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    Published on: August 6, 2018

    by Kevin Coupe

    MNB readers won’t be surprised to see today’s Eye-Opener … that it was announced over the weekend that Patrick Stewart will return to the role of Jean-Luc Picard in a new Star Trek series that will run along with “Star Trek: Discovery” on the CBS All Access streaming network.

    No word yet on where and when the series will be set, nor when it will premier. We do know that it is not a reboot of “Star Trek: The Next Generation,” the series in which he first brought Picard to life, and it will explore “the next chapter” of Picard’s life.

    In announcing the new series at a Star Trek convention (of course!), Stewart said that it was “an unexpected but delightful surprise to find myself excited and invigorated to be returning to Jean-Luc Picard and to explore new dimensions within him. Seeking out new life for him, when I thought that life was over. During these past years, it has been humbling to hear many stories about how ‘The Next Generation’ brought people comfort, saw them through difficult periods in their lives or how the example of Jean-Luc inspired so many to follow in his footsteps, pursuing science, exploration and leadership.

    “I feel I'm ready to return to him for the same reason — to research and experience what comforting and reforming light he might shine on these often very dark times. I look forward to working with our brilliant creative team as we endeavor to bring a fresh, unexpected and pertinent story to life once more.”

    I can’t wait.

    Now, there are all sorts of business lessons that can be taken from this announcement.

    One is that this new series almost certainly is possible because all the rules of traditional broadcasting have been set aside. I’m not sure there would be either a network nor an audience for a 22-episode season of what, for the moment, we’ll call, “Star Trek: Picard.” But on CBS All Access, they can make six, eight, ten or a dozen episodes … it doesn’t matter. (“Discovery” had a 15-episode first season, plus they are planning to run a series of 10-15 minute short films - “Short Treks” - designed to focus in a deeper way on small stories and individual characters.)

    This is so important, because it speaks to the ways in which traditional constructs are being put aside in the interest of creating products that will be of greater interest and more relevant to audiences. That’s more and more true whether you are a television network or a retail store … you no longer have to fit new ideas into old boxes.

    Another lesson we can take from it, I think, is to just pay attention to the character of Picard, and the ways in which he deals with problems and acquits himself as a leader. He is a wonderful role model in the series and four movies that followed - the very definition of calm, nuanced, reasoned disciplined, thoughtful, moral and ethical leadership.

    “Star Trek: Picard” will, I think, be an Eye-Opener.
    KC's View:

    Published on: August 6, 2018

    The Verge has a piece about the ongoing - and expanding - battle between Walmart and Amazon, suggesting that it has forced Walmart “ to reexamine its DNA” while Amazon “continues to grow, specifically in key areas like cloud computing, where its profit margins are huge, and offline retail, where it can steal Walmart customers, thanks to its purchase of Whole Foods and its aggressive expansion into grocery and household good delivery.”

    The story notes that circumstances have forced Walmart to partner with a number of tech companies at it looks to keep pace with Amazon, and “the big picture this paints is of a legacy retail brand — one of the biggest on the planet — that’s now fiercely hungry to compete and stay relevant in a world moving slowly but surely toward online commerce, on-demand delivery, and bundled services.”

    The two companies, the story suggests “have arrived at an embittered rivalry, with Amazon increasingly moving offline as its online business continues to dominate e-commerce, and Walmart rethinking its future as customers decide to buy more everyday items online and have them delivered.”

    You can read the entire analysis here.
    KC's View:
    This really isn’t news to anyone who has been reading MNB for any period of time - we’ve been writing here about the coming conflagration between Amazon and Walmart, and the expected (and even unexpected) collateral damage that will result, for years.

    I do think, though, that the point about Walmart reexamining and reconfiguring its DNA in order to better deal with new challenges is a good one. They’ve been more nimble than I would’ve expected, and we’re seeing the same willingness, to varying degrees, from Kroger and Albertsons. This isn’t easy, by any means, and I think some companies will be better than others. There will, of course, be companies that will fall back into old habits because they have to worry about the next quarter’s numbers or because that’s just easier or because there are any number of reasons … and they will be the companies that end up in trouble.

    It is very simple. Everybody has to rethink everything.

    Published on: August 6, 2018

    VentureBeat reports that Walmart has made public “a partnership with Massachusetts-based retail automation company Alert Innovation that’ll see the latter’s Alphabot technology deployed in a 20,000-square-foot extension connected to the Salem superstore by 2019.”

    What’s an Alphabot?

    According to the story, an Alphabot system “consists of automated carts that retrieve items from storage containers and deliver them to store clerks, who assemble orders and prep them for in-store pickup or delivery. Walmart said that the ‘majority’ of shelf-stable, refrigerated, and frozen foods will be transported this way, the exceptions being produce and ‘other fresh items’.”

    VentureBeat quotes Walmart as saying that “with the aid of Alphabot, our associates will have more time to focus on service and selling, the two things they often tell us are the most enjoyable part of the job, while the technology handles the more mundane, repeatable tasks. Although this is a small pilot, we expect big things from it.”
    KC's View:
    This actually ties into the story above … everybody is looking for the edge, the alliance, the acquisition that they can make that will give them just a little advantage for a few minutes or days or weeks … and then they go hunting for the next one. The thing they cannot do is be complacent.

    Published on: August 6, 2018

    The Wall Street Journal over the weekend featured a commentary piece by Henry I. Miller - described as “a physician and molecular biologist … a fellow at Stanford University’s Hoover Institution,” and the “founding director of the FDA’s Office of Biotechnology” - in which he attacks the organic food business as being rife with “blatantly false and deceptive advertising claims.”

    An excerpt:

    “Consider the Whole Foods website, which explicitly claims that organic foods are grown ‘without toxic or persistent pesticides.’ In fact, organic farmers rely on synthetic and natural pesticides to grow their crops, just as conventional farmers do, and organic products can contain numerous synthetic as well as natural chemicals. As observed by UC Berkeley biochemist Bruce Ames and his colleagues in 1990, ’99.99% (by weight) of the pesticides in the American diet are chemicals that plants produce to defend themselves’.”

    Another excerpt:

    “In addition to blatant untruths, food marketers are masters at subtly misleading consumers. A favored technique is the ‘absence claim’ —asserting a meaningless distinction between products in order to make theirs seem superior. Generally, the FDA comes down hard on such behavior. They would never allow an orange-juice producer to label its product ‘fat free,’ for example. To claim an absence of a certain ingredient, there has to be a ‘standard of presence’ in that product to begin with, and there is no fat in orange juice.

    “But Tropicana gets away with labeling its orange juice ‘Non-GMO Project Verified,’ and Hunt’s labels its canned crushed tomatoes ‘non-GMO,’ even though there are no GMO (genetically modified organism) oranges or tomatoes on the market. In fact, absence claims about GMOs are never enforced: I was unable to find a single FDA warning letter or other enforcement action against deceptive ‘non-GMO’ labeling.”

    Miller concludes:

    “Giving the organic industry and others a pass to engage in such active deception undermines consumers’ choice, erodes trust in the market, and rigs the game. Consumers need aggressive FDA action to curb these abuses and level the playing field.”

    You can read the entire piece here.
    KC's View:
    On this one, I think I’m going to let members of the MNBV community respond. I think that every industry has manipulators and deceivers, but I’m a little surprised that this fellow is using such a broad brush.

    Published on: August 6, 2018

    CNBC reports that Starbucks “ is working with Microsoft and a leading global exchange on a new digital platform that will allow consumers to use bitcoin and other cryptocurrencies” in its stores.

    The partners are said to be working together to launch a new company called Bakkt “that will enable consumers and institutions to buy, sell, store and spend cryptocurrencies on the global network by November. The platform will convert bitcoin and other cryptocoins into U.S. dollars that can be used to buy a Cold Foam Cascara Cold Brew, Matcha Lemonade or anything else at Starbucks.”

    But … not just yet.

    Gizmodo quotes a Starbucks spokesperson as saying that “it is important to clarify that we are not accepting digital assets at Starbucks. Rather the exchange will convert digital assets like Bitcoin into US dollars, which can be used at Starbucks. At the current time, we are announcing the launch of trading and conversion of Bitcoin. However, we will continue to talk with customers and regulators as the space evolves.

    “Customers will not be able to pay for Frappuccinos with bitcoin,” the spokesperson wrote.

    The CNBC story notes that “cryptocurrency skeptics have challenged its use for payments because of its volatility. Bitcoin for example, has dropped by roughly 50 percent this year, and its value often changes by hundreds of dollars in a single day. But with Starbucks taking cryptocurrency seriously, it could help bitcoin break through as a mainstream currency. It could also be bullish for prices, which have struggled to find footing since the end of 2017.”
    KC's View:
    Probably smart to that the whole cryptocurrency thing seriously … it’ll give companies that do an advantage when the time is right.

    Published on: August 6, 2018

    Phononic is out with a new study into the competitive sets and consumer behaviors seen as having the greatest potential impact on the supermarket industry … and, no surprise, Amazon is at the top of the list.

    Some excerpts:

    • “When asked to identify the biggest grocery disruptors, over half of food retail executives (54%) pointed to Amazon, two in five (41%) identified Walmart, and one-quarter (25%) said online food delivery services, while smaller numbers believe it’s Kroger (10%) and Target (8%).

    • “A common offering among these top disruptors is home delivery. While two-thirds of Americans (66%) have yet to try a food or meal delivery service, one-third have. Despite increasing delivery and e-commerce options, overall four in five Americans (82%) say they like shopping in the typical grocery store.”

    • “Three in five food retail executives (60%) say their organization does invest enough in in-store technology, and seven in ten (70%) say, when it comes to implementing new technologies to improve customer experiences, their organization is proactive. Despite a view of proactiveness, almost half of food retail executives (49%) say grocery stores haven’t yet figured out how to use technology like other retailers have. Half of consumers (50%) agreed with this statement.”

    • “Looking ahead five years, almost nine in ten food retail executives (85%) say it is likely more physical stores will be offering ways to auto-replenish basics; four in five (81%) say it is likely that there will be pop-up supermarkets in urban and rural areas to make it easier to shop; almost two-thirds say it is likely that supermarkets will become more of a community social gathering place with bars and restaurants (65%), and that the majority of supermarkets will be checkout free (64%).”
    KC's View:
    The one I have the most trouble with is the third point … it just seems to suggest a level of denial about the kinds of investments needed to make the store differentiated, relevant and resonant.

    Published on: August 6, 2018

    The Wall Street Journal reports that “ticked-off Canadians, irked by U.S. metals tariffs and President Trump’s harsh words for their prime minister, are boycotting American products and buying Canadian.”

    According to the story, “The push to buy more Canadian products—and to boycott American ones—gained strength after the U.S. levied 25% tariffs on Canadian steel and 10% on aluminum starting June 1 and President Trump called Canadian Prime Minister Justin Trudeau ‘very dishonest & weak’ on Twitter following a Group of Seven meeting the following week. Canada in turn imposed retaliatory tariffs on some U.S. products, including foodstuffs such as ketchup, orange juice and yogurt.”

    The Journal notes that Canada “is the U.S.’s top export market, taking a little more than 18% of all U.S. goods that are sold abroad. Sylvain Charlebois, a professor in food distribution and policy at Dalhousie University in Nova Scotia, estimates roughly 40% to 60% of food on Canada’s grocery shelves is from the U.S.”
    KC's View:
    Hard to imagine this tariff thing working out anytime soon. The Wall Street Journal this morning has a story about how “the European Union, Canada, China and Mexico have launched retaliatory tariffs” on cranberries, “a species native to North America that has suffered from overproduction in recent years. That is threatening to reduce demand for cranberries, hurting farmers who grow them and leading companies abroad to substitute other juices and berries rather than raise prices for consumers. The average price for cranberries has fallen below $30 a barrel—$5 below the cost of production—and growers say they expect prices to slide even further as sales abroad dry up.”

    And here’s the thing - the Journal notes that “most of the cranberry bogs in the U.S. happen to be in House Speaker Paul Ryan’s home state of Wisconsin.”

    Cranberries. Who would’ve guessed?

    Published on: August 6, 2018

    The Associated Press reports that Wayfair, the online furniture retailer, is planning to open its first bricks-and-mortar store, n Florence, Kentucky, a dozen miles from Cincinnati.

    According to the story, “the 20,000-square-foot outlet store will sell items that have been returned but are in good condition, as well as other discounted goods.”
    KC's View:
    Seems like a good way to test out a physical store, while finding a way to get rid of the used stuff and the stuff nobody wants.

    Published on: August 6, 2018

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

    USA Today reports that the Centers for Disease Control and Prevention (CDC) is saying that “some 395 people have become sick from eating tainted McDonald's salads … The illnesses have been linked to salad mix contaminated with the Cyclospora parasite, which is spread through fecal matter. Sixteen individuals have been hospitalized, according to the CDC.”

    People in 16 states have been affected, mostly in the midwest.

    The story says that “shortly after people began getting sick last month, McDonald's voluntarily stopped selling salads at impacted restaurants and switched salad suppliers. On July 26, a U.S. Food and Drug Administration analysis confirmed that McDonald's supplier Fresh Express was the source of the problem. The analysis found Cyclospora in a sample from an unused package of salad mix with romaine lettuce and carrots. The package's expiration date had already passed.”

    National Public Radio reports that Guinness has opened its first US brewery in more than 60 years, in Halethorpe, Maryland … but it will not be brewing Guinness Stout there.

    Peter Simpson, the head brewer at the Open Gate Brewery in Dublin, Ireland, says, “"I think Guinness stout is such an iconic stout, it has such strong links back to Dublin and back to Ireland, that it would feel wrong to take it away from Ireland and to brew it over here. So it is always going to still be brewed back in Dublin.” The brewery will mostly make Guinness’s blonde lager.

    The story notes that “Guinness and its parent company, Diageo, spent $90 million to convert a large distillery into the Open Gate Brewery and Barrel House. The company's hoping to attract 300,000 visitors a year.”

    Next time I’m in the vicinity, I’m stopping by for a tour. And maybe a taste. Sounds wonderful … and, after all, I’ve been to the Dublin version. In the interest of being informed, I think I have to make the trip to Maryland.

    Newsday reports that when the Stew Leonard’s in Farmingdale, Long Island, decided to run a promotion for a new rosé called Hampton Water, which is made from Grenache, Cinsault and Mourvèdre grapes, customers in the store did not expect that winery owner (and legendary rock star)  Jon Bon Jovi would show up, along with his son (and partner in the venture),  Jesse Bongiovi.

    “It's just so exciting," said one customer. "'Living on a Prayer' is my song. I have goose bumps.”

    Stew Leonard’s said that the wine, made in the Languedoc region in the south of France, was launched earlier this year, via a collaboration with French winemaker Gerard Bertrand.
    KC's View:

    Published on: August 6, 2018

    • Sprouts Farmers Market announced that Dave McGlinchey, the company’s senior vice president of merchandising services, has been named Chief Merchandising Officer, a newly created position at the company.
    KC's View:

    Published on: August 6, 2018

    A story about mass transit redefining cities, and how these kinds of urban-centric shifts will affect shopping behavior, led one MNB reader to write:

    The problem with Mass Transit is that it requires huge subsidies.  The Central Ohio Transit Authority gets less than 20 percent of its revenues from the farebox.  We pay an extra 0.5 percent sales tax for COTA, and then there are federal subsidies.  The city has been talking about light rail but there is really no way to pay for it.  The entire country is paying for the fine Washington, DC metro light rail system and even then planned expansions keep getting delayed for lack of money.   Even then, on a vacation trip with our grandchildren it was no more expensive to take a taxi than to pay multiple Metro fares, and a lot more convenient.

    I still think mass transit has to be a public enterprise, not a private one…though i’m happy to have a conversation about how public initiatives are funded and achieved. I believe that great cities, especially going forward, will be in part defined by their commitment to an investment in mass transit, and that it has to be seen as a long-term investment, not a short-term play.

    On the subject of loyalty programs, MNB reader Howard Schneider wrote:

    You hit the nail on the head. The purpose of a loyalty program is to gain data-based insights into individual customer behavior, and use that knowledge to deliver offers and content of value and relevance to incentivize and reward incremental behavior. (And to retain customers at risk of defection.)

    When writing about Apple’s future challenges last week, I quoted the great Norman Mayne, of Dorothy Lane Markets, who once told me that a “reputation is something you had yesterday. Today, you have to earn it all over again.”

    Prompting MNB reader Alex Lemos to write:

    Your last line of the Apple news beat really resonated.

    Our Late, Great, owner Mr. Jack Brown always used to say, “You cant get in today’s game with yesterday’s ticket.”

    We had a story last week about a teacher who gave up his educational career to become a shopper for an online service, leading one MNB reader to write:

    This country never really valued teachers the way other countries did, and subsequently there has been a slow but steady decline in the quality of public education.  Something that should be revered and protected has been allowed to flounder, to the point that our elected leaders think it should be outsourced to private companies.  Are we crazy?

    KC's View: