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    Published on: November 20, 2018

    by Michael Sansolo

    A few months back I wrote about the importance of business people making a trek to Disneyland to get a sense of the future of the consumer experience by seeing how technology and reality are blended.

    I was wrong, but not by that much. Make your trip to Disney World instead and get a lesson in just how far all of this can go…today that is.

    My wife and daughter made the trip to Orlando (sadly, without me) and came back raving with happy stories, but not with the rides, the shows or parades. It was all about the technology.

    My two favorite women stayed at a hotel on the Disney World property and that put them firmly into the future. As guests on property they were each given a wristband that demonstrated just where technology could take us.

    To start with, the wristband served as their room key. So there’s one problem quickly solved. It also served as their entry ticket into the assorted parks and, once in those parks, it served as the way to Fast Pass, reserving a time to get on the busiest rides. So one wristband replaced a key, a ticket and the collection of Fast Pass tickets one gets at Disney.

    Since their package came with certain foods and drinks at the park, the wristbands took care of that as well. When they were in the proper spots to collect those treats they simply had their wrists scanned and everything was handled. What’s more, at one restaurant their meal was brought to their table by wait staff simply able to find them by the wristband.

    There were other elements that they didn’t use. If they wished, they could have tied the band to a credit card so all purchases would have automatically charged back. (In real world terms, it meant neither of them would have needed to carry a purse or bag of any kind.) Plus they could enter important information, such as food allergies so that they couldn’t make a mistake when chowing down. (This isn’t an issue in our family, but I can imagine that would be a huge benefit for parents of small children who have such issues or who simply worry about losing track of one of those same children.)

    Clearly there’s a trade off here. As with so many technologies these days, we are trading privacy for convenience and that’s a trade some may resist. But given all the information people eagerly spill on social media, it’s hard to imagine that a wristband at Disney World would be a make or break issue.

    I have to believe the capabilities of the technology will only grow. In years to come Disney will no doubt use the wristbands to provide additional value such as alerting guests to move to rides with shorter lines. And even the rides will develop the ability to work guests’ names into their performances.

    There’s a point Kevin makes frequently here on MNB about the long-term benefits of frictionless front ends, such as being tried today. Once the shopper experiences these benefits, just like high-speed toll payment systems on highways, they won’t want to go back. It’s not that they are being lazy or entitled. They are simply growing accustomed to how technology can make their lives easier and then they start to expect that level of experience and service everywhere.

    So we have to look at Disney’s experiments with an eye to how they could alter the general customer perception especially in how we use technology. Some day we may have wristbands to guide us to products on the shelves, to help us avoid foods that don’t fit with out diets or even to help us assemble the products necessary for specific recipes.

    That may sound creepy to some, but it’s going to appeal to many shoppers. The future is already here or at least it’s in Orlando.

    Michael Sansolo can be reached via email at . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.
    KC's View:

    Published on: November 20, 2018

    by Kevin Coupe

    The great Steve Carrell guest-hosted “Saturday Night Live” last weekend, and one of the sketches featured him portraying Amazon founder/CEO Jeff Bezos.

    Now, I’m sure that if we took a popular vote of the MNB community, 46.1 percent would find this sketch annoying, while 48.2 percent would be entertained by it. I’m willing to take that risk…

    But here’s the point I want to make about this … the fact is, no matter how you feel about Jeff Bezos, you know who he is, what he looks like, and what he does. That’s the kind of impact and influence that Amazon has on American culture … not just business.

    How many Americans would know who Doug McMillon or Marc Lore are? Rodney McMullen? Jim Donald? Ginni Rometty? Mary Barra? Michele Buck? (Of course, these folks probably are thrilled that they’re not so recognizable.)

    Maybe a lot would know who Howard Schultz is (but I’d still bet a smaller percentage compared to that familiar with Jeff Bezos).

    Some of this is about tech execs, who tend to be more visible than their counterparts in other industries, who only would tend to have high profiles if a) they did their companies’ TV commercials, or b) were indicted.

    Everybody knew who Steve Jobs was, but he was Steve freakin’ Jobs. A lot of people who who Tim Cook is, and Elon Musk, and Richard Branson. And these days, Mark Zuckerberg may be carving out a whole new category, crossing over from being famous to infamous.

    I’d argue that Bezos, for better or worse, is in a class by himself these days.

    Which is why the “SNL” sketch isn’t just funny (to at least 48.2 percent of the population). It also is instructive and Eye-Opening.

    KC's View:

    Published on: November 20, 2018

    SpartanNash said this morning that it has acquired Martin’s Super Markets, a 47-year-old, family-owned company with 21 stores in Northern Indiana and Southwest Michigan and annual sales approaching a half-billion dollars.

    Terms of the deal, expected to close in the first quarter of 2019, were not disclosed.

    Rob Bartels, president of Martin’s and grandson of its founders, said that he was “seeking a partner we could trust with the family’s legacy of exceptional customer service, quality products and value; we found that partner in SpartanNash … We share similar values, a passion for the business, and cultures based on excellent customer service, stewardship of our brands, and commitment to our communities and teams.”

    And David Staples, SpartanNash’s president/CEO, described Martin’s as “a valued independent retail customer since 2005, and we have the greatest respect for the Martin’s management team and its commitment to their associates, customers, and the communities they serve … Our long-standing relationship has built the foundation for our future success and will enable us to grow our corporate retail business in Indiana and Michigan consistent with our long-term strategic growth strategy. We also believe this investment in our corporate retail business will help us take full advantage of our opportunities to generate value for all SpartanNash stakeholders.”

    Martin’s was advised in the deal by Scott Moses of PJ Solomon.
    KC's View:
    Martin’s is a special company, and I have a ton of respect for the people who have made it so special for so long. The reality of the current competitive and economic climate is that it is extremely difficult for independent retailers to sustain their businesses without effective partners, and so, to some degree, there is a game of musical chairs going on. Except that it is not a game, and it isn’t just about finding a seat … it is about finding the right economic and cultural fit, because if an independent’s unique value proposition is corrupted, then the deal doesn’t make sense for anyone.

    From knowing some of the players involved, I’m confident that the Martin’s-SpartanNash deal makes sense.

    Published on: November 20, 2018

    CNBC reports that Kroger said yesterday that its first Ocado-designed robotic warehouse will be opened in Monroe, Ohio, a suburb of Cincinnati.

    According to the story, “Kroger is investing $55 million to build this first location, which is set to measure 335,000 square feet and generate more than 400 new jobs.” It is expected that it will take about two years to open the facility.

    Kroger signed a deal with British pure-play online retailer Ocado to build 20 of its robotic warehouses in the US, designed to make its delivery business more efficient and effective.

    "Kroger is joining with the best partners in the world to co-innovate and leverage technology to redefine the customer experience," Rodney McMullen, Kroger's chairman and CEO, said in a statement Monday. "We are incredibly excited to partner with Ocado to transform the industry and deliver on our Restock Kroger vision to serve America through food inspiration and uplift” and “accelerate our ability to provide customers with anything, anytime and anywhere.”

    Ocado has similar deals with Morrisons in Britain, Casino in France, Sobeys in Canada and ICA Group in Sweden.
    KC's View:
    Expect a fast succession of similar announcements … this is not the kind of process that will be slow and laborious. Because “slow and laborious” are words that, in the current competitive climate, end up on gravestones.

    Published on: November 20, 2018

    Bloomberg reports that Amazon “is offering quick grocery delivery from Whole Foods stores in Chicago and other cities until 2 p.m. on Thursday, an experiment in applying last-minute convenience to holiday meal prep that has already given it an edge with holiday gift shoppers … Amazon’s bet on Thanksgiving is the latest example of how retailers, startups and venture capitalists are trying anything and everything to eke out an advantage as grocery sales move online.”

    One study, by supply chain company JDA Software, predicts that “16 percent of people preparing holiday meals will order groceries online, half of them for the first time,” the story says.
    KC's View:
    Amazon has long worked to make itself the first and often best choice for almost anything that consumers want, but in this case, it also is working to make itself the best last-minute option as well. (The Bloomberg story makes the point that last year, “Amazon delivered its final Christmas order - which included a remote control toy car - at 11:58 p.m. on Dec. 24.)

    I’m not sure how big online shopping for holiday meals is going to get, but I’d guess that whatever percentage I’d pick would end up being lower than the reality. This may reflect my bias - as big as I am on online shopping, I went yesterday to five different stores to pic up various components of our family Thanksgiving meal (and I have at least 2-3 more stores to hit today and tomorrow).

    (There are different trends taking place at the same time, interestingly enough; the Chicago Tribune had a story the other day about how there is a segment of the population - and not just people who think that “Portlandia” is a documentary - that wants to go out to turkey farms, see the conditions and actually meet the turkeys before choosing one for Thanksgiving. Not me, by the way. No way.)

    The reality, it seems to me, is that food retailers - all of them - need to think about how they’re going to approach these changing consumer habits. I would urge them not to think about the competition (though that’s important), and not necessarily to think about all the money venture capitalists are throwing at this segment, but to focus instead on the shopper - and how they actually are behaving and will behave in the future, not how they’d like them to behave.

    That’s where true wisdom resides.

    Published on: November 20, 2018

    Fox Business reports that Sears Holding has asked the bankruptcy court overseeing its affairs for permission to pay “millions of dollars in bonuses to 18 company executives despite ongoing bankruptcy proceedings that led to the closures of dozens of store locations.

    “The company wants to pay a total of $8.5 million in bonuses to the executives as well as a further $16.9 million in retention bonuses to 322 other high-level employees.”

    The company’s CFO and Chief Digital Officer would get bonuses immediately, with the other bonuses paid based on performance.

    The story notes that “. Sears filed for Chapter 11 bankruptcy last October and said it would close 142 unprofitable stores as part of the restructuring process. Sears is attempting to sell about 400 of its top-performing stores. An auction of the stores is expected to take place in January.”
    KC's View:
    There is almost no more predictable story than this one … except the one that eventually will run, after Sears and Kmart have disappeared from the retail landscape, saying that the only person to come out of the experience with more money than he went in is Eddie Lampert, the hedge fund king who has slowly but surely mismanaged the company’s retail holdings.

    All these execs still have salaries, and I’ll bet they’re pretty substantial, especially when compared to the poor schmucks still working in the company’s stores. Maybe they could actually earn the money they’re already being paid, and spread a little bonus money around on the front lines, to the people who are suffering the slings and arrows of outrageous fortune.

    Geez. I really find these people to be offensive.

    Published on: November 20, 2018

    The Chicago Sun Times reports that Walgreen has opened a new store in the city’s West Loop - the rare store that it operates without a pharmacy.

    According to the story, “A sign in front of the store asks customers if they ‘Need a pharmacy?’ and directs them to the nearby Walgreens at Halsted and Monroe streets.

    “For a global network of drugstores that got its start on the South Side more than a century ago, the store represents a major shift from its other 120 stores in the city and from most of the nearly 10,000 other stores in the U.S. and Puerto Rico. Prescription drugs and other pharmaceutical services made up nearly 70 percent of sales at stores in the U.S., according to its 2017 annual report. Worldwide, the company filled more than 1 billion monthly prescriptions last year.”

    However, one expert says that this may be a harbinger:

    “Simon Pickard, a professor of pharmacy systems, outcomes and policy at the University of Illinois at Chicago, said he believes the new Walgreens might be representative of where the industry is going. With dwindling payments from public and private insurers and competition from online companies like Amazon, the chain needs to look for other ways to stay profitable. Retail pharmacies can be more expensive to maintain.”
    KC's View:
    Tough times when economics require drug stores to cut back on the drugs they sell.

    Published on: November 20, 2018

    In the UK, the Telegraph reports that “Amazon has embarked on a major hiring push for a secretive new device, in a move that will increase speculation the company plans to release a robot for the home.”

    According to the story, the company has been advertising for “experts in mechanical engineering and robotics as well as software developers to work on a ‘completely new best in class consumer product’.” The ads also describe, without any elaboration, that the new product will be “lovable” and “essential.”

    People being hired for the product - reportedly in Seattle and California - are not being told what the product is until their first day on the job, the story says.
    KC's View:
    So cool. Of course, I’m thinking Data here. Hoping it doesn’t end up being the Terminator.

    Published on: November 20, 2018

    • Lucky’s Market announced yesterday that it will begin same-day delivery of its natural and specialty food from stores in six states - Colorado, Florida, Georgia, Iowa, Missouri and Montana - using Target-owned Shipt as its delivery service provider.

    The company said that “in early 2019, the Lucky’s Market Delivers program will be available in additional locations in Lucky’s Market communities in the Midwest as wells as Lucky’s Market new store locations slated to open in Q1 of 2019.”
    KC's View:
    Gets them into delivery, but I hope it doesn’t end up with Target owning their customers…

    Published on: November 20, 2018

    • The Associated Press reports that western New York-based Tops Markets “says it has emerged from bankruptcy,” and “that it has reorganized with the support of its creditors and reduced its debt by about $445 million. A court approved the restructuring plan earlier this month … As part of its reorganization, it closed 10 stores and resolved a pension dispute with the United Food and Commercial Workers Union, which represents most of its workers.”

    USA Today reports that “the nation's largest beef processor, JBS USA, is recalling nearly 100,000 pounds of ground beef for possible E. coli contamination, according to the Department of Agriculture. The ground beef, produced Oct. 24 at JBS USA-owned Swift Beef Co. in Hyrum, Utah, may be contaminated with E. coli O157:H7, according to the USDA's Food Safety and Inspection Service (FSIS).”

    No related illnesses have been reported, the story says.
    KC's View:

    Published on: November 20, 2018

    • Alex Berkeley, assistant sales manager at Frieda’s Specialty produce - not to mention the eldest daughter of Frieda’s Specialty Produce CEO Karen Caplan, and the granddaughter of founder Dr. Frieda Rapoport Caplan - has been promoted to Sales Manager at the company.
    KC's View:
    I don’t ordinarily do these kinds of promotions here on MNB, but I’m making an exception for a couple of reasons.

    First, I love Frieda’s, and the fact that there are so many great women running the company.

    I love the idea of a third generation moving up through a family0-owned company … the third generation often is where things fall apart, and I know Alex well enough to know that this won’t happen there.

    Terrific people … terrific company … and this news just makes me happy.

    Published on: November 20, 2018

    Yesterday’s story about how gene-edited products may soon find their way onto store shelves prompted me to comment:

    Seems to me that if ‘gene editing’ is different from ‘genetic modification,’ science and business will have to work together to explain how and why … and make a compelling case for why consumers do not need to be concerned. I’m not arguing for or against the technology - just that one of the biggest mistakes science and business could make would be to underestimate the degree to which they need to educate consumers.

    One MNB reader responded:

    Kev, another mistake they might make is to underestimate the degree to which consumers get their information and data from social media which tends to range from accurate reporting to absolute misinformation and everything in between. Just look at the numbers of climate change deniers etc.

    We took note the other day of the passing of Roy Clark, prompting MNB reader Gary Harris to write:

    A sobering introspective hit of his was “Yesterday, When I Was Young.”

    Man, does it ring differently today than when I first heard it almost half a century ago. It was originally a French song recorded by Charles Aznavour, also recently deceased, with English lyrics written by Herbert Kretzmer, who also wrote the English lyrics to “Les Miserables.”

    Sobering indeed.
    KC's View:

    Published on: November 20, 2018

    Thanks to all the MNB readers who wrote in with their congratulations on MNB’s 17th birthday.

    I can’t post them all, so I’m going to choose one … from the great Jack Allen, who always has been an inspiration to me:

    17 years and growing ever wiser and interesting … I greatly appreciate being among the 30 thousand readers of yours—and Michael and Kate. What a team.

    We try. Thanks.

    And BTW … to show you how far we’ve come, below is MNB’s original masthead. Yikes!

    KC's View:

    Published on: November 20, 2018

    In Monday Night Football action, the Los Angeles Rams defeated the Kansas City Chiefs 54-51.
    KC's View: