business news in context, analysis with attitude

Published on: April 8, 2019

Hooray for Hollywood! This podcast comes to you from the Retail Tomorrow Immersion conference in Los Angeles, which may have more storytellers per capita than any other place on earth. With visits to Google’s new campus in Playa Vista, in the converted hangar where Howard Hughes’ Spruce Goose once resided, and to some of the most interesting and experiential retail spaces in the city, this conference also featured several sessions that, now as podcasts, bring this fascinating content to you.

First up - a discussion of disruptive storytelling - told through stores, pop-ups and, coming soon, AI and VR - that is changing the way marketers connect with and influence existing and potential customers.

Our guests:

• Cody Rapp, CEO of Calmist, a fascinating and growth-focused retail concept recently featured on MorningNewsBeat.

• Lori Schwartz, founder of Tech Cat, which helps marketers shape their narratives in a fast-evolving environment.

• Amanda Solosky, co-founder/CEO at Rival Theory, which is developing game-changing AI capabilities that definitely will impact the relationship marketers have with shoppers.

• And Mariya Zorotovich, director of Responsive Retail Strategy and Incubation, at Intel Corporation, which helps to make all this possible.

The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

Pictured, from left to right:

Kevin Coupe, Mariya Zorotovich, Amanda Solosky, Cody Rapp, Lori Schwartz.

Published on: April 8, 2019

 Digiday has a couple of stories of about different retailers seeking a competitive edge in an uncertain bricks-and-mortar business climate…

First, it writes about Staples, which “no longer wants to be thought of as a place to buy office supplies. In a brand revamp, Staples this week repositioned itself as ‘the Worklife Fulfillment Company,’ or a place where it says workers can feel happy and productive, reminiscent of WeWork.”

The company says that “the focus on Worklife means providing services, products and solutions and an improved digital experience that allows our customers to work wherever, whenever and however they want.” It may or may not mean actually competing with WeWork by opening its own co-working spaces, but here’s how Digiday described the pivot, and evaluated the strategy:

“The pivot to services, including shared-office space, along with agency-style marketing, advertising and other business services, is a way retailers can monetize unused space, generate additional revenue from co-working customers, and build an ongoing relationship beyond one-off interactions or purchases. The co-working market, however, is highly competitive. Beyond industry heavyweights like WeWork and Regis, there are an estimated 200 co-working companies across the U.S. that have at least one location that’s 5,000 square feet, according to real estate company Cushman & Wakefield. Retailers, particularly office-supplies companies, are betting on services and co-working as a means to lock in regular revenue from clients already in their ecosystems.”

Digiday also has a story about retailers “drawing inspiration from Apple’s store model. Apple has built a retail template other stores can borrow from: neat minimal stores with personalized service and experiences, including events and classes. It’s become the default setting for store design makeovers.”

Examples:

“The list of retailers adding elements of Apple’s model keeps expanding and now includes brands like Samsung, AT&T and Verizon, as well as big-box retailers like Kohl’s and Walmart, which rolled out Apple-style associate-assisted checkout around last year’s holiday season. Digital-first beauty brand Glossier, which has stores in New York, Los Angeles and Miami, models its stores as experiential product showrooms, with products neatly laid out in uncluttered open spaces designed for discovery, with careful consideration to lighting and presentation.”

Apple’s store model is seen as “a way to breathe life back into physical stores. A clean, carefully presented selection of products, a help center that resembles a hotel concierge, a space for events and classes, and a cashierless checkout system are some elements retailers are trying to copy. The common denominator is that they’re all aiming to nail an approach to retail that’s predicated on a glitch-free, easy customer experience.”

Published on: April 8, 2019

Axios reports on how the Millennial generation is facing both the opportunities and challenges of the new age of automation.

The story notes that “millennials — who disrupted our culture, stores and workplaces — now face their own coming upheaval.

“The millennial generation has the opportunity afforded by more tech than anyone prior.

“But prior technological revolutions have led to decades-long interregnums before real wages returned to prior levels. And those thrown out of work often had trouble finding new jobs.

“The new automation is tech on steroids. As time goes on, it will strike hard at blue-collar millennials — in cities and more rural parts of the country alike.”

The story points out that the very jobs that middle class and blue collar Americans used to count on are the ones being automated, and that millennials that have enjoyed the benefits of a digital revolution now will be facing realities increasingly difficult to navigate. “Part of that is economics - tech and globalization have hollowed out middle-skill, middle-wage jobs … And part of it is the continued aftermath of the financial crash.”

Published on: April 8, 2019

The New York Times reports on how European Union lawmakers are considering new legislation that would prevent plant-based products being described using words that imply they that they are made from meat. “If a product does not contain meat,” the logic goes, “it cannot be called a burger or a sausage or a steak.”

There is a lot of dissent on the issue: “Environmentalists said the suggested labeling rules were an effort to undermine the growing demand for plant-based foods.”

At the same time, in the US, “there has been a push by the dairy industry to require the Food and Drug Administration to enforce labeling rules for milk as more Americans switch to ‘alternative milks,’ which come from any number of plants. (Pea milk, anyone?)”

Published on: April 8, 2019

Good piece in the Wall Street Journal about how “the auto industry and Silicon Valley are locked in a battle for control of one of the last unconquered screens: your car dashboard display. At stake are billions of dollars in revenue from ads and services as well as the balance of power between two big industries. And then there is the future of the dash itself, a source of endless complaints from drivers frustrated by its glitchy concoction of buttons and technologies.”

Some automobile manufacturers don’t want to cede the space and functionality to tech companies such as Google, Apple and Amazon, largely because they see those screens as being critical to their ongoing relationship with drivers. But others acknowledge that tech companies may be better positioned to move the ball forward to create more interactive and relevant functions.

An excerpt:

“On future screens, local restaurants, doctors’ offices and other services could target ads based on typical driving routes. An insurance company could offer lower rates for cautious drivers, while car makers could use system data to offer service on an aging part before it blows. Some envision a world where users could start watching a TV show at home, then with a voice command continue watching the same program in the car. Others are working on allowing users to order and pay for gasoline and coffee on their screens.

“These data-driven products could create as much as $750 billion in new revenue by 2030, including from location-based advertisements and predictive car maintenance, McKinsey & Co. has estimated.”

You can read the entire story here.

Published on: April 8, 2019

Bloomberg has a story about former Uber CEO Travis Kalanick, who the story notes was ousted from that company “after a series of scandals,” and how he now is heavily invested in a new business that actually will end up competing with Uber.

The story describes how after leaving Uber, “Kalanick purchased a controlling stake in City Storage Systems for $150 million. The company buys buildings or plots of land, making a bet that the gig economy will forever alter the value of real estate in major cities. Kalanick particularly embraced one business idea, for so-called smart kitchens. It would allow people to open pseudo-restaurants when they couldn’t otherwise afford a location of their own or where doing so would be impractical.” These facilities rent out “fully equipped, commercial-grade kitchens to serve businesses selling food on delivery apps like Uber Eats.”

Some of these so-called “cloud kitchens” serve business that are all-digital, having no bricks-and-mortar footprint; it also seems to be expected that more and more, they could serve existing restaurants that are not designed for, or simply cannot handle, a robust take-out business.

Uber, while not as aggressive as Kalanick’s CloudKitchens business, has been making steps in this direction as well: “Last year, Uber’s food delivery team began quietly leasing real estate in Paris, according to a person familiar with the project. It has been stocking the space with ovens, refrigerators, sinks, stoves and other appliances, and renting them out to restauranteurs planning eateries that cater exclusively to delivery customers.”

The problem is that Kalanick remains on Uber’s board, though he’s also been hiring away some Uber employees for his CloudKitchens enterprise; Uber has warned him against continuing this practice, and there are reports that as Uber goes through an IPO, it is possible that Kalanick could lose his board seat in a reorganization.

While Uber Eats could end up being the delivery mechanism for CloudKitchens, it also seems probable that they could end up competing against each other.

“The early success of CloudKitchens,” the story says, “has demonstrated the promise of the model. That leaves Uber with a dilemma: Should it invest in its own virtual restaurants on a worldwide scale or partner with a company like CloudKitchens and avoid another conflict with its co-founder? There’s a good argument to partner. Uber could avoid the risks associated with buying or leasing real estate and focus on using its drivers to deliver meals.”

Published on: April 8, 2019

The Wall Street Journal reports that Amazon “is positioning Alexa, its artificial-intelligence assistant, to track consumers’ prescriptions and relay personal health information, in a bid to insert the technology into everyday health care.”

According to the story, Amazon says that Alexa “can now transfer sensitive, personal health information using software that meets health-privacy requirements under federal law. Five companies, including insurer Cigna Corp. , diabetes-management company Livongo Health Inc. and major hospital systems, said they developed new Alexa features for consumers using the federal protocol. The features let Alexa perform tasks such as scheduling urgent-care appointments, tracking when drugs are shipped, checking health-insurance benefits or reading blood-sugar results.”

Published on: April 8, 2019

• Bloomberg has a story about Sensei, described as “a 16-month-old technology company based in Lisbon that’s backed by Germany’s Metro AG and Portugal’s Sonae SGPS SA,” that is looking to compete with Amazon’s checkout-free technology.

The story reports that “Sensei says three major European grocers, including a U.K. supermarket operator, have tapped its technology for stores they plan to open this year -- potentially getting in ahead of Amazon. The U.S. behemoth has reportedly scouted space for its Amazon Go stores in London, but has not announced any openings.”

The story notes that “Sensei’s technology may be cheaper to deploy” than the Amazon Go tech. “It’s easier to retrofit existing stores with AI-driven, camera-only approaches than with multisensor systems, said George Lawrie, a principal analyst with research firm Forrester.”

Published on: April 8, 2019

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

• Ahold Delhaize-owned Giant Food, based in Carlisle, Pennsylvania, said on Friday that it has opened “six brand new stores in four states, growing its total store count to 178.

“Five of the stores, which are former Shop ‘n Save locations Giant acquired earlier this year, are branded Martin’s Food Markets and are in the communities of Smithsburg, Md., Greencastle, Pa., Berryville, Va., Hedgesville, W. Va., and Martinsburg, W. Va. In addition, Giant constructed a brand-new store in Warrington, Pa. to replace a store previously located in Jamison, Pa.”

““These multiple store openings align with our aggressive long-term growth strategy - entering new markets where it makes sense and expanding our offerings for our current customers,” said Nicholas Bertram, president, Giant Food Stores. “Along with the recent introduction of our Giant Heirloom Market in Philadelphia and our Giant Direct e-commerce hub in Lancaster, our team has demonstrated a relentless focus on innovation that allows customers to connect with our brand whenever and however they want.”


• USA Today reports that toilet paper brand Charmin is out with a “Forever Roll” that it says is designed to last a month.

Michael Che reported on this on “Saturday Night Live” over the weekend, and followed it up with this priceless comment: “‘We’ll see about that,’ responded Chipotle.” Wish I’d said that.

Published on: April 8, 2019

Last week, MNB reported:

“Patagonia, the outdoor gear and clothing purveyor that has taken an increasingly high profile public policy profile in recent years especially when it comes to environmental issues, has decided that there are certain people to whom it does not want to sell clothing.

“The specific clothing in question are its fleece and puffer vests and jackets that have become a wardrobe staple for many Wall Street and Silicon Valley executives; Patagonia’s corporate sales division apparently has made a pretty good living by selling these items with corporate logos on them.

“In the past, Patagonia sold them to anyone who wanted them. But no more.

“Bloomberg reports that Patagonia has shifted its focus to ‘mission-driven companies that prioritize the planet,’” and now wants to ‘add more companies that have the B Corp designation to its client list -- businesses that meet certain environmental, social and transparency standards and are certified by a private organization. Patagonia itself is a B Corp and some financial and technology firms also have that status’.”

And I commented:

I’m sure that Patagonia will get some grief for this Eye-Opening approach to business … but not from me. I’m perfectly happy to do business with a company that makes quality products and has rejiggered its corporate motto to say, ‘We’re in business to save our home planet’.

As the great John Mellencamp sings, “You gotta stand for something, or you’ll fall for anything.”

To which one MNB reader responded:

Just so I understand...

A baker does not want to sell a wedding cake to a gay couple, and we want laws to force  him/her to do so.  Because we don’t want to allow discrimination.  Got it.

Patagonia does not want its fleece to be worn by Wall Street types.  Or, rather, they want their fleece only worn by those that agree with them the planet needs saving.  Get a B rating in some system someone designed.  OK.

But wait, wouldn’t the same law say Patagonia does not get a say in the matter?   They have to sell to everyone who comes knocking on the door, just like the baker does.  

Rules are rules, no?

Help me understand how the baker who chooses to NOT do business with gays / latinos / blacks / catholics / jews / whatever differs from Patagonia?   Either we allow sellers to choose buyers; or we don’t.  But we don’t get to cherry pick.

I think this observation is absolutely right, and that I was guilty of being hypocritical when I wrote my commentary.

In the past, I was critical of the baker who refused to make the wedding cake for a gay couple because I thought that he ought not be allowed to discriminate in that way, but I also was critical because I fundamentally disagree with the baker’s position.

But I supported Patagonia’s decision only to business with people and companies with which it agrees because I fundamentally agree with its pro-environment and anti-Wall Street point of view … even though, if I were consistent, I would’ve argued that this is, in fact, discrimination.

I was being inconsistent. And hypocritical. And just plain wrong.

If some person - let’s say, a Wall Street type who spent hundreds of thousands of dollars to bribe his kid’s way into an Ivy League school - is photographed wearing a Patagonia vest, nobody thinks that Patagonia is endorsing his value system. Rather, if they think about it at all, they think, “Gee, that guy may be an entitled slime-ball, but he has pretty good taste in vests.”

Of course, there are some exceptions to the rule that Patagonia ought to sell to any organization. If the KKK, for example, wanted white hooded vests with the initials of the organization on them, I think we could all agree that Patagonia would be well devised to turn down that order. But I think we all have to concede that the KKK is different from, say, Goldman Sachs.

I think this criticism of my commentary seems entirely justified. And I’m glad it was brought to my attention.

Published on: April 8, 2019

In the 2019 NCAA Men’s Basketball Tournament this weekend, Virginia stunned Auburn 63-62, while Texas Tech defeated Michigan State 61-51.

This means that Virginia will meet Texas Tech tonight in the NCAA Men’s basketball Final.


And, in the NCAA Women’s Basketball Final this weekend, Baylor defeated Notre Dame 82-81 to bring home the title.