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    Published on: January 9, 2020

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    Published on: January 9, 2020

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    Published on: January 9, 2020


    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, Kevin Coupe here, and this is FaceTime with the Content Guy.

    It seems obvious to say that shoppers have a vastly expanded range of options when it comes to acquiring product, and one of the iterations that I have been most impressed with is StitchFix, which essentially is a clothing subscription service.

    Here's how it works. You go on the StitchFix site and answer a series of questions about your size and clothing preferences, and then sign up for regular deliveries of clothing based on the profile the company is building. The idea is that with every new shipment, the profile will get more nuanced and so the selection will become more and more, you'll excuse the expression, tailored your needs and taste.

    Each shipment has five articles of clothing, and if you keep all five, you get a 25 percent discount on the total. If you keep fewer, you pay straight retail, in addition to the small styling fee. If you keep none, you're just paying the styling fee. Returns are free.

    Now, I was persuaded that this is a business model with real potential by the fact that my wife and two of my kids quickly became members … and my wife and daughter also signed on for Nordstrom's Trunk Club, which offers a similar service. None of them particularly like clothing shopping, and so services like these definitely had appeal.

    My 30-year-old son remains a big fan of StitchFix - it is like they totally got him, and almost everything they sent him was something he liked. And I don't think he'd mind my saying that StitchFix has helped him improve his game when it comes to clothing. It has been more of a mixed bag for my wife and daughter - they tend to like Trunk Club more than StitchFix, and it seems like they send back more than they keep, but both services have managed to help them avoid going to stores. So that's a win.

    I'm not sure why, but I sort of resisted the StitchFix lure, even though everyone else in my house is a customer. But a few months ago I decided to give it a try and see if the business model would work for me.

    I got a deal - three shipments over three months, and only one styling fee - and I was curious to see how it all would play out.

    I'm here to tell you that in my case, StitchFix batted about .400 … an average that will get you into the Baseball Hall of Fame, but was lower than I expected from the company. The first box was a big win - I liked and kept all five items, but I sent everything back from the second box and only kept one out of five items from the third.

    On the plus side, I discovered a jeans brand - Mavi - that I absolutely love (but that I can get from a number of other sites, including Amazon). I also learned that I don't really need as many clothes as StitchFix wants to send me, and so I've changed the frequency to quarterly, and we'll see what they come up with in April. (To be fair, I took a lot of things off the table in my StitchFix profile - I didn't want them to send me any outerwear, shoes, belts, or dress clothing. So I probably was something of a challenge.)

    Having gone through the experience, though, I wouldn't say that I am any less persuaded that a StitchFix-style model has real applicability and viability. In essence, it is an automatic replenishment model, which for me makes sense when it comes to the consumables I buy via Amazon's Subscribe and Save, but not for jeans and shirts.

    But the real lesson I take from my StitchFix experience is that it isn't for everyone - but that's okay. In fact, it is the point … that it is critical for retailers to be more targeted when it comes to understanding the needs and wants of their specific customers, and not create one-size-fits-all models that inevitably will prove disappointing to a lot of people.

    Some people want to go to the store, some people want pickup services, some want delivery, and some will want automatic replenishment services … and a lot of people will want to use all of the above, depending on the day and the time and the circumstances.

    Which is why a nimble distribution system is critical … making sure you have the products people want, and making sure that you have a variety of ways to get those products to people in a timely, efficient and effective manner.

    You know. Sort of like a consumer-centric ecosystem. (I wonder what big company has that as job one?)

    That's what is on my mind this morning. As always, I want to hear what is on your mind.

    KC's View:

    Published on: January 9, 2020

    Walmart yesterday unveiled what it is calling Alphabot, which Bloomberg describes as "an automated, 20,000-square-foot warehouse that could make its grocery pickup service faster and more efficient."

    The Alphabot is Walmart's entry in the micro-fulfillment wars; its "robotic carts quickly retrieve items and deliver them to employees at a picking station, who then pack and deliver the order to customers’ cars in the parking lot."

    Bloomberg notes that the Alphabot - which has been development for several years, and currently is being tested by Walmart in Salem, New Hampshire - brings both efficiency and effectiveness to the picking process, which can be laborious and disruptive in-store. The design of the warehouse has been crafted to emphasize speed: "The thirty bots in the Salem warehouse, each about two feet wide, quietly whiz product-filled totes around vertically and horizontally without the need for lifts or conveyors, picking items ten times faster than a human shopper could."

    The picking bots only are picking packaged products; fresh food still is being picked by hand.

    Some context from Bloomberg: "While Walmart’s overall e-commerce division has had its ups and downs, its online grocery business has been a star, boosting a category that contributes more than half of its U.S. revenue. Today, customers can pick up their orders curbside for free at more than 3,000 stores, up from about 400 in 2016. The company also offers home delivery for a fee, and is testing deliveries that go right into customers’ fridges when they’re not home.

    "The moves have helped Walmart stay ahead of Amazon, and its Whole Foods chain, as the internet giant tries to grab more of Americans’ food spending. A recent survey from The Retail Feedback Group found that 37% of shoppers chose Walmart for their most recent online grocery order, besting Amazon (29%) and also traditional supermarkets, many of whom employ Instacart Inc. to handle fulfillment."
    KC's View:
    I continue to be a big fan of concepts like ghost kitchens, dark stores and micro-fulfillment centers. They would seem to be the very definition of the kind of flexibility that a lot of traditional retailers can use to adapt to changing consumer needs, and reflect the kind of non-traditional thinking that more companies need to adopt if they are going to remain relevant.

    Published on: January 9, 2020

    MSN News reports that regional grocer H-E-B has topped a new Dunnhumby ranking of the top US grocers that evaluated seven categories through the prism of consumer responses: price, quality, digital, operations, convenience, discounts and rewards, and speed.

    It was a de-throning of sorts. For the past two years, Trader Joe's had been ranked number one. This year, it came in second.

    Amazon came in third.

    The other companies at the top of the list, in order, were Market Basket, Wegmans, Costco, Aldi, Sam's Club, Walmart, Publix, WinCo, Fresh Thyme, Sprouts and ShopRite.

    "One of the most important findings is that leading traditional regional grocers are experiencing a resurgence in customer preference, by winning with relevance and convenience," Jose Gomes, president of North America for Dunnhumby, said in the published report.
    KC's View:
    I'm always a little skeptical of these sorts of studies, largely because they seem so selective - a snapshot of the moment, the view dependent on who is doing the talking. I can come up with a half-dozen food retailers who are as good or better than some of the companies named. But, that said, it is hard to argue with the notion that H-E-B is best-in-class.

    Published on: January 9, 2020

    The Memphis Business Journal reports that Memphis shoppers are all excited about the possibility that Publix may be opening stores there, prompted by the fact that many of them received mailers from the retailer, which has been expanding in the mid-Atlantic but has not yet announced that it is coming to Memphis.

    But Publix says the mailers were sent out "in error," and that it has no announced plans to open in Memphis.
    KC's View:
    What's the over-under on when Publix does announce it is going to be opening a store within a few miles of Graceland? Mistakes like these can't happen if the company doesn't have a list on hand.

    Publix almost certainly is thinking about going to Graceland, Graceland, Memphis, Tennessee … there is reason to believe that it will be well received, in Graceland.

    Published on: January 9, 2020

    Quartz reports that "Amazon plans to launch its own digital platform for luxury fashion," essentially operating "similar to the concession model seen in department stores and specialty retailers, where brands effectively lease space or pay a percentage of sales to run their own mini-shops within the store."

    The story says that a dozen brands are said to be working with Amazon on the project at the present time, each of which will control the look of their mini-sites, prices and promotions, while Amazon would handle fulfillment out of an Arizona distribution center.

    Amazon is said to be planning a $100 million promotion campaign when the new site rolls out, which it hopes will solve problems it has had in the past breaking into the high-fashion segment.
    KC's View:
    If at first you don't succeed...

    Published on: January 9, 2020

    Excellent story in the New York Times about high-profile chefs who currently are running some of the nation's most prestigious and gastronomically adventurous restaurants, but who got much of their training and early experience working at the likes of Applebee's, IHOP, and Wendy's.

    There's actually a pretty good reason for taking this route, the Times writes:

    "Chain restaurants are often accused of a sterile uniformity and a lack of attention to quality ingredients, nutrition and the environment. But for anyone trying to enter the restaurant business, they have particular attractions: formalized training, efficient operations, predictable schedules and corporate policies that claim to discourage the kind of abuses that have come to light in the #MeToo era. The pay is sometimes better than at independent restaurants, and the Affordable Care Act requires companies with 50 or more full-time employees to provide health insurance.

    "They also have the jobs. In 2017, the number of independent restaurants in the United States fell by almost 11,000, to 346,100, from the previous year, according to an analysis by the NPD Group, a market research company. But the number of chain restaurants rose by almost 1,000, to 301,200.

    "At the same time, enrollment in culinary schools is declining; at the New England Culinary Institute in Vermont, for example, enrollment dropped to about 300 in 2017, from 800 in 1999, according to The Associated Press.

    "As chains claim a larger slice of the restaurant business, they may become an increasingly common, and far more accessible, path to a career as a chef."

    There you have it, and you can read more about it here.
    KC's View:
    It seems to me that food retailers need to figure out how to get a piece of this action … after all, many of them are known for "formalized training, efficient operations, predictable schedules and corporate policies that claim to discourage the kind of abuses that have come to light in the #MeToo era." And ambitious cooks and chefs could help them raise their games.

    I continue to believe that traditional retailers ought to make deals with local chefs and give them temporary space where they can ply their trade, create a little in-store excitement, and develop a reputation … and then ought to rotate them in and out of their stores on a regular basis. Turning their stores into culinary laboratories and experiences could have a tremendously positive impact.

    Published on: January 9, 2020

    Bloomberg reports that Amazon's Ring subsidiary has fired "at least four employees for improperly seeking access to customer data over the last four years." Specifically, the firings took place because the employees watched more customer video shot by Ring doorbells and cameras than was appropriate for their jobs.

    The story notes that "Ring has been beset by allegations of privacy flubs in the last year, from a report that employees had previously passed around unencrypted footage captured by doorbells, to claims from civil liberties groups that Ring’s partnerships with law enforcement, which allow police departments to ask that doorbell owners turn over footage to aid investigations, risk enabling a government surveillance network."

    On the other hand, there has been a lot of coverage of a high-profile murder investigation in New Canaan, Connecticut, which is just a couple of miles from my house, and one of the things that apparently led to the arrest of the husband of the victim was footage of him collected from such doorbells that accounted for time that he'd been using as an alibi. Since his wife's body still has not been found - just DNA suggesting her body had been dismembered and disposed of - this kind of makes me glad this stuff exists.
    KC's View:

    Published on: January 9, 2020

    Westchester Magazine reports that Wegmans has determined when its new store in Harrison, New York, which will serve both suburban Westchester County and southeastern Fairfield County, will open: Sunday, June 7, 2020.

    Hiring already has begun for 220 full-time employees, with another 280 part-time positions still needing to be filled.

    The magazine notes that if the recent "Brooklyn opening was anything to judge by, you may want to set up your tents and sleeping bags out front in early May."


    • The Cincinnati Business Courier reports that Kroger has launched a plant-based meats brand, Simple Truth Emerge: Plant Based Fresh Meats, which it says consists of 50 SKUs and now is available in stores nationwide.

    According to the story, "The product line capitalizes on the growing dietary trend by offering fresh burger patties and grinds (similar to ground beef without the meat) at affordable prices. Simple Truth Emerge expands on Kroger’s Simple Truth Plant Based products it launched last year."


    • In Oregon, Willamette Week writes that "in just a few months, the city of Portland will begin investing the proceeds from a groundbreaking new tax on large companies … The Portland Clean Energy Community Benefits Fund, or PCEF, will raise as much as $60 million a year from a new tax on big retailers. The money is supposed to supply clean, efficient energy and jobs to people the city has long slighted.

    "The overarching goals: to provide members of underserved communities with valuable skills while insulating, caulking and tweaking inefficient heating and cooling systems and installing rooftop solar panels at the homes of low-income Portlanders."

    The story notes that the tax was passed by a wide margin in a 2016 ballot initiative, and "at its core, the concept transfers wealth from big corporations such as Walmart to low-income Portlanders of color."


    The Hill reports that "As part of its Mental Health Matters campaign, Starbucks announced free subscriptions to meditation app Headspace for its employees." Headspace is described as "a downloadable app that offers guided meditation tutorials and encourages taking several minutes a day to meditate and be mindful."

    However, the story notes, "while some employees appreciate the support, others think more tangible benefits, like higher wages, would be more helpful."


    Reuters reports that "Impossible Foods is no longer trying to win a coveted deal to supply McDonald’s Corp with plant-based burgers."

    The reason: it says it "cannot produce enough of its imitation meat to partner with the world’s No. 1 fast-food chain."

    Rival Beyond Meat, however, says it continues to negotiate with McDonald's, and would have no problem keeping up with demand.
    KC's View:

    Published on: January 9, 2020

    • Stater Bros. Markets announced that Keith Thomas, the company's group senior vice president of retail operations and a 39-year veteran of the company, has been promoted to the role of executive vice president of retail operations.
    KC's View:

    Published on: January 9, 2020

    Buck Henry, the actor. writer and director, has passed away at age 89.

    Henry was a major talent. He wrote the screenplay adaptations of films that included The Graduate, Catch-22, The Owl and the Pussycat and To Die For. He co-directed (with Warren Beatty) the 1978 version of Heaven Can Wait (and played an angel whose mistake sets the plot in motion). He co-wrote 1972's What's Up, Doc?. He hosted "Saturday Night Live" 10 times during its first five years.

    And, he co-created, with Mel Brooks, the sixties situation comedy, "Get Smart."

    The Variety obit provides this bit of trivia:

    "From 1959-62, he generated some notoriety by pretending to be G. Clifford Prout Jr., the president of the Society for Indecency to Naked Animals (SINA). Henry called the prank organization 'a parody of uptight, silly morality chasers.' (Slogans included 'A nude horse is a rude horse.') But Walter Cronkite, who broadcast a serious segment on SINA for CBS News, never forgave Henry for not letting him in on the joke."
    KC's View:

    Published on: January 9, 2020

    MNB the other day took note of a VentureBeat story about how Procter & Gamble is at the annual Consumer Electronics Show (CES) in Las Vegas showing off "a connected baby care system … It updates traditional baby monitoring by combining a video monitor with an activity sensor to offer parents a real-time holistic view of their baby’s sleep, feeding, and diapering patterns — all in one place. The company said Lumi transforms the data into tangible, personalized insights and actionable tips to support parents as their baby develops and grows. By blending real tracking insights with their own intuition, parents can know, at a glance, how their baby is doing and anticipate their offspring’s needs."

    I commented:

    At the risk of sounding like a curmudgeon, I find myself wondering if smart homes will end up creating stupid parents. Or maybe, to put it another way, whether connected homes could lead to disconnected parents.

    I love it when technology can make things easier, but I would worry that some parents may become so dependent on these devices that they won't pay as much personal attention to their kids. To me, there is a line … it seems fine to use technology, for example, to monitor a sleeping child, but not so much if one were to use technology to read a book to a child rather than doing it yourself.


    MNB reader Jackie Lembke responded:

    Your concerns are valid, but a little late. Without the monitoring but with the use of smart phones and tablets there are already parents who have become disengaged. They are either on the devices themselves or have turned the devices over to their child(ren) to work as a sitter instead of engaging with their child(ren). It is time to unplug everyone and go outside and play or stay inside, read, play a board game, teach your kids how to play card games that keep their minds sharp but are also fun. Monitoring while the sleeping is one, monitoring when the parent is available is definitely crossing a line.



    Bloomberg reported the other day about how a Netherlands company is reviving the concept of the milkman, "but with a modern flourish … using electric vehicles, focusing on less food waste and fewer food miles traveled. The company buys and delivers locally, with its vans going no faster that 50 kilometers per hour … Picnic has unleashed a fleet of 1,000 electric vans on to the streets of the Netherlands and Germany and plans to add 'hundreds more' by the end of 2020."

    I commented:

    I have to say that I like this idea more than autonomous vehicles, in part because it seems to be more immediately attainable. But there's something else…

    The thing I remember best about the milkman - and I am old enough to remember that metal box that sat on our back porch, magically being filled on a regular basis with bottles of milk and cream being delivered and empties being taken away (sustainability!) - is that he tended to have a relationship with the households that he served … there were connections being forged that went beyond the simple product.

    That's something sustainable worth aiming for.


    One MNB reader wrote:

    Had to laugh out loud....I come from a family of 7 and we too remember the Milkman coming twice a week or when needed. The relationship was very strong with him personally and we were all on a first name basis. My Dad use to joke that the Milkman was closer to us than he was... which use to make my mother mad.

    As long as the milkman wasn't closer to your mom than he was…



    Kate McMahon wrote yesterday about various returns experiences, prompting one MNB reader to write:

    Our local Kohls had a dedicated Amazon return location after the Holidays.  Someone at the front of the store as you walked in asked if the return was for Kohls or for Amazon and directed us to the proper location.  It took less than five minutes of standing in line and processing the return.  It was a great experience.

    MNB reader David Spawn wrote:

    I hope that Happy Returns also works with the retailers to make sure the goods that are sent back are actually able to be sold again.  I do appreciate their efforts at making the return process seamless, but I am concerned that the ease with which they make the process simple and friction-less, will ‘hook’ us into the habit of ever easier returns, further exacerbating the waste associated with it.  Many retailers  are ill-equipped to deal with the flood of returns and a huge volume of returns never find a home that isn’t a landfill or an incinerator (estimates range as high as 5 BILLION pounds of waste every year) – a substantive portion of this waste is apparel & shoes.
    KC's View: