retail news in context, analysis with attitude

Got the following email from MNB reader Gary Harris (who, it would be hard to figure out, works at Wegmans):

The articles keep coming in, and all of us at Wegmans are at the same time proud and humbled by what they say. I recall when we announced several years ago our plans to open a store in Brooklyn, there were naysayers. Those who said Wegmans may be biting off more than they can chew, or that our way of doing business won’t play in Brooklyn. No way we could find the quality of staff we would need to carry the Wegmans culture and our brand of service and engagement to the jaded customers we would find in Brooklyn.

Of course, we went ahead anyway. I had a chance to visit the store and meet many of our new employees several weeks ago at an event we hold for every new store opening. I can tell you, the Brooklyn team was every bit as excited, enthusiastic, and friendly as any group I’ve met in the 20+ years we’ve been doing these. In some cases even more so.

I’m celebrating my 40th year with Wegmans this year, and it has been one of the great blessings of my life to be a part of this company and to have known and worked for 3 generations of the Wegman family. They not only set the tone for the culture you see in Brooklyn and in all our stores, they support a work environment that allows, enables, and to some extent compels the rest of us to follow suit and to lead one another to do likewise. It is an amazingly unique and special place, and shame on me if I ever lose sight of that.

Gary, I hope you'll let me know when you come visit the Harrison, New York, store pre-opening. I'd love to get together.

MNB the other day took note of a Business Insider report that Kroger plans to test a new delivery service, dubbed Kroger Package Services (KPS), in some 220 stores later this year. The service will have it teaming up with United Parcel Service (UPS), the US Postal Service (USPS), and FedEx.

Here's how the story described the new service: "The program is rolling out amid rapid growth in package deliveries in the US and globally. More than 12.5 billion parcels were shipped in the US last year, marking an increase of nearly 8% over the previous year, according to estimates from Pitney Bowes.

"Under KPS, select Kroger stores accept packages - including those that require signatures - from major carriers including UPS, USPS, and FedEx, and store them in a secure area until customers pick them up. The program also allows shoppers to drop off pre-labeled packages or bring in unboxed items for shipping anywhere in the US. Automated kiosks enable shoppers to print or purchase shipping labels as well."

One MNB reader responded:

Based on my experiences at more than one Kroger store in the Central Ohio area, Kroger is biting off more than they can chew.  The Krogers I know do not have a "Service Counter", it is better described as the "Dis-service counter".   The waits are often even longer than at their check out stations (and they close down at 9 p.m. or earlier).   Lines are shorter than at the Bureau of Motor Vehicles, but longer than even the U.S. Post Office.  Kroger's slogan is "Customers First", but actions speak louder than words.  Yesterday at 6 pm only two checkout lanes were open as they continue in their attempts to force patrons to use self checkout.

And, responding to a different Business Insider report that Kroger plans a major rebranding effort, having concluded that its customers do not have a firm enough grasp of what the nation's largest traditional supermarket chain stands for, one MNB reader wrote:

How does that old country song go? “You gotta stand for something, or you’ll fall for anything”. Perhaps this is where Kroger finds themselves when asked what they stand for.

I spent a great deal of my thirty plus years in the supermarket industry competing with Kroger. I thought they were always like a chameleon in that they could pretty much build the same “Kroger” in any neighborhood and find some success. What works in any neighborhood? Vanilla? Hmmm…probably more so than pistachio. So yeah, I would say that the folks at Kroger have great insight into their brand issue; and that is that no one can define it!

But do they really know how to go about fixing it, or better yet, uncovering it.

In my opinion, a brand, brand equity, or brand promise can’t be defined or shaped, found, or created by a new initiative, or slogan. A brand in the world of retail is a culture driven thing. Culture drives the process, standards, and protocols; directs the initiatives and keeps the train on the tracks in a consistent manner from one location to another.  How? When a supermarket chain is culture driven, everything tends to work towards one goal as defined by their culture. Publix probably comes as close as any other supermarket retailer to being a chameleon, but ask just about anyone that has ever shopped in or competed against a Publix for any amount of time and they will tell you that Publix stands for outstanding customer service and superior operational execution. Why? Not because they came up with some program that dictates all employees say hello to all customers when they make eye contact, or because of some front end excellence program, but because It's their internal culture and everything they do is born through and seen through that cultural lens. It’s their brand in the markets they serve as defined by people outside their company. It’s who they are. I worked with a great personnel manager that once told me that there are three of you…The person you think you are, the person other people think you are, and who you really are.

I always figured that at the end of the day, you are who other people think you are, It’s your personal brand. Kroger hasn’t been around this long without building a culture. Somewhere deep inside, it’s there and so is their brand. I’ll say this…every supermarket chain that’s been around as long as Kroger has employees that have worked there for thirty, forty, or maybe even fifty years. These folks always know what you were back when, what you are now, and how you got there. There’s advice of gold buried deep within those folks.  

I commented last week about this story:

It is possible that Kroger's greater willingness to try a variety of initiatives has unintentionally diluted its brand identity, and I give the company credit for recognizing the problem and addressing it. It may be that while it is making major investments in things like Ocado-powered robotic warehouses, that message - and its relevance to shoppers - is not making it through to the consuming public.

One thing I'd be thinking about is bringing all Kroger's delivery options in-house, and part of a centralized approach to logistics that does not farm any of it out to third-party delivery services like Instacart (which really only wants to take shopper data and compete with its client chains). I'd make the delivery of high-quality products and services a core brand value … and begin the transition to in-house systems.

I'd also think about developing a replenishment option that could compete with Amazon's Subscribe & Save (itself a $10 billion business), but might have even greater relevance when combined with an effective bricks-and-mortar option.

These are just some ideas. The folks at Kroger are a lot smarter than I am, and really don't need my help. I do, however, agree with the idea of enhancing and strengthening its brand image and value proposition. It may be that it is seen as being too middle of the road, and the middle of the road is where you find roadkill.

MNB reader Todd Ruberg responded:

I agree with your idea starters on Kroger rebranding. I’d encourage them to really think about what are their positive “points of difference” for their shoppers vs. their competition.

What is fascinating to watch right now is how they, and really all grocers, are spending tons of money on those fulfillment capabilities—direct to consumer, online grocery store pick up, etc…….much of that to catch up to Amazon. But since all of them are doing it, it may only be a “point of parity”……a huge investment with the risk of it being no differentiated than anyone else. I realize they can’t NOT do it for competitive reasons, but what else can they do to drive a meaningful difference and reason to shop there?

Regarding the StitchFix business model, MNB reader Will Rigby wrote:

I received a Stitch Fix gift card for my birthday this year, and just got my first fix last week.

When I received it, the box did not contain the return bag into which my returns would have gone. When I called them to ask for the bag, they sent me a prepaid shipping label, extended my return date, and gave me a $20 credit.

In all, I am thoroughly impressed with their customer service, and they won me over as a loyal user with that one interaction.

Not to mention the sweater and shirt I received were absolutely lovely.

Looking forward to my next fix!

And, responding to the story about the new mini-store opened by Starbucks in N YC last week, one MNB reader wrote:

That model is a replica of the “Luckin Coffee” business model in China. Which by the way has terrible coffee IMHO...for Luckin it’s about more about convenience. But have to give Starbucks some cred...they are always flexing their innovation muscle.

I got a lot of response to last week's FaceTime about my adventures at the DMNV and Social Security office, which ended with a worker at the latter suggesting that I was born before lamination was invented. (Not true. Lamination was invented in 1912. But a funny line, nonetheless. Check out my video here.)

Here are just a couple of emails…

One MNB reader responded:

Ha ha ha. I had a similar issue when I got my DL a year ago. I had to bring my birth certificate so I dug it out and went down to the DM. I had to wait half an hour, got to the Window and told the girl I wanted the new DL for flying ... the one with the star. She asked for my certificate and I gave it to her. She took one look at it and said it couldn’t be a copy. I showed her that it had the official stamp on it. She acted surprised and said she had to talk to her supervisor. The supervisor rejected it saying it couldn't be a copy. I told her that was official since it had the stamp on it. She did agree with that but said the writing was so faded that she couldn’t accept it. So she sent me to the local court house where another half hour is wasted. I get to the counter and the court gets me a copy! I told her DMV said a copy won’t work .... it she tells me it is the only official copy because of the stamp. I look at what she gives me a it looks EXACTLY like the one I have ... faded and all. If she assures me it will work. I go back to DMV, present the new document and the girl says I didn’t do what they told me to do. I said that is all I can get from the court. She has to go back to her supervisor. The supervisor comes out and starts to yell at me for trying to give them the same document I did before. So I showed her the first one. They even compared them side by side and the faded writing was the same. But It has the the stamp I keep telling them. I’m tying up the window for an hour arguing about the faded certificate being the only one I was ever going to get ! The supervisor finally huffs off saying to give me the DL. I’m sure she thinks I scammed her. You were born before laminate .... I just faded away.

From MNB reader Chris Breen:

Lol. I am 49. My Social Security card is laminated too. Thanks for the heads up. I am pretty sure it says on the back of my card "Do Not Laminate."
KC's View: