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    Published on: November 12, 2019

    by Michael Sansolo

    If there’s a common theme that runs through MNB, it’s our belief that creativity in addressing all manner of consumer needs is the path to success. (That and our reliance of the wisdom of "Star Trek," of course.)

    With that in mind it’s time we consider a growing societal problem that stores are actually incredibly well positioned to address and might find as a fabulous competitive weapon for the new age.


    As if we didn’t have enough societal ills to confront - opioids, obesity or political polarization are just the beginning - we are increasingly facing a new one. Despite (or maybe because of) the fact that we are living in the age of social media with endless lists of friends whom we barely know, loneliness is increasingly recognized as a major societal ill. The Health Resources and Services Administration recently reported that loneliness is as harmful as smoking 15 cigarettes daily and that 40 percent of Americans say their social relationships lack meaning and 20 percent feel socially isolated.

    The problem spreads across demographics from the young (who are less likely than ever to marry) to the elderly. Those numbers may explain why a Google search for “loneliness epidemic” turns up nearly 3 million results.

    But whenever there is a problem, there is an opportunity to solve it and that’s the business hook - because it means that customer connections can loom larger than ever.

    We know that shoppers are able to avoid stores by getting everything they need on line, whenever and wherever they want it. In many ways, this could be contributing to the loneliness epidemic. And it is why retailers need to think about giving people a reason to come into their stores and finding ways to create valuable and enduring connections.

    We talk a lot about the need to put some experience into the everyday, whether it’s the food piazza style of a Wegmans, Whole Foods or Dorothy Lane Market, the joyous style of a Stew Leonard’s or Jungle Jim’s or the focus on fresh of countless other retailers and farmer’s markets. These are just some examples of retailers who go above and beyond to connect with their shoppers; not everybody can do what they do, but that leaves a lot of room to maker connections.

    It may require some additional training of staff to ensure they all understand the incredible impact a kind word and connection can make in every shopper’s day. We’re not talking rocket science or billion dollar investments. We’re talking the impact of saying “hello,” “thanks” and many other simple phrases.

    I remember some 30 years ago, when we Boomers were tiring of the dating scene, supermarkets suddenly became the cool place to meet other singles. Singles’ shopping events became so popular they were widely covered in all media (including Cosmopolitan magazine, if I recall correctly) and, some of those same promotions can be found taking place today.

    Perhaps it’s time for more creative attempts to build community events around shopping, recipes, cooking, eating and conversation. Doing so might drag even the most reluctant shopper away from that Amazon Echo and back into a store if it provides some moments of happiness and connection.

    That might lead to sales and profits, which will make another group very happy.

    Michael Sansolo can be reached via email at . 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: November 12, 2019

    by Kevin Coupe

    So my daughter took her Mini to the dealership the other morning for its annual checkup. (I hope when I'm old she takes as good care of me as she takes of that car, or her dog.) Early in the afternoon, she got an email from the dealership with a video attached, in which the young man working in the service department gave her a guided tour of her car's various mechanics, explaining what had been found and what had been done.

    Her response: "Wow!" When she told me about it, my reaction was exactly the same, because this struck me as both an example of great customer service and an example of how a business can create connections with the customer. (Y'know, kind of like what Michael was talking about in his column above.)

    You can see the video above left; (I've edited it a little bit in the beginning and end so we don't show the young man's face.)

    I've never seen this done in the past, and in fact the people in the Mini dealership's service department told my daughter that this was a new offering. But when you think about it, this kind of offering is a perfect use of basic, accessible technology to communicate an old-fashioned service ethic.

    If I were a retailer, I'd be thinking about how I can adapt the idea to my business, and maybe even elicit a few "Wows" from my customers.

    Could be an Eye-Opener.

    KC's View:

    Published on: November 12, 2019

    Bloomberg reports that private equity group KKR has formally approached Walgreens Boots Alliance Inc. about a possible takeover of the chain drug retailing giant.

    The cost of taking the company private has not been disclosed, but it is known that Walgreens Boots has a market value of about $56 billion and $16.8 billion of debt. A leveraged buyout almost certainly would be the largest in history.

    It is far from being a done deal. Bloomberg writes that it is "unclear how feasible the transaction would be, given the need for large amounts of financing, and Walgreens Boots and KKR could decide against pursuing a deal."

    The Bloomberg story says that "Walgreens Boots, led by Chief Executive Officer Stefano Pessina, has been reviewing a potential deal with a financial adviser to take the company private amid buyout interest … Some buyout firms looked but decided against pursuing such a big deal."

    The story says there is no firm timetable for any sort of agreement.
    KC's View:
    While the Bloomberg story suggests that "a buyout would give Walgreens Boots time to adapt to a fast-changing retail landscape, free from the quarter-by-quarter demands of public shareholders," but there is also the other possibility - which is that the company will be so laden with debt that it won't have the resources to make the investments that competitors like CVS, Walmart and Amazon are making. They'll be trying to reinvent health care, and Walgreen will be trying to cover its debt and vigorish.

    Published on: November 12, 2019

    Amazon got a little more specific about its future grocery store plans: it plans to "open a new type of grocery store in Los Angeles next year, another step in the e-commerce giant’s multi-pronged effort to capture a larger piece of the massive U.S. grocery business."

    But - the new stores won't have Amazon Go-style self-checkout systems, according to the company, which is not saying what the stores will have.

    The first store, it confirmed, will open in Woodland Hills, and will "be distinct from Whole Foods Market Inc., the higher-end chain Amazon bought in 2017 that specializes in natural and organic groceries." The Wall Street Journal reported recently that Amazon has secured more than 12 leases in the L.A. area, as well as in Chicago and Philadelphia.

    The Times writes that "analysts said that although Amazon, as usual, was keeping it strategic aims close to the vest, the company undoubtedly is learning how it can bring innovation to grocery shopping just as it did with other consumer goods."

    Burt Flickinger III of the Strategic Resource Group tells the Seattle Times that he believes that Amazon is poised to “turn the Whole Foods model inside out by going from the highest-priced retailer in the modern world to the lowest-priced for grocery food retail."

    He tells the Times that he "expects Amazon to open 10 to 12 grocery stores in 2020 before pursuing a regional and then national expansion in the early part of the next decade that could eventually surpass 1,000 stores. By his firm’s estimates, Amazon’s share of the $1.4 trillion U.S. food retail business could grow from less than 2% now to as much as 10% by the end of the next decade."
    KC's View:
    I have no doubt of Amazon's ambitions. I have even less doubt of its ability to achieve them.

    It is possible that it will not be applying Go-style technology to a larger format because the tech just isn't ready yet. Or, it is possible that it thinks it just doesn't make sense.

    However, I still think that Amazon will be applying one or more of its secret sauces - Prime, Subscribe & Save, or something else - to the new format. It'd be a shame if it didn't.

    Published on: November 12, 2019

    Forbes reports that "select 7-Eleven convenience stores in the state of Colorado will feature CBD-dispensing, high-tech vending machines produced by greenbox Robotics, the industrial automation company behind widely celebrated CBD and cannabis-dispensing robots found in Come Back Daily and Erba Collective, among other very cool places."

    The story notes that "greenbox robots use a sophisticated age and ID verification system, to ensure anyone acquiring products out of their boxes is legally allowed to do so."

    And, Forbes goes on: "7-Eleven now joins the list of big US retailers offering CBD products, alongside CVS, Walgreens, Urban Outfitters, and a few others listed  in this Forbes article. However, 7-Eleven is the first to offer an automated service and curated selection. Even more interestingly, greenbox will seek to feature select small, up-and-coming CBD brands that might otherwise not be able to hit the shelves at retailers of such size."
    KC's View:
    I'm so uncool that I had to look up what Come Back Daily and the Erba Collective are. Thank goodness for Google.

    Published on: November 12, 2019

    Fast Company has a story about how a French design firm Studio NAB has come up with an idea for what to use with big box stores' parking lots. It believes that some of the "space could be reimagined as an urban farm, with a little room left at the side for charging electric cars from onsite solar panels."

    The belief is that "the idea might be appealing to retailers - losing business to Amazon and other online retailers - that want to give customers more reasons to visit … People who might otherwise avoid Walmart or Target might be drawn to the gardens."

    Interesting idea … and you can read more about it here.
    KC's View:

    Published on: November 12, 2019

    TechCrunch reports that "Uber will become an ad platform, selling space inside its Eats app to restaurants hoping to lure in more food delivery orders … Selling ads could help it improve margins on Eats, where it only takes 10.7% of gross bookings as adjusted net revenue because it pays out so much to restaurants and drivers … The fresh opportunity in ads comes at a critical time when Uber is desperate to show its future potential in the face of a sagging share price that closed at $28.02 yesterday, down 40% from a high of $46.38 in June."

    The story notes that Uber has a role model: "Amazon successfully navigated a similar expansion from marketplace to ad platform; eMarketer expects Amazon’s U.S. ads business will grow 33% this year to reach $9.85 billion, and claim 7.6% of the total U.S. ad market, which makes it the biggest search ad player behind Google."

    Of course, TechCrunch adds, "Uber could use any revenue it can get. This quarter the company lost $1 billion, with $316 million of that loss coming from Eats. But Eats’ revenue grew 64% year-over-year, showing it’s increasingly popular, and could command enough user attention to make advertising lucrative."
    KC's View:
    Uber may have another problem to deal with. Last weekend, its CEO, Dara Khosrowshahi, did an interview on "Axios on HBO" in which he referred to the murder of journalist Jamal Khashoggi by the Saudi government as "a mistake" that is comparable to Uber's self-driving accident in which a woman died. Needless to say, there was a lot of coverage of the statement, forcing him to backtrack, saying, ""There's no forgiving or forgetting what happened to Jamal Khashoggi & I was wrong to call it a 'mistake' … I said something in the moment I don't believe. Our investors have long known my views here & I'm sorry I wasn’t as clear on Axios."

    The reason the question was being asked is that Saudi Arabia is Uber's fifth-largest shareholder, with a representative on the company's board of directors.

    Published on: November 12, 2019

    • UK retailer Tesco is primed to get into the subscription business.

    Pymnts reports that as part of its Clubcard loyalty program, "for £7.99 a month, customers will have access to 10 percent off two big shops up to £200 each; 10 percent off customers’ favorite Tesco brands at all times; double data on a monthly contract for new and existing Tesco Mobile customers; and exclusive access to apply for a Tesco Bank credit card with no foreign exchange fees. The company says a customer’s potential savings add up to more than £400 a year."

    The story notes that "the move is a page out of the Amazon playbook, as the eCommerce giant has seen great success with its own subscription service, Amazon Prime. Earlier this year, a study revealed that more than half (51.3 percent) of U.S. households will have Amazon Prime memberships this year, which would equal 63.9 million households in total."

    Vogue Business has a story about what "fashion rental startup" LeTote plans to do with Lord & Taylor, now that it has acquired the 38-store retailer for $100 million.

    The story says: "That the US’s oldest department store could be scooped up by a seven-year-old e-commerce startup captured the current volatile state of the retail industry.
    The companies are not an obvious match. Le Tote’s online-only subscription model lets customers rent clothing and accessories from roughly 180 mid- to high-end and private-label brands up to twice a month, starting at $79, with new merchandise added on a monthly cadence. Lord & Taylor’s traditional merchandising model operates on seasonal buys; at the time of the acquisition, the retailer stocked between 400 and 500 brands, including more than 100 proprietary labels."

    The goal is to reach profitability in the next 12 months, but the story says that this "will be a considerable challenge. Lord & Taylor did $1.4 billion in sales last year, but lost $114 million. Le Tote is not yet profitable, and would not disclose how much debt it was taking on as a result of the acquisition."

    Here's step one: "Le Tote will reformat Lord & Taylor’s 38 bricks-and-mortar stores and migrate its systems onto a unified technology platform … Over the next nine months, both companies’ inventories will be unified under a single backend system, which will allow customers to rent or purchase all merchandise. All 38 Lord & Taylor stores will remain open, but their format will change over time to emphasise rent and subscribe options, including drop-off and pick-up points for rentals."

    • The Wall Street Journal this morning reports that Anheuser-Busch InBev "has agreed to buy out the remaining shares of Craft Brew Alliance Inc. that it doesn’t own, placing the value of the Portland, Ore.-based company at roughly $321 million." The move gives A-B beer brands that include Kona Brewing Co., Omission Brewing Co., Redhook Brewery and Cisco Brewers.

    Business Insider reports that Burger King is happy enough with the performance of its plant-based Impossible Whopper that it will introduce three more Impossible burgers to its menu - the Impossible Whopper Jr., the Impossible Burger, and the Impossible Cheeseburger.

    The new burgers will be tested at some 180 locations around the country.
    KC's View:

    Published on: November 12, 2019

    …will return.
    KC's View:

    Published on: November 12, 2019

    In Monday Night Football, the Seattle Seahawks scored a 27-24 overtime defeat of the San Francisco 49ers.
    KC's View:
    Responding to what she saw as a major lapse in yesterday's Sports Desk coverage, Stephanie Steiner sent me the following email…

    The Seattle Sounders are the MLS Cup Champions, beating Toronto 3-1.

    This was the third trip to the Championship for each team, and each time they have played each other. Seattle leads the matchup, 2-1.

    CenturyLink Field’s all-time attendance record was broken. Seismic activity was recorded. Seattle fans went home happy. Head Coach, and son of Seattle himself, Brian Schmetzer had some words on the matter here.

    I have been crying since the second goal.  Maybe someone was chopping onions in the stadium.

    Mea culpa, mea culpa, mea maxima culpa.

    Published on: November 12, 2019

    Past Retail Tomorrow podcasts have focused on how technology can have an impact on business models and people's lives. In this edition, however, we drill down to talk about how technology affected one life … and, in fact, makes living a best life possible.

    Our guest: Heidi Dohse, senior program manager in Google's Cloud - Health and Life Sciences division. Dohse's personal and professional story makes for a compelling narrative that is at once provocative and inspiring.

    Hosted by 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.

    KC's View: