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    Published on: June 21, 2017

    by Kate McMahon

    I balked every time my twenty-something daughters told me I needed to get Venmo, but finally capitulated and today use the peer-to-peer (P2P) payment network app for convenience, and also as a verb.

    Now it appears I may have to master Zelle, as well.

    The Zelle P2P payments network begins rolling out this month to more than 86 million mobile banking customers in the U.S., challenging digital upstart Venmo and other cash-alternative competitors. Zelle - pronounced zell and meant to evoke the swift gazelle - s backed by more than 30 of the nation’s major banks, including Citibank, Wells Fargo, JP Morgan Chase and Bank of America.

    For the uninitiated (and most likely older) folks out there, Venmo is the leading mobile app for friends and family to transfer money, split dinner checks and pizza delivery tabs and even pay a dog-walker or monthly rent. For its cult following among many Millennials, Venmo is both an app and a verb, as in “please Venmo me $10 for your share of the pizza.”

    In fact, one study found that pizza is the item most frequently identified with Venmo purchases, not surprising given the target demographic. And we’re talking plenty of slices, given that Venmo processed a whopping $17.6 billion worth of payments in 2016, mostly in small transactions. It’s also no surprise that the banking heavyweights want in on the growing P2P action, which Zelle defines as person-to-person not peer-to-peer.

    I was hesitant to download and use the Venmo app for security reasons. I just couldn’t wrap my head around such a casual transfer of money from my bank account to someone else through a mobile number, email or user name with just a tap on my iPhone. But I researched the app and learned it was owned by PayPal, had bank encrypted security and was named one of Fortune magazine’s breakthrough brands of 2017. I also heeded the advice in every consumer article to only use Venmo with family and friends, and to customize my privacy settings. (Beleaguered White House press secretary Sean Spicer did not and was harassed by internet pranksters in February when his Venmo account was revealed on Twitter.)

    Venmo has a social component as well. Users frequently add emojis (pizza slice, mug of beer, party balloons) and comments with their payments, which a posted on a “stream” among friends. And if a friend has not paid you back, you can gently “remind” them what they owe.

    In addition to Venmo, other mobile payment players include Popmoney, Square Cash and Apple Pay. Apple recently announced it would be launching a money transfer service in the fall.

    Though just announced last week, the Zelle roll-out has been in the works for years. Like Venmo, the “Send Money with Zelle” app allows users to send and receive funds from one bank account to another utilizing an email address or a mobile number.

    Unlike Venmo, there are no emojis or comments. And while Venmo transactions can take up to a day to process, Zelle allows for funds to be sent in minutes.

    Venmo has stepped up its game in response, and plans to expand its Pay with Venmo feature to include “millions” of Pay Pal merchants. The company announced yesterday that Pay Pal and Venmo users can instantly transfer money to their bank accounts via eligible debit cards, in no more than 30 minutes. There will be a 25-cent fee per transfer.

    I checked my bank (Wells Fargo) and Zelle is slated to be available to consumers online on June 28th. If marketed properly, I think Zelle will appeal to customers who want a P2P network safely entrenched in a secure, existing online bank site and app.

    But I’m not sure it will be able to lure away the Venmo fans who clearly enjoy the social banter and emojis that are integral to their banking experience.

    One thing is certain – the digital wallet is here to stay and there will be plenty of competition for the cash alternative. Forward thinking retailers should already be trying to maximize the mobile payment movement before there is another verb for it.

    Comments? As always, send them to me at .
    KC's View:

    Published on: June 21, 2017

    The Cincinnati Business Courier reports that Barclays analyst Karen Short is saying that she “would not be surprised” if other companies - including Kroger and Target - make bids for Whole Foods that would compete with the $13.7 billion offer from Amazon.

    "Even if those retailers don’t outbid Amazon, they could jump into the game to drive up the price and force Amazon to pay more," the story says, adding that "the Amazon-Whole Foods deal has left analysts guessing about what will happen in an industry with already shrinking profit margins that has been in a transition. On Monday some watchers floated an idea that Kroger could enter into a huge merger with Dutch supermarket operator Ahold Delhaize in order to better battle Amazon."

    Meanwhile, the Washington Post reports on how "analysts and investors speculated that Seattle-based Amazon could be setting its sights on organic grocer Sprouts, discounters DollarTree and Dollar General, and used-goods purveyors such as Plato’s Closet and Once Upon a Child. The Whole Foods deal, analysts said, signaled that Amazon — which until now had focused mostly on scooping up niche businesses and technology start-ups — is serious about buying established bricks-and-mortar businesses.

    "'Amazon has opened Pandora’s box by showing a willingness to spend billions of dollars,' said Tom Forte, managing director of Maxim Group, an investment banking firm in Manhattan. 'Now analysts like myself can have fun making speculations on what types of acquisitions are next.'

    "Forte, for his part, has outlined 18 immediate opportunities for Amazon, including expansion into hardware stores, gas stations and pharmacies. But the most obvious targets, he said, are BJ’s Wholesale Club (which would come with a network of gas stations), Warby Parker (which could help Amazon get into the prescription-eyeglasses business) and Everlane (which has made a business being transparent about the pricing of its American-made apparel)."
    KC's View:
    First of all, "guess" is the operative word here. I'm not sure how many folks would've predicted the Whole Foods deal, and Jeff Bezos is nothing if unpredictable.

    Will there be repercussions? Sure. Collateral damage? Almost certainly. Unexpected developments? Probably.

    More surprises? I'd bet on it. The winners will be the companies that are able to keep the competition off balance. At this point, I think we all know what company has been doing this.

    Published on: June 21, 2017

    Amazon continues to demonstrate that even as it makes news with its proposed $13.7 billion acquisition of Whole Foods, it continues to expand its notion of a consumer-oriented ecosystem.

    GQ reports that Amazon has announced the introduction of what it is calling Prime Wardrobe. It is, the story says, "a familiar concept: click-to-buy a few things on their site, have them shipped right to your doorstep (you lazy monster), try them on, ship the castoffs back, never to be thought of again, and pay only for what you keep. And voilá—you're stylish!

    "Well, maybe it's not so easy, but you get what they're trying to sell. This isn't Amazon's first foray into fashion, earlier this year they unveiled the Echo Look which will ostensibly help you dress better and order toilet paper, and they even have a full men's fashion retail site, East Dane."

    TechCrunch went into greater detail, describing it this way: "First you pick at least three items, and up to 15, from more than a million Amazon Fashion options, including clothes, shoes and accessories for kids and adults, to fill your Prime Wardrobe box with no upfront cost. Brands available include Calvin Klein, Levi’s, Adidas, Theory, Timex, Lacoste and more. Once the Amazon Prime Wardrobe box arrives, you can try on the clothes for up to seven days. Then you either schedule a free pick-up or drop the resealable box with its pre-paid shipping label at a nearby UPS to return whatever you don’t want. Keep three or four items from the box and get 10 percent off everything, or keep five or more for 20 percent off. You only pay for what you keep, with no charge upfront. Amazon Prime Wardrobe is free for Prime members with no extra fees."

    Meanwhile, GeekWire reports that Amazon has "just introduced a new Alexa device: a $20 version of its Amazon Dash Wand with the voice-enabled smart assistant built in for ordering food, getting recipes and controlling smart-home devices. The new device is exclusive to Prime members, and works in conjunction with the AmazonFresh grocery service.

    The story goes on: "This looks to be the smallest and most inexpensive Alexa-enabled device yet, extending the virtual assistant further beyond the existing Echo smart speaker lineup. Amazon describes the device as 'essentially free' because customers will get a $20 Amazon credit when they register the device.

    "Unlike Amazon’s other Alexa-enabled devices, the device does not support music playback, which would have been quite a trick given the size."
    KC's View:
    The new-and-improved Dash wand simply drives home something that always has been true - that this technology is designed to make it easier for people to buy stuff, mostly by absorbing them into Amazon's seductive and irresistible ecosystem.

    As for the Prime Wardrobe ... well, it sure sounds a lot like StitchFix to me.

    TechCrunch makes the salient point, that "a decade ago, Jeff Bezos said 'In order to be a $200 billion company we’ve got to learn how to sell clothes and food'."

    Done and done. And more. Much more.

    Published on: June 21, 2017

    Walmart announced that with the $310 million acquisition of upscale men's fashion retailer Bonobos, it has named Andy Dunn - founder and CEO of Bonobos - to oversee Walmart's "collection of digitally-native vertical brands. These are brands born online, and owned from design through distribution. The brands will be offered on and possibly other Walmart brands in a variety of countries over time, and include Bonobos and recently-acquired ModCloth."

    Dunn will report directly to Marc Lore, who became president and CEO of Walmart U.S. eCommerce after Walmart acquired his company, Jet.
    KC's View:
    The Walmart strategy seems to be not just to acquire companies, but also acquire the competitive intelligence residing inside the brains of the people who run them, and then putting them to work re-engineering the Walmart universe.

    Published on: June 21, 2017

    Reuters writes about speculation that once Amazon "completes its takeover of high-end grocer Whole Foods Market, it might launch another brand with different standards."

    The speculation was prompted by a statement that Whole Foods CEO John Mackey made in a town hall meeting with employees, when he said, "Over time, there could be other formats that evolve that - that might - wouldn't be branded Whole Foods Market, potentially, wouldn't be our standards."

    According to Reuters, "The remarks offered a preview into how e-commerce giant Amazon might turn around the sluggish sales of Whole Foods since announcing on Friday it would buy the company for $13.7 billion, including debt. Industry observers have said that Amazon may add a selection of discounted, non-organic food to distance the chain from its 'Whole Paycheck' nickname.

    "Whole Foods already has a separate store, called 365, which offers private-label goods and lower prices than its typical formats. The company has needed to tread a fine line between introducing more conventional and affordable products, while maintaining the allure of a premium brand."
    KC's View:
    At some level, I do think we all have to take a deep breath. Whole Foods hasn't proven that it can run multiple formats yet, and so I'm not sure Amazon is suddenly going to start producing Whole Foods spinoffs.

    I do think they can make the 365 format work, though - since it always has been intended to a) appeal to millennials, b) do a better job integrating technology, and c) creating a lower-priced image. Amazon is really, really good at these three things, and I don't think Whole Foods is. This could be a big opportunity.

    Published on: June 21, 2017

    Richard Anicetti, CEO of The Fresh Market for less than two years, has resigned from the job.

    The Triad Business Journal reports that the chain's owner, Apollo Global Management, "has appointed Brian Nicholson, chief financial officer of The Fresh Market as interim CEO, while a search is conducted."

    No reason was given for Anicetti's departure. Previous to joining The Fresh Market, where he was engaged in a broad effort to streamline the company's operations and make it accessible to more shoppers, Anicetti was CEO of Food Lion as well as an executive with Hannaford.

    The Business Journal writes that The Fresh Market was recently ranked as "the No. 4 worst place to work in the country by business website 24/7 Wall St., with the company responding in part: 'We believe that every day at work should be a great day at work, but this survey confirms that we have work to do to achieve that belief'."
    KC's View:
    I have no inside information about what happened here, I have no idea what sort of non-compete Rick Anicetti might have, and I don't even know if there is any history here of which I ought to be aware. But it does occur to me that just yesterday,Ian McLeod stepped down as CEO of Southeastern Grocers, parent company to Bi-Lo, Winn-Dixie and Harveys. Could Anicetti be a candidate for this job? Just asking...

    Published on: June 21, 2017

    ...with brief, occasional, italicized and sometimes gratuitous commentary…

    • The Seattle Times reports that Starbucks is going to make good on a previous commitment, and is going ahead with plans to hire 2,500 refugees to work in its European cafes.

    The announcement came on World Refugee Day, and the company said it "would hire 2,500 refugees by 2022 to work in eight European markets: Great Britain, France, Austria, Switzerland, Spain, Portugal, Germany and the Netherlands."

    The story notes that "the hiring plans are part of a commitment then-CEO Howard Schultz made in January, after President Donald Trump had signed an executive order suspending U.S. entry of all refugees for 120 days and barring Syrian refugees indefinitely ... Schultz’s announcement drew support as well as backlash. Some blasted the company for focusing on hiring refugees rather than U.S. veterans — though Starbucks has had in place since 2013 a commitment to hiring 10,000 U.S. veterans and military spouses. The company said in March that it has met that goal, and set a new goal of hiring 25,000 veterans and military spouses by 2025."

    The central problem seemed to be that some folks had a knee-jerk reaction to the Starbucks announcement, assuming that if the company was going to hire refugees it couldn't possibly also be hiring veterans. (Maybe they never read F. Scott Fitzgerald, who once wrote that "the test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.") Add to this the fact that some folks don't seem to know the difference between refugees and immigrants, or refugees and illegal immigrants.
    KC's View:

    Published on: June 21, 2017

    • Ahold Delhaize announced that Nick Bertram, currently SVP of merchandising for Ahold USA, has been named president of Giant.Martin's, effective early next year. Bertram will succeed the retiring Tom Lenkevich.
    KC's View:

    Published on: June 21, 2017

    ...will return.
    KC's View: