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    Published on: May 19, 2017

    by Kevin Coupe

    I've been doing this a long time, and I've visited thousands of stores all over the world. No matter where I am, I always find myself asking the same questions:

    Would I shop here? Could I shop here?

    Now, it isn't quite that simple. When I'm in a store, I have to filter those reactions through an understanding of the marketplace demographics, since I recognize that not everybody shops like me, or has the same preferences and interests. But I'm always looking for that basic, visceral appeal that a great store has.

    During a recent trip to Washington State, I found it. Specifically, I found it at two Metropolitan Market stores - one in Tacoma, and the other in its newest store, in Sammamish.

    In the Tacoma store, on Procter Street (pictures above),the first thing one sees is a bakery counter that wraps itself around the wall, associates fully engaged with sampling and selling products, and an array of great-looking baked goods that encourage nothing so much as a gnawing hunger.

    It isn't an isolated experience. The produce looks great, and the prepared foods spectacular. Most of all, the Procter Metropolitan Market brims with the kind of energy that comes from an engaged staff and excited shoppers who know they're lucky enough to be shopping someplace special.

    (As a point of comparison, there is a major chain supermarket across the street. The parking lot and aisles there were far less crowded, and the first thing that greets one entering the store on a Saturday is the aroma of rotisserie chicken that's been on the spit way too long.)

    Below, you'll see pictures of Metropolitan Market's Sammamish store, opened less than two months ago. It has a different design package than the Procter store - less wood, more sleek and gleaming steel and glass, but no less impressive. It feels more airy than the Procter store, but on a Sunday afternoon it had almost as much energy ... and again, it did that thing that every good food store should do, which is to make the customer hungry.

    Metropolitan Market doesn't tend to get a lot of headlines or attention, but it should, because the company runs terrific stores.

    If I lived there, it is where I would shop. For me, that's the highest praise. And an enormously pleasurable Eye-Opener.

    KC's View:

    Published on: May 19, 2017

    Walmart yesterday said that its first quarter e-commerce sales rose 63 percent, which it said was a reflection of its online marketplace overhaul and the impact of its acquisition of Jet for $3.3 billion. Reuters writes that "U.S. e-commerce chief Marc Lore told reporters online sales growth was boosted by the decision to offer free two-day shipping without membership fees and higher repeat orders."

    At the same time, Walmart said that US same-store sales were up 1.4 percent, the eleventh straight quarter during which it saw same-store sales increases.

    Fortune provides the following analysis:

    "Marc Lore, the founder who last year became head of Walmart's U.S. e-commerce efforts declined on a media briefing to say how much of that growth was attributable to its marketplace. Such items are not included in Walmart's in-store pick up and therefore less valuable in terms of fostering the interplay between stores and digital sales that Walmart is betting on to fight Amazon.
    Still, Walmart has also made improvements to its shopping and payment apps, pushing customers to come into stores by offering them incentives such as line-busting privileges.

    "What's more, it's using e-commerce to try to direct more shoppers to stores to generate sales there while also protecting margins: Walmart recently started offering discounts for orders placed online but picked up in store, which saves shipping costs. But the retailer remains very far behind Amazon, whose online sales are about six times greater in the U.S."

    Bloomberg provides the following context:

    "The results signal that Wal-Mart is getting a payoff from an ambitious online expansion, which included last year’s $3.3 billion acquisition of The Bentonville, Arkansas-based company now boasts 50 million items on its website, up from 35 million the previous quarter, and its offer of free two-day shipping for orders of $35 or more has boosted site traffic and spending, executives said."

    And, Bloomberg writes:

    "The acquisitions have helped burnish Wal-Mart’s online image, though the majority of e-commerce growth came from its longstanding site last quarter. Its digital growth rate was nearly triple that of Target. Amazon’s sales of so-called retail products climbed 16 percent last quarter."
    KC's View:
    I've always believed that Walmart eventually would come up with a strategy making it more competitive with Amazon's online offering; I didn't think it would necessarily mean a $3.3 billion acquisition of an unproven e-commerce business. But what makes Marc Lore different from many of the other folks at Walmart is that he is a technologist who sees the world differently, and he doesn't have a bias toward bricks-and-mortar. He does, however, appear to see physical stores as a potential advantage in the fight against Amazon ... and that is interesting.

    I hardly think this spells doom for Amazon - the company's DNA for innovation and "day one" thinking will continue to make it formidable ... and maybe unbeatable. But Walmart certainly is going to make it more interesting.

    Inevitably, there will be a lot of collateral damage. Be afraid. Be very afraid.

    Published on: May 19, 2017

    Advertising Age has a profile of Rick Gomez, the former MillerCoors and PepsiCo executive who is the new chief marketing officer at Target, and who "has the task of restoring the once-mighty brand to its former glory. And after four consecutive quarters of same-store sales drops -- Target reported a 1.3% decline in first-quarter same-store sales on Wednesday -- it's an uphill battle."

    Already, the story says, "Gomez has implemented operational changes at the 1,800-unit chain. To ensure better communication across all of Target's departments, he now meets regularly with the chief merchant, head of stores and head of e-commerce -- collectively, Team C4 -- to collaborate. He's also devoting more dollars -- like most retailers -- to digital, where shoppers are increasingly spending their time. That means consumers should expect to see more Target content personalized for them on platforms such as Facebook and Pinterest."

    And he also is "charged with the marketing behind Target's new private-brands push, in which it will release a dozen brands over the next two years. Nursery décor brand Cloud Island debuts later this month."
    KC's View:
    Good luck. Somehow, it always seems that Target is so busy putting out fires and reassuring people - everybody from investors to customers - that it is relevant that it doesn't have the time or ability to figure out what Target is going to mean in 2020 and beyond. Which is what I think they have to do, especially with all the problems facing bricks-and-mortar chains.

    Published on: May 19, 2017

    The Seattle Times reports on how Amazon has created a fast-track leadership program designed for US military veterans and expected to put these vets "on a path toward the top ranks at the e-commerce giant’s ballooning empire."

    "Launched in January 2017," the Times writes, "Amazon’s Military Leaders program is the company’s latest effort to bring veterans into its fold. It’s a popular cause — many companies, from Starbucks to Microsoft, do it. A year ago, Amazon committed to hire 25,000 veterans and military spouses over the next five years (Amazon says it has already hired “thousands” but won’t give more details.)

    "But this program represents an interesting twist. It seeks to directly leverage the leadership skills acquired by officers and cutting-edge specialists in the military forces to give structure to its fast-growing logistics operations."

    Rachel Lessard, a former nuclear submariner who is now a recruiter for the Military Leaders program, explains it this way: "When they come to Amazon they’re super-successful, they have a bias for action and have proven their ability. When you’re in a submarine your environment is so complex, and there’s so much extra going on that if you can be a submariner we think you can be a good fit for the complex environment in our operating centers.”

    The story notes that "the program is modeled after a similar track within Amazon’s logistics unit for graduates from MBA programs, which puts young hires on an accelerated course for promotion. Dave Clark, the senior vice president for worldwide operations and customer service at Amazon, is one of 844 people to have gotten their start through that so-called Pathways program."
    KC's View:
    I'm sure the culture at Amazon takes some getting used to for people who have had military careers, but I also know that Amazon values people with a bias for action. This is all very smart.

    Published on: May 19, 2017

    Reuters reports that German discounter plans to open its first US stores on June 15, and that the company is saying that "its products would be up to 50 percent cheaper than competitors, which are already caught up in a price war."

    According to the story, "Lidl said it would open its first 20 U.S. stores in North Carolina, South Carolina and Virginia, starting on June 15. Eighty more will follow in the United States within the first year ... Analysts estimate the company will have more than 330 U.S. stores by 2020. The stores will be 20,000 square feet in size and have only six aisles. The retailer's in-house brands will account for 90 percent of the products."

    "This is the right time for us to enter the United States," says Lidl US CEO Brendan Proctor. "We are confident in our model. We adapt quickly, so it's not about whether a market works for us but really about what we will do to make it work."
    KC's View:
    I've said it before and I'll say it again. Lidl is going to make a lot of noise, and likely will influence consumer expectations about price in excess of its actual market share achievement. This is not to be taken lightly.

    Published on: May 19, 2017

    Engadget reports that in the UK, Tesco - prompted by similar offerings by Amazon and Sainsbury - has been testing a one-hour delivery program.

    According to the story, "The one-hour option only exists within a private app the supermarket has so inventively named Tesco Now ... As it stands, the app offers a limited selection of groceries for speedy delivery in London zones 1 and 2.
    Like Prime Now, you can also choose whether you want the delivery within 60 minutes or two hours. There's currently no fee attached to either, but it looks like Tesco is thinking about charging £6 for the quicker option and £5 if you can wait that bit longer -- comparable to Sainsbury's and Amazon's delivery charges."

    Engadget goes on to say that "this is very much a private trial, so there's no guarantee Tesco will actual launch a one-hour service, and it might look completely different if and when it does. However, Tesco does support shopping orders through Amazon Alexa and more recently, Google Assistant, so it's arguably in the best position to play Amazon at its own game."
    KC's View:
    Well, maybe not as much a "private trial" as Tesco would've wanted.

    But we may be at a point where things like one-hour delivery services could be the cost of being in the business, and not anything unusual.

    Published on: May 19, 2017

    • The Hartford Courant reports that Instacart is launching its delivery service in Connecticut this week, providing consumers with the ability to order from Big Y, BJ's, Costco, PriceRite and Whole Foods Market, among others. Instacart now operates in 50 US markets.
    KC's View:

    Published on: May 19, 2017

    Bon Appétit reports that Nutella manufacturer Ferrero plans to open a Nutella Café in Chicago at the end of the month, and the story describes it as "a grab-and-go coffee spot (that) will also offer a full menu of both savory and sweet treats - all of which, you guessed it, will feature Nutella to some degree."
    KC's View:

    Published on: May 19, 2017

    We had a story yesterday about Amazon considering an entry into the $300 billion pharmacy business, which prompted this email from an MNB reader:

    As the spouse of a long-time pharmacist who is active in both her state and national pharmacy organizations, this is truly scary.   Between the enormous growth of the number of pharmacy schools in the US over the past decade and the resulting increase in pharmacy graduates, we are already approaching a glut of practitioners who are challenged to find a desirable pharmacy job.   Adding Amazon to this equation as a pharmacy services provider will make their futures even more uncertain.

    Retail pharmacists in particular have been struggling with clarifying their value proposition to their patients as more and more of their time is tied up with haggling with other medical providers and pharmacy benefit managers, instead of listening to and counseling patients.   The need to process and fill a minimum number of scripts on an hourly or daily basis to demonstrate efficiency in a retail setting is also preventing pharmacists from doing much more than just handing a bag to a patient.   All of these realities are causing retail pharmacists to not be able to demonstrate their depth of medical resources to patients; these issues limit the effectiveness of pharmacists as medical providers who can work with physicians and other providers to improve compliance, reduce med errors, and provide better outcomes at a lower cost to the US medical system.

    It is with all of this in mind that potential competitors like Amazon believe they can commoditize pharmacy services and boil them down to the shipment of a package to a patient, much like many pharmacy benefit managers already do.   However, without that face-to-face personal contact with a single pharmacy on an ongoing basis, a patient misses out on a valuable opportunity to both ask questions and receive counseling from an enormous wealth of medical knowledge who could save them time, money, and precious medical resources, in addition to becoming an advocate for that specific patient in dealing with other healthcare providers.

    In order to preserve the future of retail pharmacists, it will be essential that they do a better job of telling this story to patients and employers along with  demonstrating these talents to all in order to preserve their role in the US medical system and not allow the Amazons of the world to perceive that pharmacists can be replaced by a computer and a delivery service.

    From MNB reader Carol Lynn Breedlove:

    If I were CVS or Walgreens, I would be looking to make an alliance with Amazon. 
    1.       Order online. Pick up in store.
    2.       Order in store. Amazon delivery.
    3.       Both CVS and Walgreen are ubiquitous and their stores could serve as pick up point points for any Amazon order.
    4.       If I were CVS or Walgreens I would love the built in line to all the Prime (and non-Prime) Amazon members.
    5.       Etc. etc. etc.

    The magic, I think, is in the etceteras...

    We also had a story yesterday about how Amazon is expanding the capabilities of its Alexa-based digital assistants, allowing users to enable them to provide notifications without being verbally prompted.

    Prompting one MNB reader to write:

    We love our Echo and can’t wait for these improvements. However I began to think about the seemingly hourly “breaking news” out of our nation’s capital, wonder how long it will take before Alexis starts flashing red…….and states “time to hit the mattresses” and it is not a Target ad?

    From another reader:

    This sounds like Bezos’s ideal scenario: left-leaning WAPO news pushed to you so quickly that there’s no need to look at the paper, watch TV or check your twitter feed.  It’s brilliant.

    I sense sarcasm here.

    We posted an email yesterday from an MNB reader who suggested that there are two kinds of retailers - those with Merchandising Driven Retail Cultures and those with Operations Driven Retail Cultures.

    I responded that at Amazon, they'd probably define their business as being Customer Driven ... which prompted MNB reader Andy Becker to respond:

    Which is why Amazon is assimilating competition like the Borg. Most retailers are not thinking of the customer experience first. It's somewhere down the list.

    Got the following email from an MNB reader:

    It’s funny the many common interests we have. The works of Robert B. Parker, especially Spenser. Connelly’s Bosch and the exceptional Amazon series. And today, with the legacy Powers Boothe has left behind, you make it a point to singularly mention in your KC’s View what was my favorite role – Boothe’s take on Philip Marlowe on HBO in the ‘80s. I was in high school when it aired – and my dad and I considered it our weekend companion piece to the "Spenser: For Hire" series airing concurrently on ABC. Even today, when I revisit the Chandler source material, I have Powers Boothe’s voice in my head as Marlowe.

    I consider myself fortunate to have found the entire HBO run a few years ago on DVD … through Amazon, of course. And not two weeks ago – cosmically, who knows how these things work – I was marveling at how amazing it would be if today Boothe reprised his Marlowe, even more world-weary, some thirty years on, plying his PI trade in 1960s Los Angeles. “To say goodbye is to die a little.” I’ll miss his work, and the wonder of what could have been.

    And, from MNB reader Chris Esposito:

    Kevin, just finished up this season’s "Bosch" last week and found it riveting.  I’m a huge Penguins fan and I even let the first few minutes of the game go the other day to watch the end of the last episode (even though I could have just paused it).  I really love the way they have kept to the overall atmosphere Connelly developed in his books and brought that to the screen.  I’m just hoping Connelly can keep banging out some more novels so we can keep the series going on Amazon Prime! 
    KC's View:

    Published on: May 19, 2017

    I've been thinking a lot over the last week or two about a piece that ran in the New York Times about a week ago by novelist Edan Lepucki.

    The story was about her mom ... but about her mom before she became her mom.

    "In one of my favorite photographs of my mother, she’s about 18 and very tan, with long, blond hair," she writes. "It’s the 1970s and she’s wearing a white midriff and cutoffs. My dad is there, too, hugging her from behind, and from the looks of it, they’re somewhere rural — maybe some pastoral patch of small-town New Jersey where they met.

    "I haven’t seen this photo for years, I have no idea where it is now, but I still think of it — and, specifically, my mom in it. She looks really sexy; wars have been waged over less impressive waist-to-hip ratios. And she is so young and innocent. She hasn’t yet dropped out of college, or gotten married. The young woman in this photo has no idea that life will bring her five children and five grandchildren, a conversion to Judaism, one divorce, two marriages, a move across the country."

    After completing a novel about mother-daughter relationships, Lepucki "put out a call on social media for photos from women of their mothers before they were mothers," and some of those photos and stories are featured in the Times piece.

    Lepucki writes, ""I asked contributors to tell me about their moms or the photo submitted, and they often wrote that something specific and special about their present-day mother - her smile, say, or her posture - was present in this earlier version. What solace to know that time, aging and motherhood cannot take away a woman’s essential identity. For daughters who closely resemble their moms, it must be an even bigger comfort; these mothers and daughters are twins, separated by a generation, and an old photo serves as a kind of mirror: How do I look? Even if there isn’t a resemblance, we can’t help but compare ourselves to our young mothers before they were mothers."

    I'm not a daughter, but Lepucki's story resonated with me. It made me think of one of my favorite pictures of my mom, which you can see above. She died more than 19 years ago, at age 67 ... but in the picture. you can see someone who was probably in her late teens or very early twenties, someone who had not yet experienced a happy, more than four decade marriage, raised seven children, or spent four years fighting lung cancer. The picture is at once filled with expectations, and yet there are none, because my mom seems completely in the moment. It all seems uncomplicated.

    I find myself thinking that this is something we should all consider about all our parents, perhaps especially when they are still with us. Lepucki makes an important point - that these pictures show us not just how our parents were, but also how they are. Because if our parents seem less complex at that early stage of their lives - as we all are - there is an essence in those moments that remains a part of them later in life.

    I recommend Lepucki's thoughtful piece, which you can read here.

    The notion that we're living in some sort of new Golden Age of Television has become a kind of cliche, but then something new comes along that reinforces the notion. That's exactly what Hulu's "The Handmaid's Tale" has done for me, offering a horrifying view of a dystopian near-future in which society has fallen victim to all its worst impulses.

    Many dystopian books and movies focus on how violence and war have laid waste to society, but "The Handmaid's Tale" - based on a novel by Margaret Atwood - shows a world in which a misogynist theocracy, apparently emboldened some sort of terrorist attack that enabled a kind of Marshall Law, has imposed a terrifying order on the citizenry. Men are totally in control, and women have been entirely stripped of their rights. But, with a kind of manipulative brilliance, men have created a kind of caste system for women, essentially getting the women at the top of the system to buy in, because they, at least, are not as bad off as those at the bottom.

    Complicating the situation is the fact that infertility has become a kind of plague, creating one level of caste - the handmaids - who are the only women capable of bearing children. They're not allowed to read or write or have any sort of freedom; their central role is once a month to be raped by the man of the household where they live, with the full assent and participation of the man's wife.

    If this all sounds grim, it is. What makes it all work is the amazing performance of Elizabeth Moss, who plays Offred (she does not have her own name anymore - she is, quite literally, "of Fred"). We see some of her past life in flashback (her resistant husband was killed, her daughter taken away), but even as we watch her current life, we also hear her thoughts in narration, which provides not just commentary but also rueful context, even some humor, and some root, resistant strength.

    I cannot recommend "The Handmaid's Tale" enough. It can be hard to watch at times, but it serves as a reminder of how easily what we think of as societal norms can fall away when people give way to fear and manipulation. The real brutality of the show is how hope has been destroyed in ways both insidious and overt, and yet there remains the spark of rebellion, buried deep (sometimes very deep) within the hearts and minds of some women. Maybe resistance isn't futile, but only if we remain vigilant.

    That's it for this week. Have a great weekend, and I'll see you Monday.


    KC's View: