food Marketing Institute (FMI) and Nielsen have released a preview of their "Digitally Engaged Food Shopper" analysis, designed to "offer a comprehensive look into the behaviors, motivations and expectations of the digitally engaged food shopper. Initial findings from this study show that within the next decade, online food shopping will reach maturation in the U.S., far faster than other industries that have come online before.

    "Research also revealed that the center store is likely to shift online faster than other departments, suggesting a fundamental evaluation of the role the store plays in digital food shopping. The research estimates that in the current climate of technology adoption and evolution, consumer spend on online grocery shopping could reach $100 billion.  To put that into context, that is the equivalent of 3,900 grocery stores based on store volume."

    Other key findings:

    • "Multi-channel shopping: More shoppers are buying more of their groceries across channels. In fact, 23% of American households are buying food online today. This upward trend continues - of those that will buy online, 60% expect to spend over a quarter of their food dollars online in ten years."

    • "Digital Experimentation: Grocery retailers and manufacturers are meaningfully experimenting with business models and technologies to find their way online. However, the road to success has not been paved."

    • "Grocery Saturation: Grocery shopping will reach digital maturity and saturation faster than other industries before, such as publishing or banking.

    • "Center Store Migration: Center store categories are already migrating online and this migration is expected to continue."

    • "Young & Digital: Younger, newer and more engaged digital shoppers adopt grocery related digital technologies more quickly and will hasten the expansion of digital grocery shopping further."

    A copy of the full report is available here.
    KC's View:
    Reading the report is important, but it is even more critical that retailers formulate aggressive, appropriate responses to the ever-quickening shifts in the e-grocery business. No time for dithering.

    Published on: January 31, 2017

    • The Wall Street Journal reports that "Walgreens Boots Alliance Inc. and Rite Aid Corp. agreed to reduce the amount Walgreens would pay for its rival by at least $2 billion, after the two companies struggled to get antitrust enforcers to bless the big drugstore deal.

    The original deal was said to be worth $9.4 billion.

    "The companies said Monday they would look to sell more stores as they seek to satisfy regulators at the Federal Trade Commission, which has been reviewing the combination ... The companies on Monday said they may sell a total of up to 1,200 of Rite Aid’s 4,600 stores—but it is unclear how easily they could find a buyer that satisfies regulators."

    The process may take up to six months, the Journal says.
    KC's View:

    Published on: January 31, 2017

    Reuters reports that Office Depot has named Gerry Smith, most recently COO at Lenovo, as its new CEO, succeeding Roland Smith, who decided to retire last year after federal regulators scuttled the company's acquisition by Staples.

    In addition, Office Depot said that Joseph Vassalluzzo, a member of the company's board of directors, will become chairman. Before joining the Office Depot board in 2013, he was vice chairman of Staples.
    KC's View:

    Published on: January 31, 2017

    As noted yesterday on MNB, Starbucks chairman Howard Schultz has pledged to hire 10,000 refugees over the next five years in countries all over the world, a decision that came as a reaction to the executive order from President Donald Trump restricting immigration from a number of predominantly Muslim countries, as well as greater vetting and preferential treatment for Christian refugees. That order, we noted, has been criticized by a number of attorneys general who have labeled it as unconstitutional, and set off a number of protests around the country.

    Now, Fortune writes, "a group of Twitter users are pledging to stop supporting Starbucks, while those supportive of the refugee hiring news say they will buy coffee and food from the restaurant chain to support the move."

    The story notes that Starbucks is used to the attention, and even courts it. The company "found itself the target of a social media boycott last year, as a #TrumpCup protest surfaced for a few days after a viral video showing a white male Trump supporter yelling at a barista for unfair, anti-white discrimination fueled that campaign. #BoycottStarbucks has been a hashtag that has floated around on social media channels for some time now ... Starbucks seems to be a perennial target. That could be because Schultz has never demurred when it comes to talking about issues and topics that could be seen as divisive to some. Some cultural stances he has backed include support for marriage equality and a call for open discussions about race..."
    KC's View:
    Well, this was sort of predictable.

    The interesting this about this is that I saw this play out in the emails I got about yesterday's story. One MNB reader wrote:

    I admire Howard Schultz taking a definitive position.  Starbucks is successful with store all over the world and he is welcoming citizens of the world to this establishment. And his hiring and healthcare policy has alway been admirable.  If this is risky so be it.  We all need to be a little more forthcoming and risky in this selfish political climate.

    But another wrote:

    Never had an never will step foot in a Starbucks  and Schultz's recent narrative only strengthens my stance. He has every right to speak his mind as I have every right to speak with my feet. While I have long believed that everyone is totally free to express their opinion, if you choose to do this, you need to understand the and accept what the results can be.

    Which is exactly the point I made yesterday.

    The thing is, Schultz is counting on the fact that most of the people he pisses off are going to be people like you who didn't go to Starbucks anyway. You deciding to boycott Starbucks because of this stand costs him not one penny. On the other hand, if his position on the issues helps define the brand in a positive way with people he sees as Starbucks customers, then it works out as being a good thing.

    Let's also not forget that Schultz is playing a global game here - Starbucks operates in a lot of countries, and he has to be conscious of his company's image in those places.

    We also probably shouldn't rule out the possibility that while there is a business component to Schultz being so publicly defiant of the Trump administration, he also may be acting out of actual ethical outrage, based on his values.

    Starbucks is hardly the only company being caught up in these controversies. I was fascinated yesterday when one of the attendees at the Food Marketing Institute (FMI) Midwinter Executive Conference in Scottsdale, Arizona, came up to me and informed me that even though he was a longtime and dedicated Uber user, he'd deleted the app from his smartphone and from now on would be using only Lyft.

    Here's the background. Uber CEO Travis Kalanick sits on a business advisory group created by the Trump White House, and has been getting considerable grief online for having any sort of relationship with the administration. (To be fair, Kalanick has said that he's against the ban and plans to make that point in a meeting at the White House this week.)

    But what really has torn it for a number of people was when Uber charged "less than it could at JFK Airport in New York City as taxi drivers had halted service for an hour on Saturday to protest the ban," as the Associated Press reports. " The move was perceived of by some on social media as an effort to profit off the protests as more passengers would need to seek alternatives to cabs. But the company said on Twitter that it had not "meant to break the strike."

    Meanwhile, the AP writes, "Rival ride-sharing company Lyft responded by saying it will donate $1 million over the next four years to the American Civil Liberties Union, which successfully requested an emergency order approved by a federal judge Saturday that temporarily bars the U.S. from deporting people from the countries subject to Trump's travel ban."

    Which is why this industry executive decided never again to use Uber, and instead use Lyft.

    People are choosing sides. Companies are choosing sides. While some of this is predictable, some of it is not.

    Published on: January 31, 2017

    ...will return.
    KC's View: