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    Published on: May 7, 2019

    by Michael Sansolo

    While there are a wide range of motivations for the stories that we choose to feature here on MNB, the most important and consistent one is that we believe there are countless interesting insights and lessons to be gained by looking far beyond retail. At times we reach far and hard for those lessons, while at other times they are readily apparent, just requiring all of us to look at a bigger picture.

    Last week, for example, Kevin wrote about how Marriott hotels is looking at the burgeoning market of home sharing clearly in hopes of not surrendering younger generations to Airbnb for coming decades. The lesson is clear in terms of understand the forces of changing competition and consumer desires.

    Yet another example, far from our field, comes from the US Army and the dramatic changes being made in recruiting to fill the endless need for more young people by better connecting with them and their issues.

    The Christian Science Monitor dove into this issue recently, examining how the military is shifting its recruitment focus to social media, especially Instagram, to better connect with young people and to inform them more fully about the career opportunities enabled by military service.

    The parallels to retail - both as a destination for shoppers and associates - are numerous.

    For instance, military recruiters have come to recognize that old methods are being rendered useless by new technology. For example, cold-calling prospects is far less successful in a day when caller ID is so widespread, stopping cold calls in their tracks. Instead, recruiters are using a wide array of interest building posts on Instagram to establish a beachhead with potential recruits. As one recruit explained, those posts - featuring memes of Rihanna, Spider-man and pugs - managed to both snag her attention and get her thinking about the military in a different way.

    Recruiters says social media - all current problems aside - enables them to tell a deeper story about the range of job skills recruits can learn during military service going well beyond, as they say, “busting doors down in Iraq.”

    In all honesty, I’m not a big Instagram user, but neither am I a target for military recruiters in any way and haven’t been for decades. But whenever I am on a college campus young people constantly remind me that Instagram is a widely underused tool.

    Just like the Army, retailers can and should use the social media site to expose potential recruits to the enormous array of jobs, careers and skills that may start with working in a store. And unlike the military, we can use image-heavy sites like Instagram and Pinterest to feature enticing food photos and recipes to energize and engage shoppers.

    Here’s the thing: it’s hard to imagine any organization more intractably bound to past practices than the military. As they say, generals are always fighting the last war.

    But necessity remains the mother of invention, or at least new thinking. The necessity of finding recruits is driving the military to creative marketing solutions and with some success. That strikes me as a creative and winning battle plan that retailers may need to copy especially as the labor market tightens thanks to falling unemployment rates.

    It’s also a reminder that technology is neither the solution nor the substitute for everything we do today. In many ways, technology is a partner or a tool to be used. Social sites like Instagram and Pinterest can be used to improve communications to existing and potential shoppers and associates.

    Seems like an idea worthy of consideration, being run up the flag pole and and maybe getting a salute or two.

    Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . 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: May 7, 2019

    by Kevin Coupe

    Thanks to MNB reader Elizabeth Board for pointing out a Wall Street Journal story yesterday that is a perfect example of innovative thinking that can create consumer interest and, as a result, sales and profits.

    The dateline was Shanghai, China, and the story had to do with how many Chinese consumers have started drinking their tea with cream cheese.

    Yes, that’s right. Tea with cream cheese.

    According to the story, “Known as “nai gai cha” (‘milk-lidded tea’) in Chinese, the drink is made using a base of tea topped with a cap of cream and cream cheese that is whipped together until it forms a light, fluffy texture. Tea houses encourage drinkers to sip it at a 45-degree angle for the ideal mouthful. And it’s become a bona fide phenomenon.”

    The story goes on to say that “cream-cheese topped tea has grown so popular so quickly that New Zealand-based Fonterra Co-operative Group Ltd. built a new plant last year that churns out 24,000 tons of cream cheese annually for China’s tea macchiatos. Overnight, the factory became one of the largest producers of cream cheese in New Zealand.” Kudos to Fonterra for grabbing the moment.

    What’s really interesting about this is that apparently most Chinese consumers had no preconceptions about how to use cream cheese - what did they know from bagels and lox? And so putting cream cheese in tea was as natural as putting cream in tea.

    Are venti nai gai cha teas in our future? Wouldn’t bet against it … and it may end up being an Eye-Opener.

    However … the story also notes that another drink gaining some popularity in China is “beer macchiatos,” which is a beer served with cream cheese on top.

    A bridge too far, methinks.
    KC's View:

    Published on: May 7, 2019

    Amazon today is opening its first checkout-free Amazon Go store in New York City, in the downtown-Wall Street area, and reports say that it will be the first Go store to be able to take cash.

    The Associated Press reports that “in the new store, employees will swipe those who want to pay by cash through the turnstile entrance. After shoppers grab what they want off the shelves, an employee will scan each item with a mobile device and check them out. There still won’t be cash registers in the store.

    “Cameron Janes, who oversees Amazon’s physical stores, says the way it accepts cash could change in the future, but declined to give details … ’We’re going to learn from customers on what works and what doesn’t work and then iterate and improve it over time’.”

    The AP goes on: “It’s not clear how many shoppers will skip the app and want to pay by cash at Amazon Go. The New York store, the first in the city, is in Brookfield Place, a high-end shopping mall and office complex that houses a Gucci store and office workers from banks and credit card companies. Amazon expects many of its customers to be workers looking to pick up a lunchtime salad or sandwich, people who live in the area or tourists visiting the nearby World Trade Center.”

    This is the 12th Amazon store overall. The others are in Seattle, San Francisco and Chicago.
    KC's View:
    I appreciate the fact that the folks at Amazon are sensitive to criticisms that checkout-free stores unfairly exclude people who don’t have credit cards, and they certainly don’t want to add fuel to the legislative fires in some places that are pushing for laws that would ban stores that don’t take cash.

    I’m not nearly as smart as the folks at Amazon, but it might’ve been interesting to test a different approach, like making the stores only accessible to people who are members of Amazon Prime. Not sure what the response would’ve been, but it would have been interesting.

    As it is, we’ll have to see how compelling the format is to people who have to stop for a more conventional checkout experience.

    Published on: May 7, 2019

    Fast Company reports on the three CVS stores in Houston that are piloting its HealthHub concept, described as “a new kind of healthcare destination that blends the convenience of the pharmacy chain with the ease and familiarity of  a neighborhood community center.”

    Here’s how it operates:

    “The HealthHub locations might look like a normal CVS Health, but 20% of the store now offers a broader range of healthcare services, like one-on-one nutritionist counseling and workout classes. There are new product categories, including fitness products (like say, a yoga mat) and an expanded homeopathy category for sleep, anxiety, or memory improvement. In addition, it carries durable medical equipment (wheelchairs and monitors) and supplies for those suffering from conditions such as sleep apnea and diabetes.

    “These are all items CVS Health has never carried before. Many of them feature an overhead digital screen that highlights the product’s use and efficacy. For those who want to learn more, ‘learning tables’ display multiple iPads where they can discover more about their healthcare needs.”

    While the HealthHub stores also include MinuteClinics, these three “offer a more comprehensive service, such as more staffed personnel who can answer medical questions as well as nurse practitioners who can do thorough examinations.”
    KC's View:
    This may be a test, but it certainly is a test that fits within CVS’s broader strategy, which is to reduce retail space and increase the focus on healthcare services. I’m sure there will be a number of tests of varying approaches, but the momentum seems - appropriately, I think - to be all in one direction.

    Published on: May 7, 2019

    CNBC reports this morning that Walmart plans to expand the number of veterinary clinics in its stores from21 to 100 in the coming year, starting with nine that will open in the Dallas market next month, offering vaccines, care for minor illnesses and other routine exams.

    According to the story, “Walmart also will launch an online pet pharmacy, WalmartPetRX.com, rivaling PetSmart’s e-commerce business, Chewy.com, which also has an online pharmacy unit. Walmart said its website will offer low-cost prescriptions for dogs, cats, horses and livestock, from more than 300 brands.”

    Walmart says that it “has seen a roughly 60% increase in the number of dog- and cat-related health-care items sold on its website over the past year.”

    Some context: “The American Pet Products Association. The industry trade group estimates spending will exceed $75.3 billion this year, compared with $60 billion spent on pets just four years ago.
    KC's View:
    This is a big opportunity, and Walmart is smart to exploit it.

    Published on: May 7, 2019

    Restaurant Business reports that Shake Shack is considering something radical - charging more for its burgers (and fries and shakes) that are delivered to consumers than for those served in its restaurants.

    CEO Randall Garutti told analysts during a call last week that the company’s “menu pricing does not change on any channel. That said, we are wide open to considering those things. I think there seems to be a great willingness to pay on digital channels. … It’s not something we are going to jump on today. We are mostly concerned at continuing to grow traffic, grow the channels.”

    At the same time Garutti said, Shake Shack plans to maintain its focus on an up-market product, with no intention of veering into the value pricing lane.

    “I like us to be considering around the core menu how we can tinker at both ends of the high and low pricing over time,” Garutti said. “Generally, I think you’ll probably see us go higher. … Not sure how many low-priced things we are looking for. We want to compete on quality and experience and not just on price.”
    KC's View:
    If any company is going to be able to justify charging more for delivery - running counter to conventional wisdom - it is a company like Shake Shack that never goes for the lowest common denominator. Not everyone can - or should - adopt this approach. But I’m happy someone does (and that there is a Shake Shack less than a mile from my home and office).

    Published on: May 7, 2019

    Fast Company argues in a story this week that “marketers have it wrong. The most important consumer group isn’t the 18-to-24 set, as conventional business wisdom has it. It’s older adults.”

    Here’s the explanation: “Globally, 55-year-olds will outnumber 5-year-olds by 2020, and by 2050, the number of people aged 50 and older will rise to 3.2 billion, a twofold increase since 2015. In the United States, those 50 and older accounted for $7.6 trillion of economic activity in 2015, almost half the country’s gross domestic product. Worldwide, spending among older consumers could reach $15 trillion next year."

    And yet, while “the imperative for businesses to better serve aging populations is clear,” it isn’t hard to see “that the world is designed abysmally for older adults, from microscopic screens to packaging that can’t be opened easily to broken elevators and inaudible announcements on public transportation … This isn’t necessarily a failing of individual companies. Rather, it’s a societal failure to understand the value of older people–to see aging as a welcome progression of life, rather than an inconvenience.”

    The piece is part of a series in Fast company called “The New Business of Growing Old,” which you can read here.
    KC's View:
    I suspect that we’re going to see a lot of these stories in the coming days; it was just the other day that Michael Sansolo wrote about how airports are adapting to older travelers and the lessons this can teach retailers. Part of the reason we’re going to see increased coverage is that writers and editors are getting older, and becoming more aware of the issues. This would include Michael and me … though speaking for myself, at least, I’m going into this demographic kicking and screaming.

    Published on: May 7, 2019

    Axios reports on a new and sweeping United Nations study saying that as many as one million of the earth’s eight million species of plants and animals could become extinct in coming decades, and that “human activity is accelerating this crisis, as habitat loss and climate change exert unprecedented pressure on wildlife.”

    This means that “biodiversity is declining at the fastest rate in human history,” which “directly threatens human well-being by reducing the number of crops and livestock available to produce food … It will also limit the availability and development of new drug treatments for human diseases, among other ramifications.”

    Axios writes that “we're well past the point of just needing to stop habitat loss. More than 500,000 species lack enough habitat right now for long-term survival.
    But as the U.N. report repeatedly notes, it is not too late for the types of change that could make this happen.

    “For example, nearly 100 groups worldwide are working to designate 30% of the Earth's surface for protection by 2030, and 50% by 2050, in an effort to avert the extinction of many marine species.”

    Some other findings, from the New York Times coverage:

    • “Global warming has become a major driver of wildlife decline, the assessment found, by shifting or shrinking the local climates that many mammals, birds, insects, fish and plants evolved to survive in.”

    • “Humans are producing more food than ever, but land degradation is already harming agricultural productivity on 23 percent of the planet’s land area, the new report said. The decline of wild bees and other insects that help pollinate fruits and vegetables is putting up to $577 billion in annual crop production at risk. The loss of mangrove forests and coral reefs along coasts could expose up to 300 million people to increased risk of flooding.”

    The Times writes that the study’s authors “outline a vast array of changes aimed at limiting the drivers of biodiversity loss.

    “Farmers and ranchers would have to adopt new techniques to grow more food on less land. Consumers in wealthy countries would have to waste less food and become more efficient in their use of natural resources. Governments around the world would have to strengthen and enforce environmental laws, cracking down on illegal logging and fishing and reducing the flow of heavy metals and untreated wastewater into the environment.”
    KC's View:
    Every once in a while, we have stories about reducing the use of paper cups or plastic straws or eliminating single-use shopping bags … and then, inevitably, we’ll get pushback from people who question whether such efforts will have any impact.

    Studies like this make me think that even the smallest of efforts make sense, and I cannot imagine why anyone would resist.

    Published on: May 7, 2019

    It was just what the last season of HBO’s “Game of Thrones” needed.

    More publicity.

    The series takes place in medieval times, in a fantasy setting, and yet, somehow, on Sunday’s episode, “The Last of the Starks,” there was a Starbucks cup sitting on a table in front of Daenerys, one of the central characters.

    The Verge website asked the important questions: “Was it an uncharacteristic slip-up from one of the most expensive shows on television? Or perhaps it was a more sinister attempt at product placement for the ubiquitous coffee chain?”

    Bernie Caulfield, an executive producer on the show, said that “the offending cup was just a simple mistake.”

    The story says that “there’s still no word yet from HBO on whether the company will be updating the episode to remove the misplaced Starbucks cup through some movie-editing magic, but as of publication time, the cup can still be seen on HBO’s streams of the episode.”

    HBO has released a statement, however, confirming that “the latte that appeared in the episode was a mistake. Daenerys had ordered an herbal tea.”
    KC's View:
    Not a “Game of Thrones” viewer, but my sons are rabid fans so I have some awareness of it.

    It was extraordinary the degree of publicity that this goof generated in social media. I especially liked the tweet that said, “Feeling sorry for the Starbucks [barista] that had to write out ‘Daenerys Stormborn of the House Targaryen, First of Her Name, the Unburnt, Queen of the Andals and the First Men, Khaleesi of the Great Grass Sea, Breaker of Chains, and Mother of Dragons.’”

    Published on: May 7, 2019

    Advertising Age reports that “NBCUniversal is doubling down on couch potato shopping with a new program that allows viewers to buy the products they see on TV. On Monday, the network formally introduced ShoppableTV, a tech-enabled offering that gives brands the opportunity to sell exclusive product directly to consumers on the platform … Consumers are encouraged to hold their phone up to the TV screen during specific ‘shoppable’ moments that include a QR code, turn on the camera app and click a button. They’re then taken to the retailer’s website and the specific product page of the initial item.”
    KC's View:

    Published on: May 7, 2019

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

    NorthJersey.com reports that with considerably less fanfare than accompanied Amazon’s search for an HQ2 location, its bricks-and-mortar supermarket business, Whole Foods, has signed a lease for a new Northeast Regional office in Jersey City, New Jersey. The office will cover all of its stores in New Jersey, New York and Connecticut.

    Of course, the move isn’t that big a deal - until this point, Whole Foods’s regional offices covering this area were in Englewood Cliffs, New Jersey, less than 20 miles to the north.


    • The Chicago Tribune reports that Lands’ End is in the process of separating itself completely from its former parent company, Sears, closing “the brand’s last 40 stores inside Sears, already down from 174 at the start of last year. That would cut what CEO Jerome Griffith said is one of its only remaining links between the retailers. ‘We’re looking to exit as quickly as possible,’ he said. ‘We’re not in their (Sears’) long-term plans, and they’re not in ours’.”

    The story says that Lands’ End expects to have 40 to 60 physical stores open within the next few years.

    Griffith has to feel a little like Lady Macbeth, trying unsuccessfully to get the blood off his hands … except that in this case, it is the Sears stench he;’s trying to get rid off, and he’s saying, “Out, damned Sears.”
    KC's View:

    Published on: May 7, 2019

    …will return.
    KC's View:

    Published on: May 7, 2019

    In this new edition of the Retail Tomorrow Podcast, we discuss the unique partnership between Kroger and Microsoft, developing cutting edge innovations that will take each of them to the next level when it comes to things like digital shelving, video analytics, sensor networks, temperature tags … and beyond. And here’s the thing - the innovations that emerge are not proprietary, but will be available to any retailer looking to leap into the future.

    This podcast was recorded at GMDC’s recent Retail Tomorrow Immersion conference in Los Angeles.

    Our guests:

    • Kevin Fessenden, Senior Product Manager at Sunrise Technology, which is a Kroger company.

    • Chris Dieringer, Senior Director of Industry Solutions for the Retail and CPG Industry at Microsoft.

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

    You can listen to the podcast here, or on iTunes and Google Play.

    Pictured, from left to right:

    Kevin Coupe, Chris Dieringer, Kevin Fessenden.




    KC's View: