business news in context, analysis with attitude

Published on: November 8, 2019

by Kevin Coupe

Airbnb has been having a tough time lately, suffering the potential of a strong erosion of consumer trust after Vice posted an exposé charging that the travel site was implicated in "a nationwide web of deception that appeared to span eight cities and nearly 100 property listings — an undetected scam created by some person or organization that had figured out just how easy it is to exploit Airbnb’s poorly written rules.”

And then, there was a shooting at an short-term Airbnb "mansion house" in Orinda, California, during a Halloween party that left five people dead.

So much for all publicity being good publicity.

The Washington Post reports that CEO Brian Chesky has reacted to the events by promising that "the home-renting platform would start verifying all 7 million listings, a process expected to stretch into late 2020. By Dec. 15 of next year, he wrote, a review of every home and host on Airbnb will be complete, 'with the objective of 100 percent verification'."

In an email to employees, Chesky wrote, "“We’re going to make sure that we can stand behind every single listing, every single host to make sure that every single listing is accurate. The information’s accurate, the photos are what you say they are, the addresses are accurate, they meet minimum standards, they meet basic safety protocol and the host is who they say they are."

And, he added, "I think many of us in this industry … are going from a hands-off model, where the Internet’s an immune system, to realizing that’s not really enough, that we have to take more responsibility for the stuff on our platform."

Gee. Y'think?

It is a lot more amazing to me when these companies delude themselves into thinking that they don't have responsibility for the customer experience, that somehow outsourcing gives them plausible deniability. Which is nonsense, of course.

Marketers - whether at the retailer or supplier level - need to not just accept this fact, but embrace it: You are responsible for what you sell.

Even if you're not, you are. Because customers are going to make you responsible. And it shouldn't take the killing of five people or the revelation of a scam to create this awareness.

My Eye-Opening conclusion: Good for Airbnb for taking up the challenge, even though this should've been baked in from the beginning. It - and every other marketer - need to understand that this also is an enormous opportunity.

Published on: November 8, 2019

Kroger said this week that it is launching a new Auto Buying Program, developed in partnership with digital automotive marketplace TrueCar.

The announcement says that the program "provides comprehensive price context as well as upfront guaranteed savings off the manufacturer’s suggested retail price (MSRP) on new vehicles, and discounts on used vehicles.

"Kroger customers will have access to more than 16,500 TrueCar Certified Dealers. They will be able to see what others in their area paid for the new car they want based on recent vehicle transactions, and will be able to access machine-learning powered price ratings on used vehicle listings. These data and tools will empower Kroger customers to assess price competitiveness on their next vehicle purchase."

In addition, the company said, "Customers who purchase a vehicle through the Kroger Auto Buying Program will be rewarded with a free Fuel VIP membership. This will allow shoppers to earn 1 extra fuel point for nearly every 1 dollar spent, doubling the money that they can save at the pump."

Published on: November 8, 2019

i>Fortune is out with its "best places to work in retail" list, compiled in conjunction with Great Place to Work, and concluding - probably no surprise to anyone - that Wegmans is at the top of the list, followed by Publix Super Markets, CarMax, REI, and Nugget Market.

Rounding out the top 15 retailers are Sheetz, Custom Ink, Patagonia, Cumberland Farms, Burlington Stores, Foot Locker, Wayfair, Altar'd State, Old Navy and The Container Store.

In its story, Fortune writes: "To determine the 2019 Best Workplaces in Retail, Great Place to Work analyzed confidential survey feedback representing nearly 700,000 employees working in retail in the United States. Employees responded to over 60 survey questions describing the extent to which their organization creates a 'Great Place to Work For All' - a workplace culture in which employees can reach their full potential, no matter who they are or what they do for the organization.

"The retail industry overall continues to undergo disruptions related to advancing technology and changing consumer priorities. On the one hand, retailers feel pressure to match the convenience and customized experienced offered by Amazon.com and other shopping websites. Retailers also are responding to consumer desires to do business with stores that are sustainable - a term that not only includes positive treatment of the environment, but of workers as well. And many customers are seeking out shops that provide the counter to a faceless transaction - a deeply human connection with sales clerks and other customer representatives."

Published on: November 8, 2019

Bloomberg has a story about how the UK "offers a case study in the troubles facing retail worldwide, and the collapse this week of the U.K. arm of baby-products chain Mothercare Plc is just the latest example. With fast-growing online rivals like Boohoo Group Plc and Amazon.com Inc. drawing shoppers, traditional chains were already struggling before a weaker pound began squeezing living standards and crimping sales further."

Among the examples cited by Bloomberg…

• Next, a clothing chain, which not only has embraced e-commerce but also incremental measures "such as opening combined clothing and home stores, and selling third-party brands like Levi’s and Gucci. This year Next installed Amazon lockers in hundreds of locations for customers to pick up deliveries, hoping they’ll browse while inside. Next has a 15-year plan to reduce rents and stores gradually to drive profit, rather than resorting to the drastic measures that have forced other chains to fire thousands."

CEO Simon Wolfson explains his strategy this way: "The thing about retail is, it isn’t a business where you need to take big decisions. You take small decisions, try things and then maximize the opportunities they present.”

• Primark, a discount clothing chain that doesn't have an e-commerce presence (its prices are too low to justify online sales, it says) but continues to grow sales and open new stores. "A main advantage is knowing the customer well," Bloomberg writes. "Store managers select products on their computers each morning and determine how much they need for the next day. It’s the same model that Inditex SA’s Zara chain follows and allows for a nimbler response to trends."

Finance Director Finance Director John Bason puts it this way: "We encourage customer intimacy. Having an eye for the hottest trends is vital in the buying department, and that is encouraged."

• Greggs: "Since opening its first shop in 1951, Greggs Plc has stayed true to its mission: to make cheap pastries," Bloomberg writes. "It’s been growing steadily, but business boomed this year after the bakery chain launched a vegan sausage roll that became a hit on social media. First-half sales rose almost 15%, and Greggs shares have climbed 41% in 2019.

"Like online-delivery services, Greggs is benefiting from changing eating habits as time-pressed Britons cook less and grab food on the go. Greggs has been transforming itself for the last six years into a takeout business focused on airports, train stations and business areas after previously relying on the high street -- the British term for the main shopping district. It’s also partnered with Just Eat Plc and Deliveroo, and extended a 'click & collect' pilot to seven U.K. cities."

Published on: November 8, 2019

Axios reports that the federal Centers for Disease Control and Prevention (CDC) is now saying that "39 people have died from a lung injury associated with e-cigarette use in 24 states."

There is some new information: "Among 19 patients who died, 84% reported use of THC-containing products, according to a new report out in late October. The CDC maintains no single e-cigarette product or compound has been linked to the pulmonary illnesses … 37% of the 19 who died reported use of nicotine-containing products … 63% reported exclusive use of THC-containing products … 16% reported exclusive use of nicotine-containing products."

Axios describes the big picture this way: "The CDC reported 2,051 confirmed and probable cases of severe respiratory illnesses as of Nov. 5 among those who vaped nicotine or cannabis products in 49 states, Washington, D.C., and a U.S. territory."

If there is a silver lining, it may be this: "The number of reported cases each week has slowed."

Published on: November 8, 2019

Fast Company has an excellent story about how disruptive yogurt manufacturer Chobani has invested in "like-minded but smaller food startups with $25,000 in equity-free funding and the coaching necessary to grow to the next level," and has expanded on the original program by broadening its strategy.

Next month, the story says, Chobani will use "launch its first incubator class for veterans … Chobani’s veteran class is smaller than its previous incubators because many of the startups are so early-stage that they’ll need more specific attention."

And, because "the yogurt maker also knows there’s a lot it can’t understand about the veteran experience," it has "designed this program in tandem with the Institute for Veterans and Military Families (IVMF) at Syracuse University, which will continue to offer participants access to its own entrepreneurship programming, support network, and boot camps around topics such as how to finance your business."

Good piece, and you can read it here.

Published on: November 8, 2019

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

• Southeastern Grocers announced this week that it is expanding its e-commerce offerings to Winn-Dixie stores in Louisiana, in communities that include Baton Rouge, Covington, Mandeville, New Orleans and Slidell.

Local press reports note that this move will allow Winn-Dixie to compete more effectively with other grocers that offer grocery delivery, including Rouses, Alexander's Highland Market, and Target.

The good news for Winn-Dixie is that it is offering e-commerce. The questionable part of the decision is allowing Instacart to power the offering, which is akin to not just allowing the fox into the henhouse, but offering him a seat, a knife and fork, and maybe, in this case, a nice Abita Turbodog.

Published on: November 8, 2019

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

• The Wall Street Journal has a story about how former Uber CEO Travis Kalanick is building his CloudKitchens business, "buying up cheap properties across the U.S. and in India, China, the U.K. and elsewhere. The hope is that their proximity to densely populated areas will make them good candidates for commissary kitchens that can provide food exclusively for delivery, or even miniwarehouses for products people will pay to have delivered quickly."

This isn't an entirely new story; MNB reported on it here. But the story also makes the point that Kalanick has enveloped the business in a veil of secrecy, to the point that he "forbids employees to list their affiliation in LinkedIn profiles." All of which points to the possibility of a big reveal of some kind down the road.

Also, "Kalanick isn’t the only one chasing the opportunity. Other companies building ghost kitchens include Reef Technology, which has raised more money than CloudKitchens, from investors including SoftBank Group Corp. ’s Vision Fund, and Kitchen United, backed by Alphabet Inc. ’s venture arm GV."


• USA Today reports that "Coca-Cola North America will debut AHA in March, a sparkling water brand that will mix flavors like strawberry and cucumber and even pop in a little caffeine in two of the line's flavor combinations … At a time when consumers are increasingly looking for healthier alternatives to sugary soft drinks, AHA won't have calories or sodium. But its citrus and green tea, and black cherry and coffee flavor combinations will contain 30 mg of caffeine."

The story notes that "the flavored seltzers will be the newest entrant in a crowded category that includes La Croix and PepsiCo's Bubly. AHA is Coca-Cola North America's first significant brand debut since its Gold Peak tea launched in 2006."


• The Wall Street Journal reports that Transformco, the holding company that owns Sears and Kmart, said yesterday that it "will shut 96 more Sears or Kmart locations by February, as the country’s once dominant department store chain disappears from most American malls.

"Following the closures, there will be just 182 Sears or Kmart stores in operation, down from 425 locations as of February. Just five years ago, the company still had nearly 2,000 locations. Both Sears and Kmart have been gutted by falling sales, as people shop online or at rivals like Walmart Inc."

The Journal writes that "the continued shrinking of Sears and Kmart is the latest setback for financier Eddie Lampert, who had controlled the retailers for more than a decade and steered them into bankruptcy protection in October 2018," and then bought the company's stores out of bankruptcy.

Steered into bankruptcy protection. And then, apparently, right into the shoals of reality.

Published on: November 8, 2019

Emerging technologies in the health and wellness segment are empowering consumers who more and more are invested in self-care … which can best be defined as a cultural trend keyed to people who want to feel good, look good, live longer and live better. In this new Retail Tomorrow podcast, recorded in front of a live audience at the recent GMDC Selfcare Summit, we talk about the technologies and trends that we heard about there, provide insights into how consumers will interact with them, and offer guidance to companies looking to invest in this burgeoning segment.

Our guests for this podcast are members of the regular Retail Tomorrow podcast family:

• Tom Furphy, CEO and Managing Director of Consumer Equity Partners.

• Nancy Giordano, a strategic futurist who specializes in the post-digital world.

• Sterling Hawkins, co-founder of the Center for Advancing Retail & Technology.

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 brought to you by GMDC, the Global Market Development Center.

Pictured, below, from left: Kevin Coupe, Nancy Giordano, Tom Furphy, Sterling Hawkins

Published on: November 8, 2019

In Thursday Night Football, the Oakland Raiders defeated the LA Chargers 26-24.

Published on: November 8, 2019

Last weekend, I did something I've always wanted to do … did a vertical wine tasting with a bunch of friends. It was great fun, enlightening, and I recommend it.

The wine was one of my favorites - Roads End, from Carlton Cellars, in Oregon's Willamette Valley. (We've always been big fans of Carlton Cellars, which is a small-production winery with limited distribution outside the Pacific Northwest; we belong to the wine club to make sure we always have some on hand. Plus, we love owners Dave Grooters and Robin Russell.)

Roads End is the best of several pinot noirs that Carlton Cellars makes, and so we decided to line up five vintages of Roads End - the 2012, 2013, 2014, 2015, and 2016. All from the same vineyard, grown by the same people - but, of course, grown with different levels of rain and sun and heat and cold. And so, the wines inevitably were going to be different. (I had bottles of all of them, except for the 2013, down in the wine cellar … er, the basement that has wine racks … but Brandon Harlacher, Carlton's director of sales and marketing, was kind enough to ship one out to us.)

We had a number of friends over, and they were as fascinated and delighted by this experiment as we were. There were some variations in taste, as one might expect, but I think it is fair to say that the 2015 largely was ranked best, with the 2012 coming in second. I ended up drinking more of the 2013 … there was something about it I really liked … it seemed a little more delicate than the others, which seemed more robust to me. Plus, I knew how much trouble Brandon had gone to, and that kind of stuff matters to me.

I haven't had the chance to do so yet, but I'm anxious to see if our assessments of the various vintages match up with how Dave and Robin and Brandon would rate them. They're wonderful winemakers, and I recommend you check out Carlton Cellars online.

But here's my suggestion. If you've never done a vertical tasting, try it. Get your local wine merchant to help you line up an appropriate wine and get you several vintages, and see what happens. It is great fun, and wonderfully enlightening.

Plus, you get to drink great wine.



That’s it for this week. Have a great weekend.

Back Monday.

Slàinte!

Published on: November 8, 2019

…will return.