Published on: August 14, 2019
In this, the second of two podcasts recorded on the exhibit floor at the United Fresh Produce Association show in Chicago and produced by GMDC, we look at how companies go outside their traditional lanes to explore new consumer connections and marketing advantages as they seek fresh (in every sense of that word) levels of relevance and resonance to the shopper. Our guests are two executives from the world of retail who operate in completely different geographic areas but who, as the retail world goes through a series of revolutions, seem to have more in common every day.
They are:
• Greg Corrigan, senior director of produce and floral at Raley’s, where he’s worked for two decades; Greg also is the current chairman of United Fresh.
• Tony Stallone, the “produce guru” at Ahold Delhaize-owned Peapod, where he brings a lifetime of experience in the produce business to one of the first and arguably most sustainable e-commerce business models.
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.
Pictured, left to right: Kevin Coupe, Greg Corrigan, Tony Stallone
- KC's View:
Published on: August 14, 2019
by Kate McMahon
The pencils, and the retail knives, are sharpened in the battle for the estimated $80 billion back-to-school shopping market.
Retailers across the country are rolling out new incentives to draw list-toting parents and kids into stores - and onto websites - to purchase basics ranging from a 96-cent folder to a $94 calculator.
The back-to-school shopping season got a jump start last month, as competitors launched “Black Friday in July” sales to challenge Amazon’s fifth annual (and revenue record-setting) Prime Day on July 15, which actually lasted two days. Apparel and consumer electronics dominated that July bump in back-to-school items. Clothing and shoes continue to account for 54% of purchases this month, followed by everyone’s long list of small items that definitely add up: lunchboxes, backpacks, three-ring binders, pens, glue sticks and more.
Admittedly, the retail landscape has changed dramatically since I last went on a back-to-school supply pilgrimage. I am dating myself by revealing we had to wait until mid-August for the photo-copied school supply list to arrival via U.S. Mail.
What hasn’t changed is the emphasis on price. According to a new survey from Deloitte, consumers want competitive pricing and clearly defined deals and coupons. As evidenced by a current Walmart TV commercial touting a “fashion folder” for 96 cents, and a Staples ad closing with Crayola colored pencils for 97 cents, shoppers are indeed paying attention to price, down to the penny.
What has changed, and continues to evolve, is how shoppers are researching prices and products and where they shop. According to the Deloitte survey:
• Most back-to-school purchases (56%) will occur in stores, with 90% of respondents saying they plan to visit a mass merchant store this season.
• Online shopping has increased to 29% of the market, up from 23% last year.
• More shoppers (60%) are using their smartphones to visit retailer sites, obtain price info and search for deals, while use of laptops and desktops is on the decline and down 6% from 2018.
• The later-season “undecideds” are tilting toward e-commerce.
I think the business takeaway is clear: consumers want multi-channel marketing that allows them to decide how, when and where they want to shop. Smart retailers need to make sure they deliver – in-store and in e-commerce. Websites, apps, and social media presence must work in sync create a consistent customer experience. Whether online or in the back-to-school aisle, time-pressed parents don’t want to waste time searching for products or they will move on to the next store or website.
Perusing the sales, I found both Target and Staples are featuring innovative programs. Target’s School List Assist finds supply lists for neighborhood schools through zip code, school name and grade. Shoppers can complete the list in just a few clicks, and also check inventory at the nearest store, before deciding where to make their purchase.
Staples, which also has many class lists available online, is hosting two-day neighborhood “block parties” with entertainment and raffles at select stores across the country – including 20% off of school supplies.
At both stores, and at many competitors, some of the very best deals are not available online - which is one way to encourage people to patronize bricks-and-mortar locations.
That said, I still think I’ll skip the block parties and back-to-school sales and replenish my copy paper and laser-jet ink supplies after the school buses start to roll.
Comments? Send me an email at kate@mnb.grocerywebsite.com .
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- KC's View:
Published on: August 14, 2019
by Kevin CoupeTechCrunch reports that a new analysis from Second Measure suggests that Walmart continues to dominate the US online grocery business, offering “grocery pickup and delivery in nearly every U.S. state, and had 62% more customers in June than its next nearest rival.”
That “next nearest rival,” according to the research, isn’t Amazon, which it suggests has a strategy that may be confusing to customers.
Here’s how TechCrunch relays the research:
“The retailer is competing against itself by offering two services — Amazon Prime Now and AmazonFresh. The latter, an older service operated before Amazon’s Whole Foods acquisition, is actually one of the few online grocery businesses in decline, the report discovered … This June, AmazonFresh sales were down by 19% year-over-year — the worst sales change in the new research report, the analysts noted.
“Prime Now, on the other hand, is booming. Year-over-year sales nearly tripled in June. This is not only due to Whole Foods, whose assortment was added in February 2018, and is now a big driver for orders. Consumers also likely opt for Prime Now because it’s offered as part of their annual Amazon Prime subscription, while AmazonFresh is an additional $14.99 per month.”
That’s all interesting. I suspect even the folks at Amazon would acknowledge that their grocery-related efforts are a work in progress.
But what really fascinated me about this story was the company that the research defined as being Walmart’s “next nearest rival.”
Instacart.
The Second Measure analysis indicates that Instacart, in fact, “had 23% more customers in June than it had” in December 2018 when its relationship with Whole Foods (an early customer, until it was acquired by Amazon) ended.
In some ways, that doesn’t surprise me. Instacart has said publicly that Amazon’s acquisition of Whole Foods was terrific for its business, because it woke traditional retailers up to the potential of the Amazon threat.
But it ought to worry the retailers that got into bed with Instacart that it is the one being identified as the competition to Walmart. Not the retail brands that it supposedly represents.
Yet another indication, I think, of how big a threat Instacart is going to be to these retailers that it currently has as clients. When it starts opening dark stores of its own to serve shoppers so that it doesn’t need those retail clients, or creates its own-label brand of products, or uses the shopper data it has accumulated, or takes advantage of the fact that shoppers increasingly believe they are shopping at Instacart, not the retailers that it is supposed to be serving … well, I think these retailers are going to wake up one morning and realize that they have allowed an enormous, market share-eating Trojan horse to be rolled into their businesses.
It’s going to be an Eye-Opener. Unless some of these retailers open their eyes now.
- KC's View:
Published on: August 14, 2019
Walmart has once again come under tough criticism from anti-gun advocates, this time because it has been selling t-shirts online that promote pro-gun sentiments just days after the mass shooting at its El Paso, Texas, store by a white nationalist domestic terrorist that resulted in the deaths of 22 people.By the end of the day yesterday, it appeared that Walmart had taken down the offending items from its site.
One of the slogans promoted on the shirts: “Gun control is being able to hit your target.” Another one suggested that people have a choice - be gun owners or be targets.
The shirts were actually being sold on the Walmart site by third party vendors, according to reports.
Advertising Age writes that there were a range of reactions to the shirts, with some calling them “disgusting” and “horrifying,” and another saying that “most people in the country completely agree with the sentiment of this shirt.” This, the story suggests, “is only the latest consequence of the shootings for Walmart: last week, it removed signage around violent video games.” Walmart, while it has eliminated a lot of gun sales from its stores over the years, has thus far said it has no plans to eliminate all gun sales, no matter how much pressure it receives.
The story notes that “it’s not the first time Walmart has gotten into hot water for controversial t-shirts for sale on its website. The retailer felt heat in 2017 after a third-party seller offered t-shirts that suggested killing journalists. The t-shirts read: ‘Rope. Tree. Journalist. Some assembly required.’ Last year, its website offered t-shirts from third-party sellers with ‘IMPEACH 45’ emblazoned across the front in big capital letters - a call to bring down the 45th U.S. president, Donald Trump.”
- KC's View:
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It seems to me that there is objectively a difference between inciting violence and calling for a constitutional action. (Though I’m sure there are those who would argue the opposite.) I also think there is something called timing … and the pro-gun t-shirts on Walmart’s site were a case of lousy timing. (Though I’m sure there are those would would argue the opposite.)
Let’s give Walmart the benefit of the doubt here … they were being sold by third-party sellers, and it may not even have occurred to them to take them off the online marketplace. I do think that removing them, even if belatedly, was the right move.
This is only going to get uglier. There continue to be news reports about people calling in threats against Walmarts around the country, and I wouldn’t blame anyone for being skittish about going certain places because they fell like they have a target painted on their backs.
The question is, when will the next domestic terrorist attack come, and where.
Not if.
Published on: August 14, 2019
The New Yorker, go figure, has a story about a new innovation from Driscoll’s - “the company that introduced the plastic clamshell to fruit and defined the strawberry in our minds as wasp-waisted, full-chested, and lipstick red - is a rosé strawberry, ‘the least red berry,’ the company says, it’s ever released to the American market. Rosé berries are a ‘limited edition,’ scant and seasonal, available only June through September, and twice as expensive as the regular Driscoll’s berry, something special for the special few.”But this new product only distracts from a disturbing reality: “The strawberry industry is shrinking, with fewer fields under cultivation and the cost of hiring pickers for the back-wrecking job of stooping over rows increasing … But the real changes have come from … the angered weather gods. The foggy coastal environment where strawberries thrive is undergoing drastic environmental change, with hotter summers and more saline soils.”
Climate change strikes again, and you can read about it here.
- KC's View:
Published on: August 14, 2019
The Verge reports that employees of Amazon-owned Whole Foods are demanding that the mother company stop enabling Big Brother-like behavior.The story says that the employees object to Amazon’s business dealings with government contractor Palantir, which works for the US Immigration and Customs Enforcement (ICE); Amazon reportedly sells cloud computing capability to Palantir, and has had discussions about selling its facial recognition software to the company.
In a public letter posted by the group, it promises to “continue to combat the company by leaking information and attempting to undermine policies and business dealings that lead to the deportation of undocumented people and other rights abuses.
This all occurs as Bloomberg reports that “the U.S. Customs and Border Protection agency is set to expand its use of facial recognition, deploying the controversial technology to screen people entering the country … CBP is looking for a private vendor to provide the technology and to move key software applications to cloud-computing services. The contract, set to start in December and extend as long as May 2025, may be worth as much as $960 million.”
The story acknowledges that “as software has improved and computing costs fallen, facial recognition has grown from science-fiction into a useful tool in recent years. A backlash has followed. San Francisco banned the technology in May, citing privacy and civil liberties concerns, and several cities are considering similar moves. Critics have called for U.S. companies working on the tech, such as Microsoft Corp., Amazon.com Inc. and Google, to curb its development or stop it altogether.”
- KC's View:
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If these folks are pissed off at Amazon now, I can only imagine how livid they’ll be if it gets that big Pentagon cloud computing contract it has been angling for. (Though it appears that political considerations - namely President Trump’s dislike of Jeff Bezos - could get in the way of that.)
Published on: August 14, 2019
The New York Times had a story the other day about how Uber, in its desire to generate new growth, “has teamed up with cities and transit agencies in the United States, Canada, Britain and Australia to provide tickets, to transport people with disabilities or sometimes to substitute for a town’s public transportation system entirely. Since 2015, Uber has inked more than 20 transit deals.”CEO Dara Khosrowshahi’s goal is a modest one: to turn the company into the “Amazon of transportation.”
According to the Times, Uber wants to “become a one-stop shop for car, bike, scooter, bus and train trips. Doing so would help Uber draw more riders, especially as the company faces questions from Wall Street about whether it can make money and revive its once red-hot growth rate.”
- KC's View:
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There is one interesting note about the strategic move. The Times points out that mass transit usage has gone down in a number of cities in part because of the easy availability of Uber and its chief rival, Lyft. The argument is by making Uber part of a larger ecosystem, it can make entire systems more organic and responsive to riders’ needs.
Which I guess makes this one for the “if you can’t beat ‘em, join ‘em” files.
Published on: August 14, 2019
Chipotle Mexican Grill, which has been working assiduously to revive its fortunes after a spate of highly public food safety issues, said yesterday that more than “2,600 employees across 135 restaurants qualified to earn up to an extra week of pay as a result of its newly announced crew bonus program.”The company explained that “if restaurant teams meet certain criteria such as predetermined sales as well as cashflow and throughput goals every quarter, they'll have the opportunity to earn up to an extra month's pay each year.”
Chipotle said in its press release that it “remains steadfast in its talent retention efforts in order to create a strong brand affinity that translates into a great customer experience … Over the past year, the company has seen a decrease in turnover at the manager and crew level. Retaining more crew members means that guests are receiving a more positive and consistent experience in Chipotle restaurants.”
- KC's View:
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If you are trying to build teamwork, regardless if your brand is distressed or not, cold hard cash is a pretty good way to go about it. Not the only way, but I’ve always thought that bonuses paid to front line folks may be even more effective than bonuses paid to c-suite folks.
Published on: August 14, 2019
…with brief, occasional, italicized and sometimes gratuitous commentary…• CNet has the story of how every student at St. Louis University, the private Catholic college just west of the city’s downtown, is getting an Alexa-powered Echo Dot in their campus orientation packets.
According to the story, “Now in its second year, the Alexa at SLU initiative is a fixture in the residence life culture. Each dorm room comes equipped with an SLU-emblazoned, second-gen Echo Dot and instructions on how to use it, what students can ask and what to do if there are technical issues … The network of 2,300 Echo Dots is powered by Amazon's Alexa for Business platform. A private SLU skill built through Amazon Web Services is enabled on each Echo Dot. That skill can answer more than 135 questions about campus events, building hours, even nearby food options.
“Students can stream music, podcasts and live radio through iHeartRadio and call any phone number, including contacts in SLU's directory of student services.”
The program was launched when school IT officials saw Alexa-powered systems at the annual Consumer Electronics Show (CES) and began to consider how the technology - intuitive for college students - might be useful in helping to communicate and even curate the campus experience.
How better to create lifetime customers than getting them hooked at a fairly young age? I can’t think of a way … especially if the Alexa devices are programmed specifically to be both relevant and resonant to the way these students live.
I’m trying to remember what we got in my dorm when I started college. I remember utilitarian furniture, an uncomfortable bed, cinder block walls, a tiny desk, and a landline phone jack. In other words, not much … but I also remember that being a pretty outstanding experience. Not to be overly simplistic about it, but I hope the students don’t always ask Alexa what the weather is; sometimes, you actually have to go out and stand in the sun or the rain and breathe the fresh air and feel the freedom that comes with being a college student, which will never come again.
• The Washington Post reports that Amazon has expanded on its use of autonomous “Amazon Scouts,” which are sort of mobile coolers on wheels that are capable of making deliveries to customers.
After having been launched in Seattle-area neighborhoods as an initial test, the Scouts now are making deliveries in Irvine, in Southern California.
According to the story, “The company said the light blue and black robots are able to safely navigate typical neighborhood obstructions such as trashcans, skateboards and lawn chairs. And yet the six-wheeled, battery-powered machines can’t climb steps and will initially be chaperoned by a human employee to monitor their progress.”
• Bloomberg reports that Amazon “is in late-stage talks to acquire as much as 10% of India’s Future Retail Ltd … as the U.S. company moves to bolster its brick-and-mortar presence in one of the world’s fastest-growing retail markets … The potential deal underlines the American online giant’s ambitions to dominate the last sizable market yet to be conquered by large networks of hypermarkets and supermarkets, after losing ground in China.”
India law has prevented US companies from wholly acquiring businesses there, but Amazon has been buying stakes in a number of Indian retail companies as it seeks to keep the upper hand in its rivalry with Walmart.
- KC's View:
Published on: August 14, 2019
• Bloomberg reports that Smithfield Foods, the largest pork producer on the planet, is getting into the plant-based protein business, “launching a new line of soy-based products under its Pure Farmland brand, including burgers, meatballs and breakfast patties.”The story suggests that this is a case of Smithfield playing catch-up - not just with consumer tastes, but also with competitors: “Tyson Foods has announced it will offer a burger made of half beef and half pea protein, while Perdue Farms is launching ‘Chicken Plus’ nuggets made from a blend of chicken, cauliflower and chickpeas.”
All of these companies, Bloomberg points out, are “watching the success of Beyond and Impossible, are trying to cash in on the rise of the ‘flexitarian’ lifestyle --consumers who aren’t avoiding meat entirely, but want to reduce their consumption by replacing it with other plant-based options. The plant-based category could capture as much as 10% of the global meat market in ten years, reaching $140 billion, according to a recent report from Barclays.”
• Fast Company writes about how Coca-Cola-owned Dasani is rolling out a new machine that dispenses water and seltzer … but only if you bring your own bottle. It is, the story says, part of the company’s plan “to reduce its plastic waste footprint.”
The story says that the machine, called PureFill, “is one of 100 that Dasani is rolling out to test as one approach to deal with the problem of plastic waste, of which it is a major contributor … It’s part of a handful of new strategies that the company announced today it is trying to reduce plastic waste. This fall, it will start selling Dasani in aluminum cans in the Northeast, expanding to other regions next year, followed by aluminum bottles. Aluminum cans are more likely to be recycled than plastic bottles, and are made from more recycled material.”
Fast Company concedes that “it’s not clear how much this can begin to replace traditional bottled water, since public drinking fountains already exist and sales of bottled water continue to rise, despite growing awareness about plastic pollution … But if marketing drove the demand for bottled water in the first place - making a little-used product ubiquitous late in the 20th century - it’s possible that marketing could also help change habits.”
• The Food Marketing Institute (FMI) announced that Tanya Triche Dawood, vice president and general counsel for the Illinois Retail Merchants Association (IRMA), has been named as the 2019 Donald H. MacManus Award recipient for “her extraordinary achievements in public and regulatory affairs.” The award was presented yesterday at FMI’s annual State Issues Retreat.
- KC's View:
Published on: August 14, 2019
• United Natural Foods, Inc. (UNFI) said yesterday that its CFO, Mike Zechmeister, is resigning to take the same job at logistics provider C.H. Robinson. He will be succeeded on an interim basis John W. Howard, the company’s senior vice president of finance.- KC's View:
Published on: August 14, 2019
Got the following email from MNB reader Jeff Weidauer about my contention that checkout-free technology will end up being as important to retailing as scanning:I have to play the role of contrarian here and point out that checkout-free stores remain much more concept than reality. The few stores operating are convenience store-size, and just getting those to work takes buckets of money and more than a few back office folks to watch the video screens. Translating that concept to a full-size supermarket expands those resource requirements exponentially. “Go-type” stores are a lot like self-driving cars -- a really cool idea, but I’m not standing on one leg waiting for either one to happen.”
I’m not waiting on one leg waiting for anything to happen. And I’m not sure I’ve ever suggested that this will happen soon, and certainly not overnight.
But in the words of Jean-Luc Picard … Everything is impossible, until it’s not.
Regarding Whole Foods after its acquisition by Amazon, MNB reader Aaron Gottschalk wrote:
Realizing it's only one store out of many, the newer Minneapolis WFM has gone downhill over the past two years to a degree that I have never seen a WFM present itself with product availability issues, empty food bars, higher price points on sale items, and a lack of training that showed itself when I paid for some groceries with dollar coins and the cashier had never seen them and didn't know where to put them in his till.
Having visited this store since the time it opened and having enjoyed and valued that experience I am not apt to return with expectations that will be fulfilled. As Chick Hearn would say "the mustard is off the hot dog". From someone who has been in the Natural Foods Movement for over 35 years it's clearly evident that WFM is having a lot of problems both internally and externally and I don't perceive an easy fix being possible at this point.
I take your point, and bow to your expertise. I haven’t seen that kind of decline in my Whole Foods, but that could mean one of two things - either store management has done a better job than the one you reference, or I’m not as sensitive as you are to any changes that have taken place.
To be honest, I’d bet on the latter.
- KC's View: