retail news in context, analysis with attitude

Published on: March 14, 2017

by Michael Sansolo

None of us every really know the future. Sure, sometimes we have a sense of where things are going, but minus an extremely lucky guess things usually develop in ways we could never imagine.

For instance, Kevin and I have talked a lot lately about the 10th anniversary of a fairly recent technological revolution; it was in January 2007 that Steve Jobs first introduced the prototype iPhone. We were all excited about it then, but frankly, none of us could have imagined the impact of that new device.

The one statistic on the iPhone that I love is this: when it was finally made available in June 2007 there were slightly more than 500 apps available. Today, that number has blossomed to 2 million apps for the iPhone and 2.2 million for Android. (No doubt, it’s gone higher since you started reading this article.)

To think: in 2007 we never knew we needed a smartphone. Today, we’d be lost without the countless apps, the built-in camera and calculator, and literally lost without Waze.

Where smartphones take us in the future is anyone’s guess, but here the thing: it never was nor never will be the last breakthrough technology. So we have to keep looking and wondering, “What comes next?”

NPR recently shone a light on that very question by hosting a discussion with experts from MIT on the future direction of technology. MIT publishes a regular technology review and annually selects 10 “breakthrough” technologies the institute sees as both feasible and having enormous implications for society at large.

This year's edition features one with incredible implications for the retail industry - self-driving trucks. They are coming and apparently pretty quickly.

MIT expects them to be a part of the nation’s logistics system inside the next decade. Logistics rarely is the sexiest topic to discuss, but almost nothing works without it. So sexy or not, this really matters.

By sheer serendipity, I happened to hear the NPR discussion while on my way to speak at the annual Food Shippers of America conference, where trucking issues are front and center. And if you had any doubts on the importance of this technological issue, put them aside quickly.

At FSA, we heard about countless issues impacting the world of logistics especially the potential for a staggering shortage of drivers in just a few years. There are many reasons from regulations to demographics, but the message is simple. The gap threatens to make a largely invisible part of the industry more important than ever.

Unless, of course, self-driving trucks lessen the load by making each driver stunningly more efficient by extending the hours they can be on the road, allowing a new form of tandem trucking or eliminating dwell time to drop loads at distribution centers. As with smartphones, the applications for this technology may go well beyond what we can imagine today.

The technology isn’t perfected yet, but I figure the folks at MIT have a much better handle than I do on where technology is going. This sounds like a problem and solution coming together at the same time.

As Yogi Berra warned us, “it’s tough to make predictions, especially about the future.” But we know this, it will always be very different than today.

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.

Published on: March 14, 2017

by Kevin Coupe

The Washington Post this morning has a story about how one Memphis-based funeral home is trying to create a service that is more relevant to on-the-go mourners.

R. Bernard Funeral Services," the story says, "is offering a drive-thru window so grieving family members and friends can pay their last respects from the comfort of their automobiles."

Ryan Bernard, the owner, says that "we still have traditional visitation services. The drive-thru is just an added bonus for your family member. It is up to the family to decide if they want this option.”

Since being introduced in January, the story says, six families have taken advantage of the option, which does not cost extra.

"At R. Bernard, visitors need to first go to a check-in area and then drive through a gated entrance," the Post writes. "The viewing area (which, in case you were wondering, was the drive-thru of a dearly departed local bank) is shaded, private and comes complete with a bullet-proof window. Hey, you never know. Only three minutes are allotted per viewing."

While some are offended by the offering, the story makes it clear that all R. Bernard is doing is trying to offer a service that people want, and that will differentiate its funeral parlor from the competition. And this is just the beginning: "He’s planning to soon offer live streaming of funeral ceremonies as well cremation services."

Which sort of sounds like something from a Carl Hiaasen novel. (We can only hope.) And an Eye-Opener.

Published on: March 14, 2017

The New York Post reports that Abel Porter, former senior vice president at Kroger-owned, Utah-based Smith's Food & Drugs, has been named CEO of struggling New York-based Fairway Markets.

He succeeds Jack Murphy, who has been running Fairway "for the past two and a half years, presiding over two ownership turns and Fairway’s precipitous fall from Big Apple darling to a bruised chain." Fairway never has had a profitable quarter since its 2013 IPO, and it emerged from bankruptcy last July.

Published on: March 14, 2017

The Associated Press reports that Amazon plans to open a storefront store near the Ohio State University campus in Columbus where "students with an Amazon prime membership can pick up items from self-service lockers or with help from an Amazon employee."

The story notes that Amazon has opened similar storefronts at more than a dozen educational institutions around the country. (And not just near universities. The company recently opened one just off the Strip in Las Vegas.)

Published on: March 14, 2017

Nielsen is out with an omnichannel study in which it concludes that "while many might assume that impulse purchases happen more often in physical stores than online, there are several categories where online impulse shopping outpaces those in brick-and-mortar environments."

The study goes on: "Specifically, consumers make more online impulse purchases across the grocery, household care, snack and personal care categories than they do at brick-and-mortar stores. In fact, U.S. consumers are 5% more likely to make an impulse purchase in the grocery category online than in a physical store. This doesn’t mean, however, that online shopping is a breeding ground for impulse shopping. There are many categories where impulse shopping is more common at physical stores, including frozen food, which consumers are 9.4% more likely to buy on impulse in-store than online."

The Nielsen study concludes that consumers are five percent more likely to make impulse purchases online than in physical stores, 4.6 percent more likely to make household care purchases, 4.4 percent more likely to make snack purchases, and 1.9 percent more likely to make personal care purchases.

Published on: March 14, 2017

• CNet reports that "Amazon has started to roll out the first new language on Amazon.com since the original site's creation over 20 years ago," adding Spanish as an option for US consumers.

According to the story, " The change will let the US' more than 40 million native Spanish speakers and over 10 million bilingual Spanish speakers toggle between English and Spanish on the site. The US is now the second-largest Spanish-speaking country in the world, after Mexico."

Amazon does have sites in a variety of countries where native languages are used, but this is the first time in the US that it has offered an alternative to English.

Published on: March 14, 2017

• The Chicago Tribune reports that "retail beef prices on average have been slowly but steadily declining from historic highs two years ago that were largely the result of a years-long drought in cattle country. The beef industry has rebounded in a big way: This year is expected to be the largest commercial beef production year since 2011, according to the U.S. Department of Agriculture." Which is expected to result in a big year for retailers looking to build higher beef sales.


• In Minnesota, the Star Tribune reports that "Caribou Coffee is cleaning up its act by offering beverages free of artificial colors, flavors and sweeteners." The company "has established a clean label standard for all beverages served at its U.S. locations, making it the first national coffeehouse to answer consumers distrustful of unrecognizable ingredients with such a wide-ranging guarantee ... Caribou has outlined on its website CaribouCleanDrink.com how it is defining the term. The company lists more than 70 ingredients forbidden in its drinks. High fructose corn syrup, partially hydrogenated oils and MSG are a few of them."


• The Associated Press reports that Arkansas-based Harp's Food Stores has opened its third 10 Box Cost-Plus store, in Springdale, where it promises "customers savings by selling items at cost and adding 10 percent to the bill at checkout."

The story goes on: "The cost-plus idea is not new in the crowded and competitive grocery industry ... Cost-plus operators try to set themselves apart by selling items at their cost, which 10-Box explains in its stores as the total expense it takes to buy a product, get it from the warehouse or supplier and to the shelf. The store then adds a 10 percent charge at checkout to cover its operating costs."

The AP notes that the concept is designed to help Harp's compete more effectively with retailers that include Aldi, Wal-Mart Supercenter and Wal-Mart Neighborhood Market.


• Advertising Age reports that General Mills has removed the BuzzBee mascot from Honey Nut Cheerios boxes in the US and Canada, replacing with a black white space that is designed "to encourage consumers to plant over 100 million wildflowers this year, in order to ensure a more bee-friendly world. The campaign, #BringBackTheBees, invites families to order and plant free seeds from Vesey's Seeds by visiting the campaign website.

"The brand points out that bees have experienced an unprecedented scale of habitat loss, with more than nine million acres of grass and prairie land converted to crop land since 2008. Approximately 30 percent of all ingredients in General Mills' products rely on pollination."

Published on: March 14, 2017

• The Hershey Co. announced that it has named Mary Beth West, most recently executive vice-president and chief customer and marketing officer at JC Penney, to be its new senior vice-president and chief growth officer.

Published on: March 14, 2017

Amy Krouse Rosenthal, who wrote 28 children's books and two memoirs, as well as being a quirky and prolific social commentator, passed away yesterday of ovarian cancer.. She was 51.

Published on: March 14, 2017

Responding to yesterday's piece about convenience stores becoming far more food-oriented, with a higher level of cuisine, one MNB reader wrote:

I always tell people about the gas station I used to see when I travelled to in Bentonville that sold sushi. I could never bring myself to stop in because it seemed so odd but, as far as I know it’s still there. Maybe they were the start of a trend.

Two words I always think of together. Sushi and . No surprise here.

And MNB reader Bob Wheatley chimed in:

Great food turning up everywhere serves as a reminder that food culture shifts have altered the paradigm of what food quality and taste experience should be. When Bill Clinton first ran for office, there was a sign at his headquarters that brought focus to his campaign. It read: “It’s the Economy, Stupid” — And now we know in virtually every channel of food retail: Its the Food, Stupid.




Continued discussion about assertions that Starbucks is suffering from diminution of its brand image - and store traffic - because of an announced program designed to hire 10,000 refugees globally over the next five years, which some have suggested supersedes its commitment to US veterans. This is an assertion that strikes me as demonstrably and factually inaccurate.

One MNB reader wrote:

I love the debate. This is an interesting topic! For me I learn from successes and failures in business. This is a failure and here is why.

Interesting, that this is even still in the news? This tells me that Starbucks knows it is affecting sales, especially if they are saying it’s not.

If Starbucks management reads the news and observe the times we are in today, they know that this is a polarizing topic, so why pick sides. If they truly believe in this, just quietly do it. On the other hand there is nothing quiet about Starbucks' CEO.

I agree that the Starbucks support of our military is wonderful, but should that deed give them a pass on their current announcement on hiring refuges/ immigrants/ illegal immigrants…would you agree a polarizing topic? History shows that the SB CEO likes to be the center of attention maybe even controversial, this time I believe they stepped on themselves big time. Now they need to dig out from it!

The lesson here is when your business success is based on all consumers, it might be important to be neutral when it comes to political hot buttons? Next thing would be if Trump would jump in…I don’t agree, but what if?
 
FYI, like your other reader wrote last week, I also dropped my gold card and unsubscribed to their web site.

As is your right.

But where I think you make a mistake is when you write about Starbucks "hiring refuges/ immigrants/ illegal immigrants." In fact, these are not the same thing, and the biggest problem in this debate is that people think they are.

Let's be clear. An immigrant is someone who moves to a country for a better life and goes through the system to do so legally. An illegal immigrant is someone who moves to a country for a better life, but does not follow the law in doing so. But a refugee is someone who has to escape his or her country because of some sort of political, ethnic, racial or even religious persecution that makes it unsafe for them to stay there; they are, quite literally, looking for a safe harbor. And all Starbucks was saying that around the world, it wanted to provide jobs to 10,000 of these refugees ... in essence making it possible for these people to support themselves and their families and not becoming a drag on all these different economies. (Starbucks operates in more than 70 countries, and has more than 23,000 stores ... it strikes me that there are a lot of opportunities out there.)

I'm sorry, but I simply do not understand how, in any calculation, this is a bad thing. Especially because it has no impact on the company's stated and largely accomplished goal of hiring 10,000 veterans or their spouses in the US.

There is plenty of room for debate about Starbucks' business policies, and about the wisdom of the company taking some overtly political positions in a toxic and divided US. I am happy to engage in that discussion.

But this is not one of those cases, it seems to me ... except to those who conflate illegal immigrants with refugees.

From another reader:

Much chatter around Starbuck's refugee hiring plan.  I have recently spoken with several people who have avoided a Starbucks for  weeks because they find Shultz's liberal stance as anti-Trump and  anti-American. However, far greater numbers say they are just tired of paying $5 for a cup of not-so-great coffee.

Frankly, if you don't like the coffee, it doesn't matter if a cup costs $2 or $5. One should buy coffee somewhere else.

As for the other argument. ... let me just suggest that being anti-Trump is not the same as being anti-American. Just as disagreeing with Obama is not anti-American. It is not the same thing. Being liberal is not anti-American, just as being conservative is not anti-American. But the assertion explains both the essential problem and the difficulty of finding solutions in a toxic America.

I loved this email from MNB reader Gary Loehr:

I’m pretty sure that the veterans and refugees working together at Starbucks will get along just fine.  If only the Democrats and Republicans could do the same. Then again, I suppose it is easier to make a latte than a health care plan.

Only marginally. I have a son who used to work at Starbucks. His college admission essay was on how being a barista at Starbucks - making a vast majority of drinks while juggling new orders and being friendly to customers - had amply prepared him for life.