retail news in context, analysis with attitude

On the subject of the Facebook debacle, one MNB reader wrote:

Last night my 7-year-old had a bad dream. When I went in to comfort her, she asked me why she had a "bad brain" that would give her these upsetting thoughts. "Your brain isn't bad; your brain is incredible! It evolved a million years ago to help you find delicious nuts and berries and to help you avoid being eaten by lions. And now we're asking it to play Minecraft, take selfies, calculate postage, cook soup...these are things that didn't exist a million years ago. Some of them didn't exist 5 years ago! So sometimes the berries and lions part of your brain doesn't get it exactly right. You forget to use cold water in the washing machine. Or you get the giggles in class. Or you have a bad dream. Your bonkerballs monkey brain is doing OK.”

I'm sure someone's going to write in with the reminder that Facebook was transparent (if abstruse) with how they were using, and sharing, personal data. They'll spout the Silicon Valley mantra, "If you aren't the customer, you're the product." Fifty years ago, these same people might have smugly insisted that "everyone knew" cigarettes kill and Philip Morris should bear no liability for lung cancer deaths.

But that's BS. Our bonkerballs monkey brains are doing the best they can but Farmville is a far cry from hunting and gathering. We rightfully depend on our public institutions--governments, corporations, non-profits--to help us institutionalize protections against our paleolithic selves. And, when those institutions are perceived as failing us...we have a day of massive nationwide protests led by teenagers.

I do think that what we’ve seen recently in terms of many young people protesting a situation that they find to be intolerable suggests that they are going to be a lot more socially, culturally and politically active than we might’ve thought.

Regarding the Uber self-driving car accident, MNB reader Larry Bourland wrote:

Kevin, I agree, tragic as this accident was, that we cannot predict the demise of self-driving vehicles or other forms of AI development on an isolated incident.  But to be clear I do not see anything in our future that would totally remove the human factor in transportation.  A good example is the current state of our commercial airline industry.  Advanced avionics allow modern aircraft to take off and land without a human touching the controls, but as I set at the gate waiting to board a plane, this frequent flyer will not move without a pilot in the cockpit.

From MNB reader Benjamin Brill:

While the instance of Uber’s killing of a pedestrian in AZ is tragic, I’m convinced that, in the aggregate, autonomous vehicles are already safer than human-controlled ones, and will get more reliable and safer as time goes by, and as fewer human drivers are on the road.  People are crap at long-duration, attention-demanding tasks.

Finally, yesterday we had a story about the various problems being endured by many supermarket chains, and there was the suggestion that these issues might make the food industry seem like an unattractive place for young people to work. This prompted MNB fave Glen Terbeek to write:

To the contrary, I believe that the future of the food industry is very exciting and a great place to work, particularly for marketers (notice I didn’t say retailers) that think local, small locations/individual shopper, by creating and competing on a differentiating value above and beyond distribution value. And by throwing out old industry practices! In fact I believe that the large chains are the ones that are at risk, since they have built their organizations and operating models around central buying and resale of common items (national brands) to “standard” stores. A mass model. Really, is one chain’s Tide better than another chain's Tide? Really, does a shopper care about how many stores a chain has; don’t they only care about “their”store? Remember A&P, Sears, Toy r Us?

I believe the future “marketer" will compete by offering localized solutions, information, education, social, and convenience as examples, in a “store" leveraged by a value added virtual site that enables the shopper to order any item being offered by any manufacturer. The virtual site would support pick up or home deliver. It only makes sense that virtually the manufacturers sets the price and takes the risk for the products performance (advertising/ownership), against like items without retailer interference. Appropriately, the “marketer" will get a fee for creating the shopper’s order, not profit by buying and reselling the item. This will be enabled by what I called the “Barrier buster” in my book, the enabler that connects the shoppers with the products they want virtually thru the “marketer’s” site. Does it make sense to have redundant distribution systems in the same marketplace each carrying the same national brands? Also does it make sense that many great low volume items can’t reach the shoppers due to the high cost of distribution and store redundancy? For items offered in the store, the “marketer” should take ownership when the item enters the store, since that is when they are then taking joint responsibility for the items performance as part of their local offering.

The economics and thus business practices of the industry are out of alignment with the current and future marketplace realities; as defined by the shoppers. These old economics starts with the buy for resale practices where today’s retailer adds no value to a product other than a marketing value, especially in a virtual world. It is one reason we have redundant, yet restrictive distribution systems, creating no value in the shoppers’ mind. Shoppers don’t want to go to many sites (real and/or virtual) to do their shopping. The “marketer” should provide a real and virtual shopping experience for “their” shoppers to win their business and loyalty, and not be restricted by industry practices that won’t let this to happen.

It is time to disrupt the industry before it continues to be disrupted by others. Think Amazon. Daily I read in MNB and other sources about Amazon. They are becoming the “barrier buster” competing by disrupting the industry’s “supply chain” mentality by starting with the needs of the shoppers.

With this said, I think the there is a resounding yes to the question "Can an industry with these sorts of issues be seen as attractive to talented students looking for career opportunities?” We need to change the industry business practices. The big chains need to operate like small chains, actually individual stores. What a great opportunity for young, bright people if we let it happen. The good news is that people need to eat, the market is there. It is a question of who wins the local market share.

KC's View: