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    Published on: January 4, 2019

    by Kevin Coupe

    CBS Sunday Morning had a story the other tracing the evolution of Sears, looking at how it reinvented itself and innovated consistently over the years … until it didn’t, and became irrelevant and virtually obsolete.

    Now, as it faces imminent and perhaps inevitable collapse, stores are closing. Stew Leonard Jr., whose eponymous company is taking over a New Jersey Sears, says that the scenario reminds him consistently of the necessity for change and innovation.

    It is worth watching … and seeing as a cautionary tale.

    KC's View:

    Published on: January 4, 2019

    MarketWatch reports that Amazon-owned Whole Foods “has launched an online catalog that lets shoppers search by dietary preference, and provides nutritional information and ingredients.” According to the story, “Whole Foods customers can filter through products based on diets like vegan, low sodium or paleo-friendly.”

    The story adds that “Whole Foods' own data shows that many customers shop according to dietary choices.”
    KC's View:
    Gee. Y’think?

    This strikes me as the very definition of low-hanging fruit … it combines Whole Foods’ food expertise with Amazon’s data expertise. And while this isn’t all that revolutionary, it does set out a marker for what retailers can and should do … providing high levels of transparency about ingredients, food styles, origin, etc…

    Published on: January 4, 2019

    A number of autonomous vehicle tests seem to be traveling parallel roads…

    TechCrunch reports that self-driving car company Cruise “is partnering with DoorDash to pilot food and grocery delivery in San Francisco … The program will be available to select DoorDash customers, who will be able to receive deliveries from restaurants via a Cruise autonomous vehicle. The partnership will also explore grocery fulfillment via Cruise vehicles for select grocers already partnered with DoorDash.”

    The test is scheduled to begin early this year.

    • In suburban New York, the Journal-News reports that PepsiCo is testing another self-driving vehicle - albeit one the size of a large cooler that actually is a robot.

    According to the story, the company is using these self-driving robots “at the University of the Pacific in Stockton, California, to deliver snacks and beverages from Hello Goodness, a curated portfolio of better-for-you brands from PepsiCo, as part of a new test phase … Students order the snacks via an app and then meet the six-wheeled robot, which moves at speeds of up to six miles per hour, at one of more than 50 locations on campus. The robots, made by Bay Area-based Robby Technologies, weigh less than 80 pounds and stand at less than three feet tall. They stop when someone stands in front of it, making for easy snack access.”

    The robots have a single-charge range of 20-miles, and have cameras and headlights so they can travel in the dark. However, they do need humans for one important function - to refill them when they’re empty.
    KC's View:
    Clearly we are going to see various iterations of this concept … both Kroger and Walmart are testing their versions … and while not all of them will work, eventually someone is going to crack the code in a meaningful way that will have, you’ll excuse the expression, legs.

    I’m fascinated by the potential.

    Published on: January 4, 2019

    The Tampa Bay Times reports that in 2019, Publix Super Markets has plans to “up its game” in several areas, and is “well aware of the changing desires of shoppers as it heavily advertises its partnership with grocery delivery service Instacart and attempts to reach more foodies with its new GreenWise Market concept.”

    According to the story, “Publix recently filed plans with the City of Tampa's zoning board to create an "Instacart staging room" and event-planning office inside the Britton Plaza store in South Tampa. It's unclear if formalized staging areas are in the works at other stores, but Publix is definitely investing and experimenting with its delivery offerings.”

    Publix’s GreenWise expansion, the story says, seems to be a response to the fact that “shoppers are … being drawn to more niche specialty stores. Lucky's Market, with grocer giant Kroger's backing, has been expanding across Florida at a higher rate than any other chain in the category.”
    KC's View:
    Interesting that Publix is going to put in an Instacart staging area. I think it makes a lot of sense to create open staging areas that give in-store customers a sense of how the process works and what is available. I’m not sure, though, that branding it as Instacart is helpful in the long term … it continues to be an unfortunate trend, retailers essentially outsourcing a critical part of the customer experience to a third party in a way that may not be sustainable long-term.

    Published on: January 4, 2019

    The Wall Street Journal reports that Mayur Gupta, vice president of growth and marketing at Spotify Technology, is joining the prepared-meal subscription startup Freshly as chief marketing officer.

    Gupta tells the Journal that one of the things that Freshly will try to do is redefine the meal kit space, saying that there’s been a realization that the business model “isn’t really that convenient.”

    But, he says, meal kits can be successful if they focus “on health, price … and data.”
    KC's View:
    The idea that meal kits work better as a component of a larger marketing approach - whether it be diet-driven or part of a larger retail value proposition - seems to me to be something that will extend and enlarge the segment, not diminish it.

    Published on: January 4, 2019

    In Maine, the Press Herald reports that Ahold Delhaize-owned Hannaford “wants to use technology to make in-store shopping an interactive experience,” and is testing innovations at one Portland, Maine, store “that are designed to promote certain product categories while making shopping easier and more convenient.”

    These innovations, the story says, “include digital displays that show ads for products, touchscreen stations where customers can search for information, and shelves with sensors that know which items a customer has picked up so relevant product information can be displayed on a nearby screen.

    “Hannaford has rolled them out in a newly redesigned area of its Portland store that focuses on health, beauty and active lifestyle products. The goal is to determine whether the changes lead to increased sales and a better customer experience.”

    It isn’t just about technology: “Shelves have been extended to a much greater height, and about 1,500 new products have been added with an emphasis on natural and organic items. Hannaford also has added an in-store nutritionist to provide product advice to customers.
    KC's View:
    Appears to be time for a road trip up to Portland, Maine … this store sounds intriguing, and exactly like how retailers should be integrating technology into the bricks-and-mortar environment.

    Published on: January 4, 2019

    In Minnesota, the Star Tribune has a story about Alakef Coffee Roasters of Duluth, a company that in five years has grown to annual revenue of $2.5 million and more than a dozen employees … with much of the credit going to its development of the City Girl Coffee brand, which describes itself as a “socially conscious coffee company dedicated to supporting and empowering women in the coffee industry around the world.”

    The story says that City Girl Coffee has been “picked up by and local Target stores. In addition, City Girl Coffee can also be found at Twin Cities-area co-ops, Kowalski’s, Hy-Vee and elsewhere,” and is “aiming for other Midwest markets while maintaining a commitment to social awareness.”

    Founder Alyza Bohbot says, “Our company is deeply rooted in the support of women coffee growers and women in general, as well as in the empowerment of equality.”

    The Star Tribune notes that Bohbot and Alakef are both inspiring and taking advantage of small business-friendly trends taking place in the Twin Cities:

    “Bohbot’s City Girl … is the biggest tenant in one of three refurbished former factories in northeast Minneapolis owned by Ellis Properties and leased by Midwest Pantry, an 8-year-old local-foods marketer and accelerator in what’s dubbed the ‘Northeast Food District,’ including a kitchen incubator.

    “Bohbot is a successful role model for Midwest Pantry, a 100-plus member organization that works with small Twin Cities food-and-gift producers to cooperatively buy equipment, market products, connect with wholesalers and otherwise help producers make a buck and help the Twin Cities thrive as a home of growing small businesses.” And Midwest Pantry itself grew out of an idea that started at a Minneapolis farmers market.
    KC's View:
    I was thrilled to see this story since City Girl Coffee is what we subscribe to and drink in our home each morning. (I’m on my sixth cup of the day as I write this….) It is a great example of a purpose-driven business that can do well and do good. It is still a very small business, but I hope it grows. A lot.

    Published on: January 4, 2019

    TechCrunch reports that “Amazon Alexa had a good year as a developer platform – at least in terms of the number of voice apps being built for Alexa, if not yet the monetization of those apps. According to new data published today by Voicebot, the number of Amazon Alexa skills in the U.S. more than doubled over 2018 … Amazon began the year with 25,784 Alexa skills in the U.S., which grew to 56,750 skills by the end of 2018, said Voicebot. That represents 120 percent growth, which is down from the 266 percent growth seen the year prior – but still shows continued developer interest in the Alexa platform.”
    KC's View:

    Published on: January 4, 2019

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

    • The South Bend Tribune< reports that SpartanNash has closed on its acquisition of Martin’s Super Markets, “adding the local business to supermarkets in eight states, distribution centers around the country and business at U.S. military commissaries around the world … the acquisition of 21 Martin’s stores will grow SpartanNash’s total count of supermarkets to 160, in addition to 19 different distribution centers nationwide.”

    • Time to stock up on “Forever” stamps, as the US Postal Service (USPS) is raising the per-stamp price for 55 cents, from 50 centers, as of January 27. Other priority shipping rates for boxes and envelopes also will rise as much as 10 percent.

    The price increases come as the USPS deals with the reality that it lost close to $4 billion last year, a loss that President Donald Trump has ascribed to sweetheart rates enjoyed by Amazon; however, experts say that it is the decline in first class mail usage that has really hurt the USPS, while e-commerce shipping continues to grow.

    Reuters reports that "Chinese coffee startup Luckin is aiming to open 2,500 new stores this year and overtake Starbucks Corp. as the largest coffee chain by number of outlets in the world’s second-biggest economy … The firm, which only officially launched its business at the start of last year, has expanded at breakneck speed, propelled by a focus on technology, delivery, and heavy discounting even at the cost of mounting losses.”

    AOL News reports that “Coca-Cola is debuting two new Smartwater products — Smartwater Antioxidant and Smartwater Alkaline — exclusively on online bulk retailer Boxed.”

    This decision by Coke comes as “Amazon, which sells a number of Smartwater products, is moving away from selling bulky, inexpensive items like bottled water that ‘Can't Realize a Profit’ — a category of products also known as ‘CRaP’ … Meanwhile, Boxed has become an expert on shipping inexpensive items like snacks and bottled water that Amazon may consider ‘CRaP’ in bulk.”

    • In Boston, a culinary landmark originally opened in 1827 is shutting down forever.

    The Boston Globe reports that Faneuil Hall landmark and tourist favorite Durgin-Park, known for Yankee pot roast and Boston baked beans, will close on Jan. 12, confirms restaurant manager Kenneth Thimothee. He cited financial reasons, such as increased minimum wage.

    I just hope the Union Oyster House is safe.
    KC's View:

    Published on: January 4, 2019

    • SpartanNash announced that Arif Dar, vice president and CIO at SC Johnson & Sons, is joining the company as its new senior vice president and chief information officer, succeeding the retiring David deS. Couch.

    • The National Grocers Association (NGA) announced that Laura Strange, Vice President, Industry Relations, Marketing, and Communications, has been promoted to the role of Senior Vice President, Communications and External Affairs.

    • The Kellogg Company has named Gail Horwood, its senior VP for integrated marketing, to the newly-created role of chief marketing officer, North America.

    • The California Grocers Association (CGA) has hired Kelly Ash, formerly Capitol Director in the California State Assembly and Deputy Political Director for the Personal Insurance Federation of California, as its new Vice President, Government Relations.
    KC's View:

    Published on: January 4, 2019

    Herb Kelleher, who co-founded Southwest Airlines and in doing so challenged traditional businesses by focusing both on low fares and high customer service levels, has passed away at age 87.

    In making the announcement, Southwest Airlines did not give a cause of death, though the New York Times notes in its obit that he was “a hard drinker with an ever-present Kool cigarette in his mouth.”

    The Times also writes: “By paying his employees well, avoiding layoffs and instilling a spirit of fun in the company’s culture, Mr. Kelleher also set a tone for Southwest that translated into customer loyalty. ‘You have to treat your employees like customers,’ he told Fortune magazine in 2001. ‘When you treat them right, then they will treat your outside customers right. That has been a powerful competitive weapon for us’.”

    And, he once wrote: “We market ourselves on the personality and spirit of ourselves. That sounds like an easy claim but, in fact, it is a supremely dangerous position to stake out because if you’re wrong, customers will let you know — with a vengeance. Customers are like a force of nature: You can’t fool them, and you ignore them at your peril.”
    KC's View:

    Published on: January 4, 2019

    There was some speculation this week that Amazon should invest in a gas station chain, prompting one MNB reader to write:

    I see this as a back to the future moment. Rather than having someone bring the contents of your Amazon locker out to your car, they have someone come out, fill up your car, check the oil & top off the wiper fluid while you are inside. Where have I seen that before? I think it might have been the 60’s.

    MNB reader Tim McGuire wrote:

    I’m not sure why Amazon - or anyone else - would want to invest in gas stations when that sector has already started its inevitable slide to irrelevance as the automotive fleet switches from gasoline and diesel to electric? I recognize that it is still early days for electric vehicles in North America (and I am an early adopter coming up on 4 years and 60,000 miles in my Tesla) but the trend is clear - the number of gas vehicles, and the number of stops for gas, will decline steadily over the next decade and beyond. Once the U.S. has an administration that actually reads the climate science reports before declaring “I don’t believe it” and working to roll back fuel mileage standards, things will move even faster. Many other countries have already declared the date (ranging from 2025 to 2040) when no gas vehicle sales will be allowed. So unless a company has an investment time horizon of ten years or less - and Amazon hardly fits that bill - it better have a model for use of gas stations that doesn’t rely on either the revenue from gas sales or the visit frequency from drivers filling up. Add to that the ongoing decline in tobacco usage - the most important profit centre for the convenience store/gas station channel - and the cost of remediating the land when a gas station closes down, and I’d rather invest in a combined rotary-dial phone and buggy whip factory.

    Regarding another Amazon story, one MNB reader wrote:

    Just so I understand what you have said. You think it is a good idea for Amazon to place stores in unused malls across America? Kind of like, have a physical footprint in more locations, like say brick and mortar. More rent, more labor, more inventory. All things that drive cost up. I say go for it, they will be leveling the playing field themselves. Maybe I didn't read it correct though.

    Actually, I said that Amazon should only do it if it can get the mall space for free … and the design of the 4 Star stores is not exactly heavy on labor. It could be a learning experience, and we know that Amazon is exploring the bricks-and-mortar environment.

    On another subject, MNB reader Dennis Meek wrote:

    In response to the article concerning the rising acceptance of socialism, I do agree it is something retailers will need to keep an eye on.

    Not for signals to change their business strategy, but for survival in general. Our earliest settlers tried socialism after landing at Plymouth Rock and it nearly killed them. Only when the colony's governor granted each family a parcel of land and allowed them to keep the fruits of their labor under free market conditions did they thrive. 

    Socialism has been tried time and time again with each new attempt claiming, “If we just tweak it, it will work.” For example, Venezuela was once one of the most prosperous countries in the world. Rich with natural resources and creative citizens. No, it was not perfect, but it was a far cry from what Venezuela is today. Today, after Venezuela’s tweaking and implementation of socialism, it can only be described as hell on earth. 

    It’s no surprise that the academics are accepting socialism. The modern academy is one of the few initiations on earth were one can teach a subject with no redeemable value and one that violates common sense at all levels, yet be the highest paid member of the institution. But have they considered the number of academics that were executed by Mao Zedong, Joseph Stalin and Adolf Hitler under socialism. 

    My point is this, it doesn’t matter how you tweak it, nor what flavor of socialism you use, global (Mao & Stalin) or national (Hitler). The end is always the same, little to no freedom and a large population of “have not’s” subservient to a small group of “have’s.” 

    Consider this, in a capitalist society someone from a poor blue collar family, one with no ties to any power, can work hard, save money, and put themselves through college for a better life. That person could also skip college altogether and start a business that lifts them from poverty. 

    My story was the first case. I was able to attend college and earn a technology degree that changed the course of my life. I did that as the first member of my family, either core or extended, to attend college and paid back every dime of the loans I took out. If I would have lived in a socialist system, that would never have been possible. In fact, even in a country that flirts with socialism, such as the United Kingdom, it may not be possible to work yourself out of poverty. 

    Ultimately, time will tell. I just hope we don’t become a place where the people eat the zoo animals to survive like the people of Venezuela. Because, if the United States is no longer a land where a poor immigrant can go and better themselves, where else will they go, Venezuela?

    From MNB reader Gary Loehr:

    Socialism is the best idea that has never worked anywhere it has been tried.  Sounds good in theory, but falls apart in practice.
    KC's View:

    Published on: January 4, 2019

    Vice is, in its own way, as innovative and entertaining a look at Dick Cheney from director/writer Adam McKay as his The Big Short was as a look at the faulty underpinnings of the nation’s financial system. I think that maybe The Big Short was a little better because it was less politically charged - reactions to Vice almost certainly will be informed by how you feel about Cheney and his role in the American continuum.

    I do think that, no matter how you feel about the characters, it is hard to argue with the extraordinary quality of the performances, especially Christian Bale as Dick Cheney, Amy Adams as Lynne Cheney, and Steve Carrell as Donald Rumsfeld. Sam Rockwell is maybe just a bit too much of a caricature of George W. Bush for my taste, but that’s a small quibble.

    Vice is fascinating moviemaking - provocative, strong-minded, and opinionated … if Dinesh D’Souza can make Death of a Nation, Adam McKay certainly can make Vice. We’ll see which one stands the test of time.

    I must admit that from the first time I saw a trailer for Mary Poppins Returns, I was utterly charmed and couldn’t wait for the film to come out. Having seen it, however, I must confess that the movie itself suffers from a definite lack of charm.

    Not completely, of course. Emily Blunt is terrific in the title role, not completely wiping out the memory of Julie Andrews’ performance, of course, but giving the part a nice little edge that works for the movie. Lin-Manuel Miranda, as the lamplighter Jack, is terrific, as are Ben Whishaw and Emily Mortimer … and Dick Van Dyke, cameoing as the father of one of the characters he played in the original, is, nor surprisingly, a scene stealer.

    But … I couldn’t shake the feeling that the whole thing was derivative, as opposed to being a clever and innovative take on the original material … a little bit like painting by the numbers. And yet, at the same time, the film cried out for references to the original film. How, for example, could the word “supercalifragilisticexpialidocious” never be uttered?

    This may seem contradictory, but it is, quite simply, how I felt.

    One other thing. It did not escape my notice that two of the trailers preceding the film were for remakes of Dumbo and The Lion King … which leads me to believe that Disney is falling back on the old stuff and maybe not investing enough in new and innovative projects. Sure, these things probably make a lot of money … but with all that money, not to mention all the money that comes in from the Marvel and Star Wars movies, you’d think they could spend a little money on some smaller and more challenging stuff.

    It is just two weeks until “Star Trek: Discovery” returns for its second season on CBS All Access, and I can’t wait … and my compliments to the network for featuring a series of “Short Treks” that have been short films that have riffed on the franchise’s characters, themes and ethos. The latest, just out yesterday, is “The Escape Artist,” with Rainn Wilson returning (and directing) as Harry Mudd, a villain from the original series who popped up on “Discovery.” Fun stuff, and a great appetizer as we await the main course.

    One of the things that Mrs. Content Guy and I did over the holiday was go to a concert featuring the vocal stylings of Katherine Hedlund, a jazz and blues performer of exceptional style. She hasn’t recorded anything yet, but if you have the opportunity to see and hear her, do so - she’s great.

    A wine to recommend to you this weekend … the 2016 Siduri Pinot Noir, from Oregon’s Willamette Valley, which is supple and smooth and versatile.

    Today is my mom’s birthday. She died in 1998 and age 67, the victim of lung cancer that metastasized pretty much everywhere, but that she fought valiantly for four years. My mom was a tough broad - barely five feet tall, but tough.

    When I was a teenager and finally was able to look down on her, I commented once on how tall I was. She shot me a look and responded, “You maybe be taller, but you’ll never be bigger than I am. Don’t forget it.”

    She was right. She’s been gone more than two decades, and I may miss her now more than ever.

    I just wanted to mention that.

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

    KC's View: