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    Published on: March 15, 2019

    by Kevin Coupe

    Interesting piece in the New York Times this morning about how, “in our made-to-order consumer society, simple is out. And in a volatile sales universe for new cars, brands like Porsche, Ford, Mini and Volkswagen are experimenting with marketing methods to make their models more attractive to buyers — and better for their bottom lines.

    “In a recent survey of a thousand adults commissioned by Mini, nearly two out of three people said they considered personalization important in deciding on a new vehicle.”

    The story goes on: “With electric and autonomous vehicles on the horizon, nearly all brands worry that the car will emerge as a commodity, an appliance. So the concept is to allow customers — custom is the first part of that word — to build an automobile to their exact specifications, making it almost as easy as (and in some cases easier than) ordering an Ethan Allen couch or a pair of Nike by You sneakers.”

    One car salesman puts it this way: “The motor won’t sell it — it’ll be the experience and the ability to customize. People who are about 35 to 55 years old have their own ideas of what a car should look like. The company that makes their dream car a reality is the company that’s going to get their money.”

    I think this goes beyond cars. Retailers of all kinds have to think in different ways about providing customizable and differentiated experiences to shoppers … and especially best customers who account for a large percentage of their sales and profits. These days, it seems to me, there is no excuse for not knowing who these people are, what they want, and working hard to satisfy those needs and desires so they won’t shop anyplace else.

    Retailers need to act as if every one of their customers is in play.

    Because every one of their customers is in play.

    It also was interesting to see this story because I’ve been sort of vaguely thinking about my next car … it isn’t going to happen anytime soon, but I’ve been thinking about the possibilities.

    There are certain things I know. It’ll be a ragtop. And it’ll have a manual transmission. Might be another Mustang (I love the dark gray one I own now). I suppose it could be another Miata (for the 20 years before I owned the Mustang I had two different Miatas, and I loved those cars). Also could be something else.

    But one thing I have been thinking about is that I would like my next car to be in British Racing Green … and, having done a little checking, I’ve found that neither the Mustang nor the Miata is made in that color. It’s not available.

    Now, I haven’t done a lot of exhaustive research, so it is entirely possible that I’ll find another convertible with a manual transmission that comes in that color. But in checking out Mustangs and Miatas, I found myself wondering why there aren’t a greater number of customizing options, especially paint colors, available in 2019.

    To be sure, Mini does seem to be an exception, offering a wide range of customizable versions and encouraging people to design their own as part of its value proposition. I know this in part because my driveway looks like two thirds of The Italian Job, with both my daughter and wife driving Minis.

    It does seem like a natural next step for car companies, which need to recognize that customers want what they want, when they want it, and how they want it.

    For me, that’s a ragtop. Manual transmission. British Racing Green.

    That’ll be an Eye-Opener.
    KC's View:

    Published on: March 15, 2019

    Kroger and robotics company Nuro said yesterday that they will expand their autonomous vehicle delivery test to two stores in Houston, Texas, after having started a test last August in Scottsdale, Arizona.

    “Together through the pilot,” the companies said, “Kroger and Nuro have successfully and safely completed thousands of deliveries to customers in Scottsdale. With the upcoming launch, Kroger and Nuro will transfer the autonomous grocery delivery program to Houston for the next phase of the pilot.”

    They said that as in Scottsdale, “Kroger and Nuro will begin the service with Nuro's self-driving Toyota Prius fleet and will introduce the next generation of the custom driverless vehicle later this year.”

    “Our Arizona pilot program confirmed the flexibility and benefits provided by autonomous vehicles and how much customers are open to more innovative solutions,” Yael Cosset, Kroger’s chief digital officer, said in a prepared statement. “It’s always been our shared vision to scale this initiative to new markets, using world-changing technology to enable a new type of delivery service for our customers.”
    KC's View:
    We’re going to see a lot of this in markets where such experimentation makes sense and where the infrastructure makes it practical. It is incumbent on companies like Kroger to be hip-deep in such experiments, seeing what works and what doesn’t and demonstrating a willingness to try new things.

    Published on: March 15, 2019

    The Washington Post this morning writes about how “record organic sales in the United States totaled nearly $50 billion in 2017,” “meteoric” growth though it still represents less than six percent of total food sales.

    The story says, “This has resulted in organic growers and food companies that, although technically adhering to the definition of organic — no chemically formulated fertilizers, growth stimulants, antibiotics or pesticides — are a far cry from the idealism and high standards with which the movement began.

    “Now the Cornucopia Institute, a farm policy research group best known as an organic industry watchdog, is trying to promote higher standards among the accredited certifying agents hired by organic farmers, processors and handlers to ensure that their practices comply with regulations established when Congress passed the Organic Foods Production Act of 1990. Organic farmers’ original intent was to create a level playing field in the market and to provide consumers assurance about a minimum uniform standard for organic production.”

    The problem is that even “certified organic” may not mean everything consumers may think it does.

    According to the story, “the Cornucopia Institute ranked all 45 domestic certifiers on their adherence to the spirit and letter of the organic law. The institute found significant variation in how certifiers interpret regulations, variation that frequently benefits huge corporate farms and competitively disadvantages those comporting themselves ethically.

    “Certifiers are paid by the farms and food businesses they certify, which can make for cozy and in many cases unscrupulous relationships. But more important, the scorecard found, the kinds of businesses being greenlighted are at odds with consumers’ understanding of organics.”
    KC's View:
    I’m a big believer in standards and in having certification processes that engender trust as opposed to erode it. There’s nothing worse than when companies cut corners and take advantage of consumers’ willingness to believe.

    Published on: March 15, 2019

    Bloomberg reports that gourmet hamburger chain Shake Shack, “getting creative in its effort to attract and retain scarce workers,” is testing as four-day work week.

    ““If we can figure that out on scale, it could be a big opportunity,” says CEO Randy Garutti. “We’re not promising it yet, but it’s something we’re having fun trying, and seeing how our leaders like it on a recruiting basis and ongoing retention basis.”
    KC's View:
    Sure. Why not? Me, I’m hoping my boss lets me cut back to a six-day work week …

    Published on: March 15, 2019

    The Wall Street Journal has a story about when Walmart decided to start offering grocery delivery via Door Dash from a store in North Bergen, New Jersey, it got caught by surprise when orders came “orders flooding in from across the Hudson River,” in Manhattan.

    Part of the problem was that the $11 delivery fee didn’t even cover the $15 toll charged to go across the George Washington Bridge.

    “‘We never would have gone in with the intention that this would work with $11,’ said a spokeswoman for Walmart, which hadn’t intended to include Manhattan within the delivery radius. ‘We offered additional incentive to drivers to finish the orders that came in,’ then stopped offering deliveries to Manhattan after a few days, she said.”

    The Journal notes that “the mistake shows the hurdles Walmart and other large grocers face as they race to expand fresh-food delivery and gain an edge in one of the fastest-growing e-commerce segments. Despite Walmart’s resources and more than 1.5 million U.S. workers, it mainly relies on a patchwork of independent companies to expand its delivery services as quickly, broadly and cheaply as possible. For drivers at those delivery firms, the economics of shuttling Walmart’s and other grocers’ orders don’t always make sense.”

    And yet, Walmart firmly believes that “maintaining a grip on grocery purchases as spending shifts online is vital to heading off Amazon, especially since it is a rare area where Walmart has a head start.”

    The story notes that “Walmart is offering delivery from 800 stores, with another 800 planned this year, mostly by joining with firms like DoorDash that crowdsource drivers.”
    KC's View:
    One thing about this story struck me as funny - that the GWB has a $15 toll. I go over it all the time, but hadn’t really paid attention … like so many people, I have EZ Pass, and so the increases have been relatively painless and unnoticed.

    As for Walmart … it just seems to me that at some point it is going to have to bite the bullet and create a delivery system for which it has control and responsibility. The costs in the short term may be higher, but the long-term branding advantages may make it worthwhile.

    Published on: March 15, 2019

    The New York Times has a story about how tobacco companies, which decades ago owned brands that included Tang, Capri Sun and Kool-Aid and “barred from targeting children for cigarette sales, focused their marketing prowess on young people to sell sugary beverages in ways that had not been done before … Using child-tested flavors, cartoon characters, branded toys and millions of dollars in advertising, the companies cultivated loyalty to sugar-laden products that health experts said had greatly contributed to the nation’s obesity crisis.”

    The revelations come from researchers who were “combing through a vast archive of cigarette company documents at the University of California, San Francisco” that was “created as part of a settlement between major cigarette companies and states that were seeking to recoup smoking-related health care costs.”

    You can read the entire story here.
    KC's View:
    In some ways, this is not surprising … but worth keeping in mind as tobacco executives look to exert more control over the vaping business.

    For me, it is very simple. I don’t trust these companies or these people. Not ever.

    This is history, but one has to respect and learn from historical precedent. Their businesses were built on lies and deception and addicting people to stuff that wasn’t good for them and that could kill them. They get no quarter from me.

    Published on: March 15, 2019

    Reuters reports that “Casino’s upmarket Monoprix supermarket chain is working to expand its partnership with e-commerce giant Amazon in France, following a successful launch in Paris.” Monoprix “started filling orders for subscribers to Amazon’s Prime loyalty programme in parts of Paris on Sept. 12 through a two-hour delivery partnership.”

    Monoprix is described as being similar to Amazon-owned Whole Foods.
    KC's View:
    It is a little ironic, since Monoprix did a pretty good job of taking a gentle jab at Amazon Go back in 2017.

    Published on: March 15, 2019

    • The NPD Group is out with a new study saying that “the meal kit market is quickly evolving from nearly exclusively online and subscription-based, home delivery services to on-demand availability in-store and online. Consumers are trying out the different ways to purchase meal kits, with over a quarter of recent users purchasing kits both in-store, including restaurants, and online.”

    The study concludes that “there is a large group of consumers, 93 million, who have never tried a meal kit but are interested in giving them a try, which points to a market opportunity.”

    • The Associated Press reports that Sen. Angus King (I-Maine), Sen. Tammy Baldwin (D-Wisconsin) and Sen. Jim Risch (R-Idaho) are co-sponsoring a bill that would stop non-dairy products from using words like “milk” and “cheese” on their labels.

    The proposal is called the “Defending Against Imitations and Replacements in Yogurt, Milk, and Cheese to Promote Regular Intake of Dairy Everyday,” or “DAIRY PRIDE,” Act, and takes specific aim at products like almond milk and oat milk and seeks to protect dairy farmers from what the lawmakers say is unfair competition.
    KC's View:

    Published on: March 15, 2019

    • With the resignation of Scott Gottlieb, commissioner of the Food and Drug Administration (FDA) scheduled to take effect next month, the Trump administration has named Ned Sharpless, director of the National Cancer Institute, to serve as Acting FDA Commissioner.

    Health and Human Services Secretary Alex Azar, in making the announcement said that the appointment means that “there will be no let-up in the agency’s focus, from ongoing efforts on drug approvals and combating the opioid crisis to modernizing food safety and addressing the rapid rise in youth use of e-cigarettes.”
    KC's View:

    Published on: March 15, 2019

    Yesterday we took note of an Associated Press report that “Amazon has removed books from its website that promoted ‘cures’ for autism, the latest major company to try to limit the amount of misinformation related to autism and the bogus notion that it's caused by vaccines.”

    I commented:

    I cannot imagine any circumstances under which I wouldn’t vaccinate my kids. But I have to admit that I’m not entirely comfortable with the idea that Amazon isn’t making these books available, even if they are preaching nonsense.

    I checked, and Amazon has books espousing flat earth theories. Which is sort of the same thing.

    MNB reader Lisa Malmarowski responded:

    At first I thought the same thing. But then changed my mind because Amazon isn’t the government. This isn’t censorship. Retailers all the time pick a product selection they want to feature. Amazon, despite having the economy of a nation, doesn’t mean it is one. Even if they like to think they are. Other retailers can sell these books.

    Another MNB reader agreed:

    My initial reaction is that flat earth theories don’t kill people, not vaccinating your children could. So I have no problem with not making books touting these asinine theories available.

    And from another:

    I strongly disagree with your statement that flat Earth theories and the vaccination debate are the same thing. One brings back deadly disease and puts not only the unvaccinated children in danger, but also the elderly and very young who can’t get the vaccination; the other just makes some people look uneducated and overall no one really gets hurt.

    Kudos to Amazon for trying to do what they can to help stop the spread of harmful misinformation.

    Responding to yesterday’s FaceTime report from SXSW, one MNB reader wrote:

    You should define SXSW! Who ever even heard of it?

    I’m a little surprised that you haven’t heard of it, but you are right - on first reference, I should’ve said the South By Southwest technology and media conference and festival.

    I’ll do better next time.

    As for my FaceTime video, one MNB reader asked:

    Are you that smart, or do you have someone holding up cue cards like they do on SNL? I’m betting a lot of your subscribers have the same question.

    I’m not that smart, but there is nobody holding up cue cards. I generally just prop up my laptop or iPhone and just deliver my commentaries off the cuff. Sometimes I write them in advance so I have a better ideas of what I’m going to say, but not usually.
    KC's View:

    Published on: March 15, 2019

    There are so many good things to say about “Homecoming,” a 10-part series available for screening on Amazon Prime.

    Unfortunately, I can’t tell you very much, because to do so would be to ruin it for you. I definitely don’t want to do that.

    Suffice it to say that it stars Julia Roberts (who is outstanding), is directed by Sam Esmail (“Mr. Robot”), and that every episode is a half-hour, and yet so chock-full of plot that they add up to a suspenseful, propulsive whole. (More series should consist of 30-minute episodes, I think.) It strikes me as painstakingly done, with hardly a wasted shot or word, focusing on an installation designed to treat soldiers just home from the war.

    “Homecoming” is creepy and suspenseful and totally paranoid, and it is not for nothing that the soundtrack consists of musical cues that harken back to 70s thrillers such as “Three Days of the Condor” and “The Parallax View.”

    I think that once you begin watching, you’ll want to binge it … because you’ll simply want to know what is going on.

    I do have one recommendation. When you get to episode 10, stick around for the post-credits sequence. It is a killer, and sets up the second season.

    “Homecoming” is terrific. Watch it, and thank me later.

    Among the pleasures of spending a few days at SXSW in Austin, Texas, was the opportunity to enjoy the food and drink.

    I haven’t been drinking much beer lately, but I do have a new favorite … Yellow Rose Smash IPA, which is delicious with a nice malty finish. (And, after all, as the British poet AE Houseman once wrote, “Malt does more than Milton can to justify God’s ways to man.”)

    Also went to Lambert’s in downtown Austin - which was commandeered for the duration by Brand Innovators , a really impressive networking organization - and had an amazing chopped beef sandwich, served with white onion, jalapeño and pickle relish.

    There were chicken fajita tacos at Chuy’s. A quick cheeseburger with grilled onions at Huts. And a margarita at the rooftop bar Bob’s Steak & Chop House.

    All in all, a satisfying weekend. In so many ways.

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

    KC's View: