retail news in context, analysis with attitude

Published on: March 29, 2017

by Kate McMahon

Target is banking on fashion designer Victoria Beckham to spice up sagging sales when her new line debuts next month.

For the former pop star turned celebrity entrepreneur, it’s her first foray into budget friendly fashion – including kids’ clothing and plus-size offerings.

For Target, it’s an opportunity to reclaim its reputation for successful style collaborations after faltering on recent partnerships with Missoni and Lilly Pulitzer, infuriating customers on a lot of levels. Given the pre-launch hype, combined with slumping sales and stock price, Target had better get this right.

The Minneapolis-based retailer recently vowed to invest “billions of dollars” to lower prices and remodel stores following disappointing fourth quarter sales and profit reports. Facing increased pressure from both Walmart and Amazon in its key everyday essentials category, Target’s 2017 sales projections are grim.

CEO Brian Cornell promised to cut prices and make it easy for customers to “grab-and-go” with those essentials while still delivering on the “style-side of the equation."

Enter Victoria Beckham, who rocketed to pop stardom in the 1990s with the Spice Girls. The glamorous “Posh Spice” cemented her celeb icon status when she married soccer superstar David Beckham, and launched her high-end fashion line.

A “look book” of her 200-plus designs for Target lit up the internet last week, and landed her on the cover of InStyle magazine. While the price tags in her eponymous fashion line are in the high three figures, the Target collection items will range from $6 to $70, with the majority falling under the $40 price point.

It’s a limited edition partnership, which Target pioneered in the early 1990s and has recently found to be a double-edged sword – lots of buzz and excitement before the launch and angry, disappointed customers afterward.

Demand for the 2011 collection with the haute Italian designer Missoni crashed Target’s e-commerce system while frenzied fans stormed the stores. The 2015 Lilly Pulitzer collection sold out within hours (and minutes in some locations) and left empty-handed shoppers fuming next to empty racks and on social media. Target expected the collection to sell out in weeks, not less than a day, and apologized for the “unacceptable” shopping experience. Really? That level of miscalculation is beyond unacceptable for the nation’s sixth biggest retailer.

The disappointed are still feeling the sting, as evidenced by this response to the Victoria Beckham collection look book on Target’s Facebook page:

”I'm hesitant to get excited because it will all be gone the second it is available, only to show up in eBay at a 500% markup within minutes. I love these collaborations but you make it impossible for regular shoppers to have a shot at getting any of it.”

Target also came under fire for offering the plus-size Lilly Pulitzer fashions online, and not in stores.

The Victoria Beckham x Target collection is set to launch on April 9, but no word yet on when the online sale actually will open or when hopeful shoppers should begin to line up outside brick-and-mortar stores. Also no word if the plus-size fashions up to size 24 will be online only.

I think this comes at a critical time for Target, which is trying to be both a cost-competitive store for everyday items and home to a trend-setting retail experience. Hopefully the folks in charge of the e-commerce system and stocking the stores did their homework this time and can meet the anticipated demand.

Target can’t afford another crash and burn. Otherwise, instead of spicing up sales, the Victoria Beckham collection will just leave a very bad taste for frustrated and disappointed consumers.


Comments? As always, send them to me at kate@morningnewsbeat.com .

Published on: March 29, 2017

by Kevin Coupe

Forget Virtual Reality. The new enthusiasm seems to be for Augmented Reality.

Bloomberg has a story saying that no technology has Apple CEO Tim Cook as fired up as "augmented reality, which overlays images, video and games on the real world. Cook has likened AR's game-changing potential to that of the smartphone ... Apple has built a team combining the strengths of its hardware and software veterans with the expertise of talented outsiders, say the people, who requested anonymity to discuss internal strategy.

"Run by a former Dolby Laboratories executive, the group includes engineers who worked on the Oculus and HoloLens virtual reality headsets sold by Facebook and Microsoft as well as digital-effects wizards from Hollywood. Apple has also acquired several small firms with knowledge of AR hardware, 3D gaming and virtual reality software."

Some experts believe that "the global market for AR products will surge 80 percent to $165 billion by 2024," the story says, and the expectation is that at some point AR devices will actually replace the smartphone.

This is all incredibly complicated, requiring expertise in both hardware and software ... and it will require enormous resources and dedication and an ability to get past the failures that likely will occur along the way. Apple has built an interdisciplinary team apparently charged with cracking the code.

I have no idea what this all means for how we'll live our lives day-to-day ... but it all sounds intriguing ... envelope-pushing ... and yes, Eye-Opening.

Besides, who knew how - and how quickly - the iPod and the iPhone would change our lives? Until, of course, they did.

Published on: March 29, 2017

Amazon yesterday unveiled two new bricks-and-mortar stores - Amazon Fresh Pickup facilities that currently are operating in two different Seattle neighborhoods, open only to Amazon employees testing out the concept, but clearly illustrating one path that Amazon hopes to take in the future.

As illustrated in the video and reported by the Seattle Times, "The two locations are designed for shoppers who make their purchases online and then select a time to pick them up. An Amazon employee at the pickup site will bring the bags directly to the shopper’s car ... When the two pickup spots move out of the beta stage and open to the general public, they’ll be exclusively for members of Amazon’s $99-a-year Prime loyalty program. The company declined to specify when that would happen.

"Unlike the AmazonFresh delivery service, which costs $14.99 a month, usage of the pickup locations is free, with no minimum order. Orders can be picked up two hours after purchase.

"AmazonFresh members, however, will have the special perk of being able to pick up their purchases in 15 minutes."

The Amazon Fresh Pickup stores join Amazon Go - a convenience-driven, no-checkouts store that appears to include significant fresh food offerings that also is being tested by employees in Seattle, though its public opening has been delayed because of technical glitches - as part of Amazon's various attempts to crack the code when it comes to groceries. Or, as the Times puts it, "They’re part of what seems to be a multi-pronged approach to unraveling the mystery of profitably selling groceries in the digital age. That effort is beset by difficult logistics and by shoppers’ reluctance to buy certain foods, such as produce and meats, sight unseen."

Published on: March 29, 2017

Kroger yesterday said it is launching a new website - www.krogerstories.com - designed to share "stories, ideas & inspiration from The Kroger Family of Companies."

Jessica Adelman, Kroger's group vice president of corporate affairs, said that the new site reflects a conviction that "customers, associates and other stakeholders are increasingly making decisions about where to shop, where to work, and who shares their values based on how well they understand the ways a company makes a difference for their people, communities and the planet. And in this equation, we believe that stories – credible, authentic, human stories – matter more than perhaps anything else."

The company says that "the new website features a variety of voices – produced by both freelancers and Kroger associates – sharing stories about Kroger's great people, innovative projects, and the ideas that are changing the way we eat, drink, and think about food. The multi-media site will feature long and short-form written content as well as video and photographic storytelling."

Published on: March 29, 2017

The New Yorker has a provocative piece called "The Sriracha Argument for Immigration," which looks at how the globalization of the food culture seems to be running counter to "the rising tide of anti-immigrant populism in the United States and much of the Western world." But it has been an evolution ...

"American cuisine is decidedly global, a polyglot of constantly evolving ingredients, flavors, and ideas from every possible corner of the globe," the story says. "During past bouts of American ethnic populism, immigrant foods were attacked as a symbol of foreign invaders."

But that's changed: "What’s remarkable in today’s America is that, while racism and xenophobia have come out into the open, food this time around seems to be exempt. It would be nearly unthinkable to talk of banning a cuisine based on its country of origin. Red or blue state, Trump voter or Sanders diehard, we all want to watch Anthony Bourdain eat his way around the world and find the tastiest fish taco in town. The political tide may be shifting to nationalism, but our appetite is increasingly globalist."

You can read the entire story here.

Published on: March 29, 2017

• Dunkin' Donuts said yesterday that it has partnered with traffic and navigation app Waze on a new feature that links it to the Dunkin' Donuts mobile app.

The announcement says that "Dunkin' Donuts has become the first partner for Waze's new feature, 'Order Ahead,' which lets Wazers save time in line by submitting orders in the Dunkin' Donuts Mobile App. With today's launch, members of the DD Perks Rewards Program can order their favorite Dunkin' coffee, beverage, donut or breakfast sandwich directly by connecting to Dunkin' Donuts' On-the-Go Mobile Ordering feature through the Waze app before hitting the road, then speed past the line to pick it up inside a Dunkin' Donuts restaurant."

The companies noted that "Dunkin' Donuts has been a long-standing partner with Waze since first mapping all of its restaurant locations through the app in 2012."

The key part of the announcement is that you have to place the order before hitting the road ... the assumption being that if you do it after hitting the road, you're also likely to hit something else. But seriously ... this is very smart of Dunkin' Donuts, which seems to realize that when these sorts of apps are networked together, they gain both power and momentum.


• As expected, Amazon said yesterday that it " has reached an agreement to acquire SOUQ.com, an e-commerce leader in the Middle East. Joining the Amazon family will enable SOUQ.com to continue growing while working with Amazon to bring even more products and offerings to customers worldwide."

Terms of the deal, expected to close later this year, were not disclosed.

Published on: March 29, 2017

• The Wall Street Journal reports that Walmart has promoted three members of its technology team, with three senior IT leaders "elevated to oversee units for customer systems, analytics, and technical engineering as Wal-Mart works to unify online and in-store technology."

According to the story, "Fiona Tan ... was promoted to senior vice president of U.S. customer technology. Ms. Tan joined Wal-Mart in 2014 and had been vice president of engineering in the company’s international group."

Jaya Kolhatkar, who joined Wal-Mart in 2013 through its acquisition of predictive analytics firm Inkiru Inc. in 2013, has been named senior vice president of global data and analytics platform.

And, "Jae Evans was promoted to vice president of global technical engineering and operations, continuing responsibility for core infrastructure services."

The Journal writes that "the moves are intended to align technology work to the ways consumers increasingly shop, using mobile apps to research items and navigate physical stores and buying online to pick up in stores ... Wal-Mart sees the mobile device as the linchpin of a customer experience that blends online and in-store shopping, with the retailer’s mobile app and mobile payments service playing significant roles."

Published on: March 29, 2017

• The Wall Street Journal this morning reports that The Conference Board is saying that "its index of consumer confidence grew to 125.6 in March from 116.1 in February. Economists surveyed by The Wall Street Journal expected the index to fall to 113.8."

The story says that "consumers increased their views of current business and labor market conditions as they had a greater short-term outlook for jobs and personal income prospects." The consumer confidence level is at its highest in 16 years.


• As expected, Tesco has agreed to write a check equivalent to $162 million (US) to settle an investigation by the UK's Serious Fraud Office into a financial accounting scandal related to a systemic understatement of costs and overstatement of revenues.

According to the story, "The supermarket group has struck a so-called deferred prosecution agreement (DPA) with Britain's Serious Fraud Office (SFO), enabling it to avoid a criminal conviction provided it meets certain conditions and pays the financial penalty. It will also pay compensation to certain investors of around 85 million pounds," or more than $103 million (US).


• CNBC reports that Chipotle has finally reached the end of a long road, and now is able to say that all of its ingredients are free of preservatives.

The story says that "Chipotle, which uses 51 ingredients to make all the items its sells, has long labored over its commercially produced tortillas, which contained ingredients like dough conditioners and preservatives. Now its tortillas have between two and five ingredients — flour, water, canola oil, salt and yeast for flour tortillas and corn masa flour and water for its corn tortillas."

The move is seen as more than culinary; Chipotle is still trying to recover from a series of food safety problems that hit its sales hard.


• New York magazine reports on how a court in Nigeria has ruled that Coca-Cola-made Sprite and Fanta "are literally 'poisonous' when consumed alongside vitamin C," and must have warning labels warning consumers to that effect.

According to the story, "The backstory on the case itself is complicated — in short, it started in 2008, when a Lagos businessman filed a lawsuit arguing he’d purchased large quantities of Nigerian Sprite and Fanta to export to England; but when they arrived, U.K. health authorities ran tests and concluded they weren’t fit for human consumption because the levels of benzoic acid and a food coloring called sunset yellow were so high, they posed a health risk if mixed with ascorbic acid. Fast-forward to the ruling this month, and the judge has widened the attack to include Nigeria’s own food regulators, who he calls 'grossly irresponsible' for certifying the safety of Fanta and Sprite, even though they can become 'poisonous in the presence of ascorbic acid'."

The Nigerian Bottling Company, which manufactures the products there, is appealing the ruling, which is said to have created an "uproar" among local consumers, "who aren’t so sure they still want to drink a soda that’s considered unsafe for humans in any part of the world, and several consumer groups have called for immediate boycotts."


• The Boston Globe reports that Starbucks has launched a new collaboration with a Harvard Business School startup called ‘Hi from the Other Side,’ which "matches up liberals and conservatives to create healthy conversation about American politics." And when polite discourse takes place, the participants get a free cup of Starbucks coffee.

Here's how it works: "Users can sign up for the app via Facebook and are then paired with someone nearby who identifies with the opposing political party. Each user then receives half of the information necessary to unlock a Starbucks gift card. Then, once both participants meet up, they can work together to unlock the gift cards and receive a complimentary cup of java."

Published on: March 29, 2017

• Publix Super Markets announced the promotion of Bob Balcerak, the company's director of real estate strategy, to Vice President of Real Estate Strategy. Balcerak started his Publix career in 1993 as a part-time meat cutter, became an assistant store manager, and then moved into the real estate side of the business.

Published on: March 29, 2017

...will return.