business news in context, analysis with attitude

Published on: November 14, 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, I'm Kevin Coupe and this is FaceTime with the Content Guy.

I recorded this week's FaceTime in the Stamford, Connecticut, Apple Store, where Mrs. Content Guy and I went to trade in our old iPhones for new ones.

Now, to be honest, we didn't want to go to that Apple Store. Last couple of times I've been there it was kind of a mediocre experience, and I really hate the Stamford mall where it is located. Our plan was to drive right past Stamford and go down to Greenwich, where they have a newer store where the people seem friendlier.

But we got on I-95, and the traffic was terrible. Mrs. Content Guy had her heart set on a new iPhone, so we decided to give the Stamford Apple Store one more try.

And go figure. When we walked in, an employee named Jess immediately came up to talk with us, and she was terrific - knowledgeable, funny, interested and incredibly helpful. And quick - she was both effective and efficient. As I f recorded the FaceTime, our new phones were being updated. She was everything you could ask for from someone working in a retail environment.

And it made me think about how a great employee can really make a retail experience. It is so important, more important than I think many retailers even think.

In fact, I went out of my way to find the manager to tell him how she'd turned around the experience. And now, I've shared it with you.

That's what is on my mind and, as always, I want to hear what is on your mind.

Published on: November 14, 2019

by Kevin Coupe

The Los Angeles Times has a sobering piece saying that "in December, American consumers will return more than 1 million packages to e-commerce retailers each day." Returns, the story says, account "for 5 billion pounds of landfilled waste in the U.S. alone and an additional 15 million tons of carbon emitted into the atmosphere."

The problem, the Times writes, "is that consumers are returning more and more every year. In 2018, Americans sent back 10% of their purchases, valued at $369 billion, according to data and software firm Appriss, up from 8% two years earlier.

"Younger shoppers in particular are more inclined to treat online purchases as rentals, or to buy clothing to try on, then return what doesn’t fit or look good. It’s a global trend: In Sweden, return rates are as high as 60% for some products."

Yikes.

And then, here's the money line: "At a time when consumers and companies are otherwise rethinking their choices in light of climate change, e-commerce returns amount to a hidden environmental crisis."

Which is an excellent point.

E-commerce companies encourage people to think of buying online as being convenient, and speed and ease of returns is part of that. And certainly all those returns are good for the shipping business - FedEx and UPS and the US Postal Service no doubt make a lot of money by facilitating those returns.

But … if companies are going to be serious about addressing climate change - it was just a week ago that Walmart made a big deal about the fact that it intends to abide by its commitment to achieving the goals of the Paris Climate Accord (and good for them for doing so) - maybe they have to think about how they address this subject.

I'm not smart enough to know how to do it. But I do believe that problems such as climate change have to be addressed holistically - you can't be committed to dealing with the issue but only deal with the part of it that is most convenient.

Leadership is called for. It'd be an Eye-Opener.

Published on: November 14, 2019

In Canada, the Globe and Mail reports that Loblaw is working to improve its e-commerce offerings by "converting 12,000 square feet of "less-productive space" in a Great Canadian Superstore at Dufferin and Steeles in Toronto, to test out an online order-fulfillment area there for its PC Express click-and-collect grocery service. The area will use automation to help staff fill orders faster. In the future, such a location could potentially act as a 'hub' to help other stores fulfill orders."

The story points out that "the pilot project is a partnership with Takeoff Technologies, which builds what it calls 'micro fulfillment centres' that fit in smaller spaces rather than large warehouses. Unlike the usual -click-and-collect system where staff fill orders by shopping the store, the system delivers items to a staff member in the mini-warehouse who then puts orders together more quickly (or combines the automated and the manual approach)."

Published on: November 14, 2019

Alibaba announced that this year's Singles' Day shopping promotion generated the equivalent of $38.4 billion in sales.

The New York Times reports that this was a record number, 26 percent more than was generated on Singles' Day a year ago - though this was the weakest year-over-year growth since Alibaba launched the Singles' Day promotion in 2009.

The Times also notes that Singles' Day dwarfs "Cyber Monday in the United States which took in $7.9 billion last year." It also is "more than U.S. rival Amazon.com Inc's haul last quarter from online store sales."

Published on: November 14, 2019

Fast Company has a fascinating story about the folks who are trying to engineer a resurgence for Toys R Us are looking for guidance and assistance from an unexpected source - former Toys R Us employees.

Go figure: "Listening to workers is actually a smart way to run the business."

Here's how the story explains what is going on:

"Today, a trio of former Toys R Us employees will meet formally for the first time with top executives as part of a 'mirror board' - a body meant to have access to key corporate information and provide candid advice, just as the regular board of directors does. Labor advocates say that the model could prove to be an effective means of giving workers more voice and power during an era when unions don’t have nearly the membership and clout they once did."

You can read the entire story here.

Published on: November 14, 2019

The world's largest Starbucks is scheduled to open to the public tomorrow in Chicago.

Located at the corner of Michigan Avenue and Erie St. on the "Magnificent Mile" in the old Crate & Barrel flagship building, the 35,000 square foot Starbucks Roastery has five floors, three coffee bars, a cocktail bar and an artisan bakery/cafe. One of the coffee bars offers liquid nitrogen gelato; it is the only Roastery to have that product.

CNBC reports that "the Chicago location is the company’s sixth roastery. Other locations include Tokyo, New York and Milan. Each roastery is much larger than a typical cafe and is designed to pay homage to the culture and history of the city.

"Starbucks spokeswoman Maggie Jantzen said that the average Roastery customers spends three to four times more money than at a typical Starbucks cafe. Roasteries, on average, can see more than 8,000 visitors per day."

The story goes on: "According to Starbucks, the Chicago Roastery also has the first curved escalator in the Midwest. Customers will have a 360-degree view of the roasting and brewing process happening on the first floor as the escalator carries them around the roastery’s cask to the second floor."

Published on: November 14, 2019

• Benzinga reports that Amazon has issued a directive to merchants who sell on its site but handle their own fulfillment - if they ship via the US Postal Service (USPS) one-to-three day delivery service, they have to buy the postage from Amazon.

According to the story, consultants say that "Amazon stands to benefit financially through 'postal arbitrage,' in which it leverages the difference between the prices it charges and the low rates it receives through its Negotiated Service Agreement (NSA) that high-volume users strike with USPS. In addition, Amazon's NSA likely includes 'tiered incentives' that promise even deeper discounts for the e-tailer in return for more volumes tendered to USPS."

The Benzinga story makes the point that Amazon may be hunting for bigger game than just commissions on postage, arguing that "the move is part of Amazon's effort to force merchants into the e-tailer's Fulfillment by Amazon (FBA) network, in which Amazon manages customers' supply chains for a fee.

"The self-fulfillment service, Seller Fulfilled Prime (SFP), allows merchants to choose their own logistics partners and retain 'Prime Merchant' status as long as they hit one- to two-day delivery targets 98.5% of the time. Failure to do so can cause a merchant to forfeit the coveted designation, which can result in hundreds of thousands or even millions of dollars in lost sales. Consumers are incentivized to buy Prime-labeled products because they pay monthly or annual fees for Amazon's Prime service and want to get the most out of it. They are also attracted by the service's money-back guarantee if delivery commitments aren't met. Merchants are not penalized for late deliveries of FBA-fulfilled goods."

Published on: November 14, 2019

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

• CNN has a facile response to the question, how are some regional grocers managing to thrive in such a competitive environment.

Its story argues that the likes of Wegmans, H-E-B, Publix and Hy-Vee "are proving pretty resilient. These grocers have opened new stores and grown sales in the cutthroat industry … The grocers have thrived because they have mastered their local markets. They are nimble and often able to respond more quickly to shifting consumer tastes and make changes in stores than national chains with layers of management."

In addition to having strong brand equity and an ability to communicate that message to shoppers, these grocers also "have expanded carefully and avoided taking on debt, issues that have plagued many retail peers. All are privately held companies and do not have to answer to Wall Street every quarter."

See? Wasn't that easy?

Published on: November 14, 2019

• Grocery Outlet announced that it has hired Heather Mayo, formerly the chief merchandising officer at Boxed and before that spending time at both Walmart's Sam's Club and BJ's Wholesale Club, to be its EVP for the company’s East region.

"“Heather brings 23 years of experience in the retail club channel and will lead our efforts to expand our existing Mid-Atlantic store base and future expansion. We look forward to leveraging her operational and merchandising expertise as we develop our long-term plans for this market,” said MacGregor Read, vice chairman of Grocery Outlet.


• Subway, the world's largest fast food chain, announced that it has hired John Chidsey, the former chairman/CEO of Burger King Holdings, to be its new CEO.

The permanent CEO job at Subway has been vacant since June 2018, when Suzanne Greco retired. Trevor Haynes, who has been the interim CEO, will continue in his day job as president of North America operations.

Published on: November 14, 2019

…will return.

Published on: November 14, 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.