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    Published on: June 27, 2019

    This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

    Hi, Kevin Coupe here and this is FaceTime with the Content Guy.

    Well, I seem to be getting to that point in life where I’m going to more weddings than in recent years. (Also more funerals, but that’s for a different FaceTime…) We’re going as guests, and as I’ve mentioned here in the past, I’ve also had the opportunity to officiate at a couple (thanks to my ordination in the universal Life Church).

    I was perusing a website that has been set up by two young people who are friends of our family and who are getting married later this summer, mostly because I wanted to make sure that the one suit that I own will be appropriate. (I wear it to funerals and weddings, and to emcee the annual City of Hope gala, and that’s pretty much all the use it gets.) But while I was there, I decided to check to see where they are registered, mostly because I wanted to impress Mrs. Content Guy with such in-depth knowledge.

    Go figure … they’re registered at REI. Not what I expected, and it took a little doing to convince Mrs. Content Guy that I hadn’t imagined it. Or hallucinated it.

    The thing is, just a day or two later there were a couple of stories in the Washington Post making the point that our young friends aren’t alone, or even all that unique, inn picking out such a seemingly unorthodox place to register for wedding presents.

    It used to be housewares and fine china and flatware and bedding that young people would register for, but not anymore. The Post reports that engaged couples are asking for things like TSA Pre-Check … tickets to Harry Potter World … snorkeling lessons … and the like. And, they can be incredibly practical in their requests, asking for things like fertility treatments, or money they can put toward college loans or down payments on homes.

    Some of this shift is because these young people are hungry for experiences and less interested in getting “things,” and some of it is because a large majority of them are living together and have many of the things they need for a home.

    (I’d like to point out here that I was a man ahead of his time. I thought when I got married more than 36 years ago that it was silly to get Waterford crystal and fine dishes … I correctly predicted that these would be things that would be put away and only be used once every couple of years, if then.)

    Another Post story made the point that wedding cakes are out. Something like a third of all weddings are now featuring some other dessert: “Cobbler carts and cookie bars with big apothecary jars of toppings. Macaron displays, fruit pies or a waffle station. Tiny desserts with little bourbon pairings. Individual sweet treats served on the dance floor.”

    The Post points out that this does not seem to be a trend driven by costs - it is just that these newlyweds want what they want, and see no reason to observe a tradition that has no meaning to them.

    This is, I think, a good lesson with broader implications. A lot of retailers and manufacturers tend to think that in many ways, while consumer attitudes do evolve, in many ways (and more than they would like to admit) the next generation will resemble their parents, and that as long as they get the fundamentals right, everything will be okay.

    I don’t think that’s true. I think the next generation will resemble us in far fewer ways than we’d like to admit, I think they have different priorities and different expectations … and I think that in some ways they have their heads screwed on straighter than I did at their age.

    Businesses not in touch with these basic differences inevitably will find themselves at a disadvantage, because they’ll be marketing flatware to people who would rather have money to go on a canoe trip, or marketing cake to people who prefer pie.

    That’s no way to do business.

    About that pie thing, by the way … I’m totally on board. Because as Mrs. Content guy would confirm, one of the ways to my heart is through my stomach.

    That’s what is on my mind this morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: June 27, 2019

    by Kevin Coupe

    Brands have long believed that loyalty is one of their most important advantages, but Nielsen is out with new research suggesting that “just 8% of consumers consider themselves to be firmly committed loyalists.”

    That’s right. Nielsen’s new study says that more than nine out of 10 consumers aren’t loyal to any brand.

    And yet, Nielsen says, “marketing tactics and investments rarely reflect these realities. A whopping 46% of consumers tell us they are more likely to try new brands than they were five years ago; a clear signal to a trend we should expect to intensify. Yet we see few signs that adjustments have been made to marketing initiatives or innovation pipelines to match these numbers.”

    In addition, the research says, “A massive 42% of global consumers say they love trying new things, and a further half (49%) of consumers - while preferring to stick with what they know - can be moved to experiment. With the overwhelming majority of consumers actively or passively open to unfaithful actions, the risks for brand owners have never been greater.”

    While price and value are both critical components in getting people to try new things, Nielsen also points out that product innovations have to extend to “identifying a brand’s larger purpose, for connecting with more discerning and fickle consumers.” In other words, telling consumers a broader story that may connect to values that go beyond simple value.

    I have a couple of thoughts about how this applies to retail.

    First, I’m not sure that this level of disloyalty exists when consumers choose their retailers, but I also think that retailers would be foolish to think that they are immune from it. In fact, the very existence of Amazon would point to the fact that a lot of consumers, and a lot of consumer spending, is in play. For too long, even the retailers with so-called loyalty marketing programs have used them as coupon delivery systems … they believe that they can create loyalty through discounts, and that’s pretty much it. I’ve long believed that retailers would be better off using such programs to prove to shoppers that they are being loyal to them, and doing so in a nuanced, differentiated way.

    Second, it seems to me that at some level, bricks-and-mortar retailers can position themselves to take advantage of brand disloyalty. E-commerce, I think, may lend itself to buying what you bought last time, but in a physical environment, there are more ways for retailers to encourage sampling and experimentation - they can celebrate the new and innovative in a tangible and effective way.

    Disloyalty can be an positive for the retailer willing to celebrate it to its own advantage. And that can be an Eye-Opener.

    It is “fundamentally evident,” Nielsen says, “that consumers are mostly less strongly bound to familiar brands, which means brand halo effects risk losing even more power over time. This is good news for new, unknown brands but a signal to the well-known, heritage brands, that the trust ties are loosening. For brands of all sizes, marketing to the growing traits of disloyalty, instead of the declining rates of loyalty will be key.”

    I’ll buy that.
    KC's View:

    Published on: June 27, 2019

    Two stories this morning about what Amazin is doing to better deliver on shopper expectations:

    Axios has a story about new research done by Rakuten Intelligence finding that “Amazon has built up a logistics arm that is already turning this industry worth many billions on its head.”

    Some data from the report:

    - “Nearly half (48%) of Amazon packages are delivered by the company itself. That's a dramatic shift from two years ago, when the Postal Service delivered more than 60% of Amazon parcels, and Amazon just around 15%.”

    - “The e-commerce behemoth is already faster than competitors — and it has ambitions of getting even speedier. It takes Amazon an average of 3.2 days to deliver a parcel after a shopper clicks ‘buy,’ per Rakuten Intelligence. For all other e-commerce companies, the average time is 6 days.”

    - “Amazon — which has started offering its shipping capabilities as a service — will be able to ship products for about two-thirds the rates of UPS and FedEx, Pellas projects. Its trucks and planes are out delivering Amazon packages anyway so it can offer shipping at cost, instead of collecting a margin.”

    "Amazon is about 40% of all e-commerce. If they're handling half of their own shipments, that's 20% of the whole market," Alex Pellas, a logistics expert at market research firm Rakuten Intelligence, tells Axios. "That's huge."

    • Amazon this morning announced the US launch of what it is calling Counter, described as “a new network of staffed pickup points that gives customers the option to pick up their Amazon packages in-store at a partner location … Counter goes live today in more than a hundred Rite Aid stores across the U.S. By the end of the year, the service will roll out across 1,500 Rite Aid locations,” the announcement says, noting that “Amazon is actively looking to bring additional partners onboard, including small to midsize businesses and other large chains.”

    More from the announcement:

    “Shipping to a Counter pickup point is easy and secure. After shopping on, customers proceed to checkout and select one of the Counter pickup points available in their zip code as their delivery location. As soon as their package arrives at the store, customers receive an e-mail notification with a unique barcode as well as a reminder of the address and the business hours of their selected store. At the store, customers provide the barcode to store staff, who will scan it, retrieve the package, and hand it to the customer. Customers have 14 days to collect their package.

    “Counter is part of the Amazon Hub family, which includes Locker, Locker+ and Apartment Locker, designed to bring the ultimate convenience to customers via pickup and return points. Locker is available in more than 900 cities and towns across the U.S., offering an alternative, secure, and convenient delivery option available at no additional cost. Locker+ locations are secure and convenient locations in neighborhoods, cities and campuses across the U.S., staffed with helpful associates and self-serve kiosks. For apartment buildings, Apartment Locker gives residents an opportunity to receive all their packages —from Amazon and beyond —safely, securely, and at a time of their choosing.”
    KC's View:
    Let’s deal with the second story first.

    Y’know what Amazon is to Rite Aid? A lifeline. Rite Aid is a troubled retailer that has been unable in many ways to establish the kind of specific identity in the healthcare/self-care business that CVS has, and also has been unable to get traction against Walgreen. It has locations, but the stores tend to be unprepossessing and relentlessly, depressingly mediocre.

    From a broader perspective, I think retailers approached to be part of Amazon’s Counter program have to be extremely careful. I understand why this is good for Amazon, and why it allows Amazon to connect more easily with its shoppers … I’m just not sure why Amazon’s competitors want to facilitate that. Yes, you have to serve your customers to the best extent possible, but I don’t think that includes jumping into bed with the enemy.

    As for the Amazon’s logistics capability … nobody should be surprised by this. This clearly has been the plan for some time, and why we’re seeing companies like FedEx start to step away from some of its Amazon-related contracts and get more aggressive about pricing and service. Amazon is unlikely to put its competitors out of business, but these moves certainly will have an impact on their sales and profitability. I feel the most pity for the US Postal Service (USPS), which generally is unable to get out of its own way and compete effectively; it generally dines out on everybody else’s leftovers, and the leftovers may be getting scarcer and less nutritious.

    Published on: June 27, 2019

    The Los Angeles Times reports that “after months of stalled contract negotiations, grocery workers at Albertsons, Vons, Pavilions and Ralphs stores voted this week to give union leaders the authority to call a strike.”

    The vote was overwhelming - 96 percent of those who voted supported a strike authorization.

    “The vote itself does not trigger a strike, but it gives union leaders the ability to call a walkout whenever they want,” the Times writes. “That can provide additional leverage during contract negotiations even if they never choose to strike.”

    It was 16 years ago, the Times writes, that the Los Angeles market suffered through “the largest and longest grocery strike in U.S. history … when thousands of workers picketed outside Albertsons, Vons, Pavilions and Ralphs stores for more than four months. Overall, the companies in the labor dispute lost a combined $1.5 billion in sales.”

    Employees’ last three-year contract expired March 3.
    KC's View:
    As I said the other day in this space, that strike 16 years ago reshaped a lot of people’s shopping habits. The competition is tougher and more numerous today, and I don’t think that a mainstream, traditional chain can afford to endure a similar scenario today.

    Published on: June 27, 2019

    Bloomberg reports that Walmart “is eliminating some jobs inside its U.S. pharmacy business as the world’s largest retailer seeks to reduce costs and adapt to an ever-changing health-care landscape … A person familiar with the decision said the pharmacy cuts will represent less than 3% of all health and wellness staffers in the U.S.”

    Spokesperson Marilee McInnis characterized the moves as “aligning our staffing with the demands of the business.”

    Bloomberg writes that “the move illustrates how Walmart is trying to balance its need to reduce expenses while expanding its business in key categories. Walmart has pharmacies in almost all of its 4,700 U.S. locations, and health and wellness accounts for 11% of its U.S. revenue.” The cuts also may mask larger ambitions: “While it hasn’t made a splashy move yet - such as acquiring a health insurer like rival CVS Health Corp. has done with its deal for Aetna - Walmart hired a new chief for the business last year and has made a series of smaller forays that show it’s interested in much more than the mundane business of filling prescriptions for Lipitor.”

    Its ambitions also aren’t just confined to human beings: Walmart also is in the process of expanding the fleet of veterinary clinics that it will have in its stores, with expectations that it could be more than 100 by the end of next year.
    KC's View:
    I don’t think there is much question that at some point Walmart will make a big move in the healthcare/self-care business. It is too big an opportunity, and there is too much at stake, for Walmart to ignore it … or let someone else have it.

    Published on: June 27, 2019

    Bloomberg reports that UK-based Tesco is working with Trigo Vision, an Israeli startup, to develop a checkout-free store similar to Amazon Go.

    Trigo “has developed a system of cameras and software that allows retailers to automatically charge customers,” the story says.
    KC's View:
    A lot of these folks - retailers and tech companies alike - are “in development” with checkout-free stores. I’m still waiting to see one.

    Published on: June 27, 2019

    Engadget reports that Amazon has decided to herald its July 15-16 Prime Days promotion with a streamed music concert that will include a performance by Taylor Swift.

    “Subscribers in 200 countries can tune in for the show July 10th at 9 PM ET,” the story says. “After it airs live, it will be available for replay for a "limited time," and it will also tie-in with promos for other Amazon stuff.”
    KC's View:
    A T-Swift concert? I’m totally in for that.

    Published on: June 27, 2019

    Fox Business reports that Walmart e-commerce customers “can now use an EBT benefit card as payment at all of its more than 2,500 pickup locations … The ability to place an online order for groceries ‘and pay for them at pickup using SNAP’ -- or the Supplemental Nutrition Assistance Program -- surfaced in 2017 as a pilot program and the rollout wrapped up on Tuesday.”

    A Walmart spokesman says that “with this rollout, Walmart becomes the first retailer to offer this method for online grocery pickup customers at scale. With our goal of having more than 3,100 pickup locations open by the end of the year, the SNAP payment option will make it even easier for more customers, no matter how they pay, to pick up their groceries without even leaving their cars.”

    Bloomberg reports that Walmart “ is re-listing its Japanese supermarket chain Seiyu following a decade-long struggle to compete with bigger local rivals.

    “The U.S. retailer will keep its majority stake in Seiyu after the listing, Walmart’s international division head Judith McKenna said in a statement Wednesday. The company also announced a mid-term business plan to offer lower prices, better products and grow e-commerce sales.”
    KC's View:

    Published on: June 27, 2019

    • The Chicago Business Journal reports that “retired Sears Holding Corp. employees won a court battle this week when a bankruptcy judge approved creation of a committee that will examine the cancellation of life insurance benefits of retirees earlier this year.”

    The story explains: “In May, the retirees claimed the bankrupt retailer wrongfully terminated policies for tens of thousands of former employees. Sears stopped paying for the policies in March, when it was reported that retirees' life insurance benefits were canceled, with retirees being told in a letter sent to them that they can pick up paying the premiums.

    “In a court filing, ‘tens of thousands of Sears Roebuck (retirees) that are entitled to a life insurance benefit under a benefit plan that had been in place for decades. ... In 2001, Sears entered into a settlement and agreed to never modify or terminate the life insurance plan, vesting the benefit rights permanently’.”

    • GS1 US, best known as the administrator of UPC barcodes, said that this week it is celebrating 45 years since the debut and first scan of the iconic barcode: “On June 26, 1974, a pack of Wrigley’s chewing gum carrying a Universal Product Code (UPC) was scanned at a Marsh Supermarket in Troy, Ohio. This historic milestone marked the beginning of the modern shopping experience. Today, the barcode is scanned more than six billion times daily and continues to be one of the most trusted symbols in the world, powering global commerce.”
    KC's View:

    Published on: June 27, 2019

    Yesterday MNB took note of a CNBC report that Apple has acquired autonomous vehicle startup Terms of the deal were not disclosed. The story said that “the deal confirms Apple’s continued interest in self-driving car software, and it will bolster the tech giant’s engineering ranks with additional employees who can build autonomous vehicle technology.”

    One MNB reader responded:

    I’m a huge Apple fan but some of their products have been largely ignored post launch. Apple Maps launched with huge failures. I’ve used Google and Waze extensively since. Recently, while in LA, I clicked a link for directions and my phone launched Apple Maps by default. In less than 10 minutes it had failed to clearly indicate a freeway split and I was off course. Once I found my way to a safe spot, I quickly switched to Waze and happily found my way to my destination. I can’t help but wonder, how much effort will Apple put into self driving cars if 10 years in, Maps still doesn’t deliver?

    Good question.

    Responding to Michael Sansolo’s column about a new Airport Sherpa service, one MNB reader wrote:

    Regarding Michael Sansolo’s “The Age of Ultra.” I can just see it now……my plane has started to board, but I’m still waiting for my Airport Sherpa to deliver my food. As the seconds pass my anxiety rises and finally I say screw it and board my plane without my food. Then I have to go through the hassle of trying to get a refund because my Sherpa was a no show…..ugh, no thanks. Sounds like a headache on top of an empty stomach.

    We had a story the other day about how Alphabet’s Sidewalk Labs, a sister company to Google, has released detailed plans for its Toronto project, where the city has given the company access to an undeveloped section of the waterfront and, in essence, offered it the opportunity to create the neighborhood of the future.

    This prompted MNB reader Gregory Gheen to observe:

    Alphabet’s Sidewalk Labs kind of reminds me of the movie The Truman Show.
    Meaning that somewhere Ed Harris is watching over all of us? (As ,long as it isn’t Ed Harris from “Westworld,” I’m okay with that.)

    All I can say is, “Good afternoon, good evening, and good night.”
    KC's View:

    Published on: June 27, 2019

    In this new episode of the Retail Tomorrow podcast, recorded on the exhibit floor at the annual United Fresh Produce Association show in Chicago and produced by GMDC, we focus on the the opportunities and challenges that the self-care movement creates for companies looking to take advantage of it, how retailers can go beyond their four walls and develop an “outpost marketing” strategy, and the degree to which information can be the most compelling marketing tool.

    Our guests:

    • Michael Stebner, director of culinary for Sweetgreen, the salad-centric fast casual restaurant chain

    • Peter Steinbrick, director of national sales at Melissa’s, an importer and distributor of exotic and specialty fruits and vegetables

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

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

    This edition of the Retail Tomorrow podcast is sponsored by Hillphoenix, shaping the future of retail through technology and design innovation.

    KC's View: