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    Published on: February 4, 2020

    Digital strategies aren't just about creating alternatives to the bricks-and-mortar shopping experience. Done effectively, they can actually bring people back to the store, while also eliminating customer anonymity, creating rich and actionable data, and deepen relationships between the store and consumer in a way that transcends the simple transaction.

    Our newest Retail Tomorrow podcast, which brings together a terrific panel of experts from a wide range of disciplines, was recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show. Our guests:

    • Matt Alexander, co-founder of Neighborhood Goods, an unusual and fascinating take on physical retailing with stores in Dallas and New York.

    • Patrick Flanagan, senior vice president of digital marketing and strategy for Simon, which has more than 200 properties in 37 states and Puerto Rico.

    • Tom Furphy, CEO and Managing Director of Consumer Equity Partners, a member of the Retail Tomorrow podcast family and a regular contributor to "The Innovation Conversation" on MNB.

    • And Jalna Silverstein, a leader in Ernst & Young’s Transaction Advisory Practice and its Real Estate, Consumer Experience and Retail Strategy.

    You can listen to the podcast here.

    This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

    Pictured below are our panel members, from left: The Content Guy, Matt Alexander, Tom Furphy, Patrick Flanagan, Jalna Silverstein.


    KC's View:

    Published on: February 4, 2020

    You only have about 20 months to wait.

    Disney announced yesterday that Hamilton will be coming to movie theatres, premiering on October 15, 2021.

    It won't be a traditional film adaptation, though. In fact, it already has been filmed - Hamilton will be a "live capture" of a 2016 stage performance of the show featuring the entire original cast, including Lin-Manuel Miranda in the title role and Leslie Odom Jr. as Aaron Burr.

    "Hamilton" hit Broadway in 2015, and promptly became an enormous sensation, reinventing the musical in many ways and making history instantly accessible to a broad swath of audiences. (It also has gotten a lot of all-outs recently because of one of its songs, "The Room Where It Happens." John Bolton's memoir of his time in the Trump White House is called "The Room Where It Happened." And both sides in the recent impeachment trial cited Alexander Hamilton numerous times, albeit not in rhyme.) The Broadway show won 11 Tony Awards as well as the Pulitzer Prize for drama.
    KC's View:
    Expect this to be an enormous hit.

    I will tell you that I've seen hundreds of shows in my life - it is one of my greatest cultural pleasures, and I'd go dozens of times a year if I could afford it - and "Hamilton" easily is one of the best things I've ever seen.

    I wrote about it here when I saw it a couple of years ago, in conjunction with the Produce Marketing Association convention where I interviewed Leslie Odom Jr. on stage, talking about innovation, disruption, diversity and storytelling through the prism of art and culture. That's exactly what "Hamilton" exemplifies, and the PMA session was one of the best in which I've ever participated. You can read about it here.

    Published on: February 4, 2020

    Got the following email about the announcement that Earth Fare is closing down its 50 stores.

    One MNB reader wrote:

    Agree with you that Earth Fare was lacking in identity however I think you overlooked the "debt" portion of the problem. It's hard for these retailers to invest in creating consumer connections when their private equity backers have them so loaded up with debt that they can't maneuver.

    Totally agree.

    From MNB reader Jeff Weidauer, referring to my comment that Earth Fare’s "biggest problem was that it didn't have a strong enough brand identity nor a compelling enough offering to compete in a fractured and fractious marketplace.”

    Exactly – it’s  the reason for the failure of Lucky’s, Village Market, and (insert name here) as well.

    One of the things I wrote in my commentary yesterday was:

    …Last year Earth Fare decided to differentiate its offering by hiring a chief medical officer. Clearly, these efforts at life support and resuscitation didn't work.

    Guess they should've hired an undertaker.

    My friend and MNB reader Lisa Sedlar thought I was working too hard at being a weisenheimer:

    While it was clever as it relates to the previous sentence, It seems a tad insensitive to say that. A lot of folks worked hard to make the company work and thousands of people are going to be without a job as a result of them closing.

    Not something to be cute about in my book.

    Once again, I am reminded that I am only half as funny - and half as cute - as I think I am.

    Nothing like a reality check…

    Responding to our Staples reinvention story, MNB reader Howard Schneider wrote:

    I’ve been fascinated by watching office supplies retailers respond to a radically changing world. It’s not just Amazon, DTC subscriptions and other newer, more efficient selling models; the fact is, the primary demand for much of what these stores sell has gone away and will not come back. People and businesses simply need far less paper, ink, filing supplies, physical storage, etc.

    I see three approaches to the situation in the market: Office Depot/Office Max turned to consolidation; Staples is turning to innovation, trying to become a “third space” catering to needs beyond product; and Poppin has re-invented the product category itself, turning utilitarian items like staplers and file folders into fun, colorful vehicles of self-expression. Each of these approaches has its pros and cons, and in the end all three companies may go the way of buggy whip makers in the early 20th Century. But it’s fun and even inspiring to watch these creative efforts to survive.

    Yesterday we took note of a New York Times column by Ginia Bellafante that examined the social and cultural impact of e-commerce, and she was not encouraged.

    I wasn't buying everything she was selling (though I normally like her columns a lot), and neither was MNB reader Stephanie Steiner:

    Bellafante is missing a giant point…

    Starbucks is still handling the orders in the order received.  Those mobile orders were placed from somewhere else, likely before she walked in the door, and that is why she is waiting. Not because mobile is a bigger priority to Starbucks, but because it’s a bigger priority to their customers.

    When I frequent Starbucks, it’s very likely I’m going to order the exact same coffee order that I ordered last time, and the time before that and the time before that – I don’t change my order.  For this reason, the app is perfect: my order is stored, and my coffee order is placed with two, maybe three touches.  It’s unlikely she would be in the building yet, and I certainly am not.  I don’t even start my journey toward it until after I’ve ordered: then I leave my desk / car / whatever and walk to get it.

    Sometimes it’s ready when I arrive, sometimes it isn’t. I say good morning, socialize with others waiting, and tip via the same app. The coffee, food, and atmosphere is not necessarily better than the other options we have in Seattle, but the app is great.


    And finally, regarding the fake-ice-for-skating Eye-Opener we had yesterday, one MNB reader wrote:

    I have skated on these imitation ice rinks and they suck. If you do fall that crap gets all over your clothing. Never again.

    Another reality check.
    KC's View:

    Published on: February 4, 2020

    • Dave Lewis, the outgoing CEO of Tesco, is a little less outgoing than previously believed.

    The company announced that Lewis, who planned to step down this summer, instead will hang around into October. The delay is designed to allow Lewis's successor, Ken Murphy, to fulfill the non-compete clause in his contract with Walgreens Boots Alliance, where he has been chief commercial officer.
    KC's View:

    Published on: February 4, 2020

    • The Washington Business Journal reports that Albertsons has decided to close down a distribution center in Maryland's Prince George's County, and will begin "supplying its D.C.- and Baltimore-area stores from a Pennsylvania distribution center."

    According to the story, centralizing distribution “will help fuel the company’s investments and benefit its e-commerce business, its brick-and-mortar stores, and its customers,” said Christine Wilcox, Albertsons’ general vice president of communications. “In addition, the partially automated facilities at this distribution center will create a more efficient supply chain that will allow us to reduce waste.” 

    • The Dayton Business Journal reports that Kroger "has confirmed it will close one of its Dayton-area stores … its location on 1822 S. Limestone St. The closure will take effect March 3."

    According to the story, "The announcement comes one year after Kroger shuttered its Home Road location, which is on Springfield's north side. Kroger also closed its North Limestone Street store last year, bringing the total number of recent closures to three … The reason for the closure is due in part to a shift in priorities within the Kroger company," the story says, as Kroger tries to "reposition itself to handle call-in orders, delivery and other new ventures the company is making to compete with e-commerce companies such as Amazon and others."
    KC's View:

    Published on: February 4, 2020

    MarketWatch reports that analysts are suggesting that in view of the fact that Amazon's grocery delivery orders - both via its own site and Whole Foods - doubled in 2019 compared to 2018, it seems likely that remodeling of Whole Foods stores to make them more delivery-friendly could be on the horizon.

    Context from the story: "Online food and beverage sales are expected to reach $143 billion by 2025, according to data provided by Nielsen Total. That’s about 18% of the total $800 billion that is expected for both online and in-store spending. The number of households that are shopping for groceries across online and in-store channels is already noticeably rising, reaching 44% of all U.S. households in 2019."

    • The Associated Press reports that "Amazon’s U.S. workforce has topped 500,000 for the first time, up 43% from the year before and more than triple what it was five years ago, the company said Friday. It gained 150,000 workers last year, more than the size of Apple’s entire workforce."
    KC's View:

    Published on: February 4, 2020

    The National Grocers Association (NGA) has announced the winners of its 2020 Creative Choice awards, who will be honored later this month at the NGA Show in San Diego at a session hosted by MNB's own Michael Sansolo.

    The contest features 11 categories with two winners from each - one from a 1-15 store operator the other from an operator with more than 15 stores.
    Voting currently is open for the highest awards of the contest, the “Outstanding Merchandiser” and “Outstanding Marketer.”

    The winners are:

    Connections Through Social Media
    • 1-15 Store Winner: Hip Foodie Mom, Metcalfe’s
    • 15+ Store Winner: Healthy Tip Tuesday, Coborn’s
    Connections Through Digital Market or Mobile
    • 1-15 Store Winner: Donut Goes to Space on National Donut Day, Bowman’s Market
    • 15+ Store Winner: Daily Delights Loyalty Offers, Remke Markets
    Traditional Media - TV or Radio
    • 1-15 Store Winner: Grand Opening, Shoppers Value Foods
    • 15+ Store Winner: Butcher Makes it Better, K-VA-T Food Stores
    Traditional Media - Print
    • 1-15 Store Winner: We Believe, Newport Avenue Market
    • 15+ Store Winner: Peach Party, Sendik’s Food Market
    Grand Opening or Remodel
    • 1-15 Store Winner: Gateway West Grand Opening, Hornbachers Osgood
    • 15+ Store Winner: Grand Opening — Abingdon, Virginia Food City, K-VA-T Food Stores
    Local, Specialty, Emerging Products
    • 1-15 Store Winner: Coffee Crawl, Dorothy Lane Market
    • 15+ Store Winner: That’s Smart Launch, Coborn’s
    Seasonal Store Event
    • 1-15 Store Winner: Holiday Cheese Extravaganza Making the Big Cheese Bigger, Acquistapace
    • 15+ Store Winner: Taste of Italy, Brookshire Grocery Company
    Community Engagement
    • 1-15 Store Winner: Facebook Post Goes Viral, Dill’s Food City IGA
    • 15+ Store Winner: Big Grocery Cart, Brookshire Grocery Company
    Center Store/GM/Frozen/HBC Category
    • 1-15 Store Winner: Food Explorer Series, Dorothy Lane Market
    • 15+ Store Winner: Moonlight Madness Sale, Foodland/Food Giant
    Fresh Departments
    • 1-15 Store Winner: Food Explorer, Dorothy Lane Market
    • 15+ Store Winner: Pi Day, Cub Lake Street
    Special Recognition
    • Unilever Sustainable Living Award: Food for February, Rudy’s Markets
    • Kellogg’s Fighting Hunger and Feeding Potential: Spirit of Christmas Food Drive, Brookshire Grocery Company
    KC's View:

    Published on: February 4, 2020

    In Texas, the Community Impact newspaper reports that Macy's plans to debut a new Market by Macy's store in the Southlake Town Square there, about two dozen miles northwest of Dallas, at the end of the week.

    According to the story, "The store will provide a boutique shopping experience with Macy's-branded fashion. New products from specialty designers and local Texas brands for men, women, children and the home will also be available … Additionally, within Market by Macy’s, an exclusive beauty shop and brand will be introduced called Getchell’s Apothecary. The beauty shop and product is inspired by the first female executive to work in retail, Margaret Getchell … The 20,000-square-foot space also debuts an in-store food and beverage concept named Herald, as a nod to Herald Square. Herald will offer breakfast, lunch and snack menus daily as well as choices of craft beer and wine."

    The store reportedly also will feature an event space that can be used for everything from book signings to cooking tutorials.

    The Cincinnati Business Courier notes that this is the first of the format to be opened; Macy's also "operates about 680 Macy's and Bloomingdale's department stores as well as 190 specialty stores under the Bloomingdale's Outlet, Bluemercury and Macy's Backstage banners."
    KC's View:
    Macy's is making a big deal about the fact that it wants this new store to "tell a story," which it sees as a very 2020 approach to marketing the department store experience. I'll buy that (though I'm not sure I would've waited until 2020 to start crafting a narrative).

    The thing is, the new Macy's story does not exist in a competitive vacuum … it has to compete for time and eyeballs with not just other stores, but against a vast number of experiences that include but are not limited to shopping. So, we'll see…

    Published on: February 4, 2020

    From the Associated Press:

    "Federal antitrust regulators say a proposed merger that would combine old-school shaving brand Schick with upstart Harry’s would end up costing consumers some skin.

    "The Federal Trade Commission on Monday sued to block Edgewell Personal Care Co.’s $1.37-billion acquisition of Harry’s, which was supposed to be finalized this year. The FTC argues that bringing two major shaving brands together would hurt competition.

    "Edgewell’s Schick is the No. 2 razor maker in the U.S., behind Gillette."

    In its statement, the FTC says that "the loss of Harry’s as an independent competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers, one of whom is the acquirer."
    KC's View:
    Really? Could it be argued that since the other disruptive player in the sector, Dollar Shave Club, already has been purchased by Unilever, this is what is required to maintain a competitive balance?

    Just asking. Only because sometimes it seems like the FTC is fighting the last war instead of allowing companies to fight the next one.

    Published on: February 4, 2020

    Fast Company reports that "UPS just announced that it plans to order 10,000 electric vans from Arrival, a U.K. startup that builds electric vehicles from scratch."

    The story notes that this order reflects a tipping point of sorts - that "electric delivery vehicles are at a tipping point: The technology is now cheap enough that EVs can truly compete with gas and diesel trucks and vans."

    According to Fast Company, "The logistics company first began working with Arrival in 2016; today, UPS announced that its venture arm, UPS Ventures, also made a minority investment in the startup … The startup builds its own core components, with a modular design that uses a standard 'skateboard' base that can be topped with different cabins. Arrival’s CEO has said that its vehicles will be cheaper than diesel vehicles from competitors. UPS won’t comment on the purchase price, but simply says that Arrival is price competitive with UPS’s current vehicles."
    KC's View:
    I don't know about you, but when I see a delivery vehicle that is more environment-conscious, it makes me feel a little bit better about the negative impact I've probably had by placing my order online. This is the kind of stuff that more and more consumers care about.

    Rationalization? Sure. But as Jeff Goldblum says in The Big Chill, "I don't know anyone who could get through the day without two or three juicy rationalizations. They're more important than sex … Ever gone a week without a rationalization?"