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    Published on: December 17, 2019

    by Michael Sansolo

    The value of simplicity has been extolled through the centuries by Shakespeare, Da Vinci and even weapons designers for the US military. (In fact, the acronym KISS or "Keep it simple, stupid," comes from the military.)

    Now as companies look for myriad ways to delight shoppers and somehow gain (or keep) competitive advantage, it pays to take a trip into the very recent past for a lesson in the power of simplicity.

    For starters, look no further than the palm of your hand, which right now is probably filled with the latest iPhone or Android device that has seemingly overnight become the most indispensable tool we have ever possessed. (Trust me, I am no different.)

    Hard as it may be to believe, but only 20 years ago there was a completely different devices that filled many palms and it didn’t come from Apple or Samsung. Rather it was the Palm Pilot, the one-time giant of personal digital assistants (PDAs, remember). And in many ways that now near-extinct device may perfectly exemplify how simplicity can produce greater happiness in its users than far more sophisticated and capable devices.

    Fast Company recently ran a tribute to the Palm Pilot that is worth reading, especially as we increasingly look for ways to use technology to enhance the customer experience. The lesson from the Palm Pilot is that customers are happiest when problems are being solved and their lives made simpler in the process.

    The Palm Pilot at its simplest allowed users to carry their calendars and address books in a simple, but elegant device that easily fit into pockets (one of the key goals of the Palm was that final point.) It certainly didn’t offer the countless applications that come with our smart phones, but then again we need to ask ourselves how much happier we are by having a constant tether to our phones, e-mail, texts, social media and more.

    The essence of the Fast Company article is about designing products and customer solutions that people love.

    Now obviously, there’s no easy parallel here to the modern store … except that there is.

    In attempting to wow customers stores frequently look for ways to add products, services, technology and more. But given the complexity of their lives, less can frequently be more. Consider Trader Joe’s, one of the most beloved retailers out there currently. TJ’s assortment is a fraction of most other stores and shoppers love that. It demonstrates that having 30 choices of spicy mustard isn’t always viewed as a positive. Sure you may get the perfect mustard, but is the upside really worth the journey?

    For some, yes. For many, no.

    Likewise, consider the success that McDonald’s and other fast food operators have had by essentially streamlining customer decisions into meal packages. No need to think about whether you want fries and a drink, just ask for the number 1, 2 or whatever.

    And there are countless other examples of simplicity becoming competitive advantage.

    You may not be designing a breakthrough technology that will rival the iPhone or even the Palm Pilot, but Fast Company argues that you need to think about simplification - and how to meet basic consumer needs rather than dazzle and possibly overwhelm with options, choices and more.

    Seal that relationship with a KISS. It may work out better that way.

    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: December 17, 2019

    by Kevin Coupe

    Want evidence of Amazon's increasing power?

    CNBC reports that Morgan Stanley estimates that Amazon Logistics, the company's in-house logistics operation, "will reach a volume of 6.5 billion packages per year by 2022, far exceeding its estimate for UPS at 5 billion packages per year and FedEx at 3.4 billion packages per year … Amazon is already delivering about half of its own packages in the U.S., according to a Morgan Stanley estimate on Thursday, and will soon pass both United Parcel Service and FedEx in total volume."


    Some more context: "The firm says Amazon Logistics is more focused than its competitors on densely populated areas. According to Morgan Stanley’s estimate, about 61% of Amazon Logistics’ package volumes are from suburban areas, 28% are from urban areas, and just 11% are from rural areas. That makes Amazon Logistics’ rural focus about half of its competitors, as the rest of the industry typically derives 20% of package volume from rural areas, the firm said."

    Now that's an Eye-Opener.
    KC's View:

    Published on: December 17, 2019

    Albertsons announced yesterday that it is expanding its partnership with mental health company Genomind "to offer patients genetic testing at more locations." The expansion more than doubles the number of pharmacies where Albertsons offers the service from 28 to 59.

    According to the announcement, "Specially trained pharmacists in all ACME pharmacies in Pennsylvania and select Albertsons pharmacies in Idaho can now offer Genomind Professional PGx Express – the most advanced and comprehensive genetic testing service to guide mental health medication management. Company pharmacists will also have access to G-DIG™, Genomind’s proprietary software system with updated information on how drugs may interact with patient genotypes as well as with other drugs."

    The goal of the program is to help identify "patient-specific genetic markers that can better inform mental health treatment decisions. The test results are bundled with a suite of services that enable access to care, improve patient outcomes, and reduce healthcare costs – all designed to foster a collaboration of care between the patient, prescriber, and pharmacist."

    The Genomind Professional PGx Express service is available by prescription only. The announcement says that it works this way: "Pharmacists who have observed a pattern of unsuccessful experiences with prescribed mental health medications can provide the patient with free educational materials on integrating Genomind Professional PGx Express into their treatment plans. With the patient’s permission, the pharmacist can coordinate with the patient’s healthcare provider to order the test and help administer the non-invasive cheek swab in a specially designated area of the ACME pharmacy. The pharmacist will then send the sample to Genomind’s lab. Within three days of receiving it – the fastest turnaround time in the industry – Genomind will provide the pharmacist and ordering clinician with a results report for variants from a 15- or 24-gene panel that can impact mental health treatment."
    KC's View:
    This strikes me as being a useful service to offer, especially at a time when anxiety and depression are enormous health issues for a lot of Americans. It seems possible that the availability of such a program at retail could help remove the stigma that mental health issues have for a lot of people.

    That said, I'm not entirely persuaded that the words "mental health" and "Express" belong in the same sentence. I'm also pretty sure that the words "mental health" and "pharmacist" belong in the same sentence … at least from my experience with retail pharmacists. I cannot imagine my pharmacist knowing me well enough to put my name with my face, much less being able to judge whether I have mental health problems that need to be addressed. (Which I probably do, but that's a different story.)

    Like I said, a good service … but one with a lot of issues to work out before it becomes really effective.

    Published on: December 17, 2019

    The Wall Street Journal has a story this morning about how some third-party sellers are looking for - and finding - alternatives to Amazon as they seek to fulfill consumer orders.

    The story uses Supply, a four-year-old specialty shaving company owned by Patrick Coddou, as an example: it started selling on Amazon's marketplace in 2016 and used Amazon's fulfillment service to pack and ship orders.

    Now, things have changed.

    "Three years later Mr. Coddou has pulled his products from Amazon," the story says, "citing fulfillment costs and seller fees that shaved his margins, among other issues. He moved the company’s online order fulfillment over to e-commerce technology company Shopify Inc., which this year began rolling out its own physical distribution service … Companies like Supply that are looking to reach customers and fulfill orders have many more options these days. Amazon’s dominance of digital retail sales has spawned a fast-growing ecosystem of startups and services aimed at matching different parts of Amazon’s sprawling network and at helping retailers and brands of all sizes meet consumer expectations set by the e-commerce heavyweight.

    "Taken together, the businesses are creating what amounts to a virtual logistics system in Amazon’s shadow for retailers racing to keep up with the sector’s leader. This is creating new competition for the online giant even as Amazon itself continues to upend traditional retail and distribution strategies."

    Coddou tells the Journal that “if you’re trying to build something, a brand, a relationship [with customers], Amazon’s not a good place … Before I took it off Amazon, they started advertising their Amazon razors on my page.”
    KC's View:
    It is interesting - though not entirely surprising - to see how Amazon is working to compete with its third-party sellers in some cases, conceding some sales to third-party sellers in other cases (which is why Marketplace sales are higher than Amazon's own retail sales at this point), while at the same time exercising more control over third-party sales when it can.

    The Wall Street Journal this morning reports that Amazon "is blocking its third-party sellers from using FedEx Corp.’s ground delivery network for Prime shipments, citing a decline in performance heading into the final stretch of the holiday shopping season … Amazon has stopped using FedEx for its own deliveries in the U.S., but third-party merchants had still been able to use FedEx."

    But Amazon realizes - correctly, in my view - that if you are shopping on Amazon, you're going to blame Amazon if fulfillment does not live up to expectations, even if you're buying on the Marketplace. It also realizes that it is the gorilla in the room, and so it can pretty much dictate terms, and can defend its positions by being customer-centric.

    I think it is a pretty good bet that Amazon isn't surprised by the cottage industry of companies that can compete with it in the logistics arena. If Amazon got big enough, that was inevitable. In some ways, all this competition probably will be a good thing, especially if there is more conversation in the regulatory world about potential antitrust challenges.

    Published on: December 17, 2019

    From NBC News:

    "America's food inspectors are warning that 'unsafe' pork is likely making it to consumers under a change in rules for meat inspection. That change is now set to roll out nationwide to plants that process more than 90 percent of the pork Americans eat."

    The story goes on: "In traditional plants, as many as seven federal inspectors work on the processing line, handling hog carcasses and checking for defects.

    "Under the new system, that number will be reduced to two or three federal inspectors who have more experience but who will have limited hands-on interaction with the carcasses.
    Instead, the plant's own employees will be checking and sorting the hog carcasses and letting the federal inspectors, called Consumer Safety Inspectors, check their work from a distance. There is no required federal training for those employees.

    "Finally, the federal limit on line speed — or the rate at which hog carcasses can be moved for processing and inspection — will be removed."

    NBC News reports that a pair of Food Safety and Inspection Service inspectors have filed "whistleblower disclosure forms with the Office of Special Counsel about their concerns," hoping to draw attention to what they believe is a shift that puts US consumers at risk.

    You can read the entire story here.

    Interestingly, the New York Times has a different pig story this morning, reporting that "a devastating disease spreading from China has wiped out roughly one-quarter of the world’s pigs, reshaping farming and hitting the diets and pocketbooks of consumers around the globe." Essentially, the story details how Chinese regulators did too little too late to address a serious issue.

    You can read the Times story here.
    KC's View:

    Published on: December 17, 2019

    Politico reports that as part of current Congressional negotiations on annual spending bills, it seems likely that included will be a provision that will raise the minimum age for buying tobacco products - including both cigarettes and e-cigarettes - to 21.

    According to the story, "The legislation significantly raising the age cap from the current age of 18 on cigarettes and e-cigarettes is increasingly likely to be included in the year-end spending deal, the result of support from a diverse coalition of lawmakers, according to four people familiar with the matter. While the deal has not been finalized, it is more than likely to be in the package, according to sources in both parties."

    The legislation is seen as bipartisan, and is supported, Politico writes, by "Democrats like Sens. Brian Schatz of Hawaii and Tim Kaine of Virginia as well as Senate Minority Whip Dick Durbin (D-Ill.); on the Republican side Senate Majority Leader Mitch McConnell (R-Ky.) supports it as does National Republican Senatorial Committee chairman Todd Young (R-Ind.) and Sen. Mitt Romney (R-Utah)."
    KC's View:
    It may surprise longtime MNB readers, who know how anti-tobacco I am, to learn that I am mildly conflicted by this legislation.

    To be clear, I think it is a good thing. On some level, I'd change the minimum age to 101 if I could, or ban this poison forever and completely. If this legislation stops just a few teenagers from getting addicted, it is a net positive.

    And, I think that there's no reason that the smoking age shouldn't be as high as the drinking age.

    But … on so many levels we treat people who turn 18 like adults, including allowing them to fight in the armed forces and having them treated that way in the criminal justice system. I guess I wonder why we have one age of adulthood for certain things and a different age of adulthood for others.

    As I say, though, I'm only mildly conflicted. I'm happy to live with this dissonance if it saves some lives.

    Published on: December 17, 2019

    USA Today has a story that identifies the nation's favorite supermarket chains, state-by-state, saying that its rankings are "based on data suggesting chain popularity compiled from Yelp and Google Trends … From Yelp, we determined the five supermarket chains with the most reviews in each state and compared their Google search frequency for a one-week period using Google Trends. The chain with the highest search frequency in each state was considered to be the most popular, and by extension the best according to grocery customers."

    Here they are, broken out, for our purposes, by company:

    • Albertsons: Idaho, Montana, Wyoming

    • BJ's Wholesale Club: Delaware

    • Costco: Hawaii

    • Food Lion (Ahold Delhaize): North Carolina

    • Fred Meyer (Kroger): Alaska, Oregon, Washington

    • Giant Food (Ahold Delhaize): Maryland

    • Hannaford (Ahold Delhaize): Maine, New Hampshire

    • Harris Teeter (Kroger): Virginia

    • H-E-B: Texas

    • Hornbacher's: North Dakota

    • Hy-Vee: Iowa, Kansas, Minnesota, Nebraska, South Dakota

    • Jewel-Osco (Albertsons): Illinois

    • Kroger: Indiana, Kentucky, Mississippi, Ohio, Tennessee, West Virginia

    • King Soopers (Kroger): Colorado

    • Market Basket: Massachusetts

    • Meijer: Michigan

    • Publix: Alabama, Florida, Georgia, South Carolina

    • Rouse's: Louisiana

    • Sam's Club: Arkansas, Oklahoma

    • Schnucks: Missouri

    • Shaw's (Albertsons): Vermont

    • ShopRite: New Jersey, Pennsylvania

    • Smith's Food & Drug (Kroger): Nevada, Utah

    • Sprouts: Arizona, New Mexico

    • Stop & Shop (Ahold Delhaize): Connecticut

    • Trader Joe's: California, New York

    • Whole Foods: Rhode Island

    • Woodman's: Wisconsin
    KC's View:
    This is an algorithm-based analysis, quantitative rather than qualitative, which accounts for the fact that companies like Wegmans are not listed here. Some of these companies are not a surprise - Publix's dominance in four southern states, for example, or Kroger's in a total of a dozen states or H-E-B's in Texas or Hy-Vee's in Iowa.

    I must admit that I'm a little surprised by Trader Joe's New York presence … I'm impressed that there are two states where Sprouts gets the highest ranking … and I'm a little skeptical that there are four states where membership warehouse clubs are ranked so high.

    I also look at this list and see a bunch of places where I'd guess that, if faced with new and tough competition, the dominant supermarket companies would lose significant ground. I hope they're not feeling complacent.

    Published on: December 17, 2019

    • The New York Times reports this morning that "Uber is in advanced discussions to sell its food-delivery business in India," as CEO Dara Khosrowshahi looks to get rid of money-losing businesses. Uber, the story says has to "prove to investors that the company can turn a profit. Investors have agitated both in public and behind the scenes for Uber to clean up its balance sheet since it went public earlier this year."

    The story says that Uber "is nearing a deal to sell its Uber Eats service in India to Zomato, an Indian food-delivery service." A deal could be worth as much as $400 million to Uber.
    KC's View:

    Published on: December 17, 2019

    Fox Business reports that Coca-Cola is getting into the subscription business, testing a new program called the Coca-Cola Insiders Club that will allow 1,000 "insiders" who sign up to "get the first taste of some 20-plus new beverages the company plans to release in early 2020."

    According to the story, "Starting in January, 'insiders' will receive monthly shipments of beverages, which can include anything from AHA flavored sparkling water to Coke Energy, for six months. The packages will also include other surprises, though the company did not specify what those are.

    "Shoppers have the option to pay for the limited-edition boxes for $10 per month or pre-pay for all six months and save $10 for a total of $50 upfront."

    McCrea O’Haire, digital experiences manager, Coca-Cola North America, is quoted as saying that "the Insiders Club will allow us to showcase the diversity of the drinks we offer and get some of our newest innovations into the hands of fans who want to be among the first to enjoy them."
    KC's View:

    Published on: December 17, 2019

    • The Wall Street Journal reports that "two years after eliminating the role of chief marketing officer in favor of a more powerful chief growth officer, Coca-Cola Co. is resurrecting the CMO post.

    "Francisco Crespo, who has overseen marketing and other duties as Coca-Cola’s first chief growth officer since 2017, will retire in 2020, the company said. Manolo Arroyo, the president of the company’s Asia Pacific Group, was named to take on the marketing portion of Mr. Crespo’s responsibilities under the resurrected title of CMO."

    CEO James Quincey said in an internal memo that the reversal occurred because the company "needs more emphasis on marketing to accelerate its vision."
    KC's View:

    Published on: December 17, 2019

    …will return.
    KC's View:

    Published on: December 17, 2019

    In Monday Night Football, the New Orleans Saints defeated the Indianapolis Colts 34-7.
    KC's View:

    Published on: December 17, 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: