business news in context, analysis with attitude

Published on: February 28, 2020

by Kevin Coupe

CNN reports that a new study in the scientific journal Environmental Science & Technology says that it is more eco-conscious to go to the store than to order online.

The reason is that people shop differently online.

According to the story, "In the study, researchers estimated that shopping at brick-and-mortar stores for frequently bought items such as toilet paper, shampoo and toothpaste, often results in less greenhouse gas emissions than ordering the products from a company that only sells through the internet.

"The main reason is because of how people shop online: Many buy items online frequently -- but they only buy a few items per purchase … Frequent online purchases produce more packaging waste, and online items tend to come from different distribution centers. Both factors result in higher greenhouse gas emissions per item."

CNN goes on:  "In the United States, greenhouse gas emissions from shopping at physical stores were … estimated to be higher than from the brick & click channel, and lower than the pure play channel, on average."

The Eye-Opener, I think, is two-fold.

First, this is why (at least in part) Jeff Bezos decided to commit $1.2 billion to climate change initiatives.  If you're part of the problem, you'd better also be part of the solution.  (Plus, I've noticed a lot more envelopes and fewer boxes coming from Amazon lately;  I don't think this is just happenstance.  I think Amazon is consciously trying to cut back on packaging.)

Second, I'm not sure it matters, at least not for most people most of the time, in the short-term.  Amazon has managed to get a lot of us addicted to its service - in fact, Prime was developed as a way to get people to place a lot of small orders as opposed to building lists and  bringing together products to be shipped together.

Published on: February 28, 2020

The Washington Post reports that "Walmart is confirming that it’s developing a competitor to Amazon’s juggernaut Prime membership program."

While details have not yet been disclosed, the program has been named Walmart+.

The program reportedly will be tested beginning in a few weeks, and Walmart is saying that it anticipates being able to offer elements that Amazon cannot.

From the Post story:

"The initiative comes as Walmart is locked in an arms race with Amazon to bring packages faster and faster to customers’ homes. Amazon’s Prime $119 per-year membership program includes such perks as unlimited next-day shipping on more than 10 million items as well as free streaming of music, TV shows and movies.

"Walmart Inc. recently rolled out a program offering customers the option to pay a yearly $98 fee or a monthly $12.95 fee to receive unlimited same-day grocery deliveries from nearly 2,000 Walmart stores."

Published on: February 28, 2020

Fast Company reports that Panera is launching a new subscription coffee program for $8.99/month, "Subscribers can get one cup of hot drip coffee, hot tea or iced coffee every two hours, unlimited."

Panera has an ulterior motive:  "Though Panera is pitching the subscription as a way for you to save money on coffee, Panera’s 150 test locations over the last three months saw subscribers visit three times more frequently and purchase 70% more in add-on items than the average customer. In other words, watch your wallet. These metrics, in addition to a surge of new customers, are inspiring Panera’s quick nationwide rollout."

Fast Company notes that Panera is perfectly positioned to make the program work:  "Unlike most coffee chains, their current coffee business is small and able to accommodate a quick expansion. Panera locations are also suburban and mostly accessible only by car—therefore not at risk of the foot-traffic deluge that overwhelms urban coffee chains. The company hopes to expand its customer traffic, and particularly its breakfast business, which is a growth area throughout the industry."

Published on: February 28, 2020

In New York magazine, the "Grub Street" column reports on a new study from hospitality workers union Unite Here saying that Starbucks' "black baristas were paid a median wage of $11.15 an hour, or $1.85 less than their white counterparts — despite Starbucks announcing in 2018 that the company had achieved 100 percent pay equity for all employees doing similar jobs."

The study, according to the story, "also includes firsthand accounts of discrimination against LGBTQ employees, while a quarter of foreign-born employees reported being told to speak English on the job."

Starbucks apparently has not yet commented on the study.

Published on: February 28, 2020

The Center for Consumer Freedom - which is a lobbying organization that represents, among other things, the meat industry - is running full-page ads in the New York Times, Wall Street Journal and Los Angeles Times suggesting that fake meats ought to subject to mandated labeling under California's Prop 65, which requires labels on products with large enough amounts of carcinogens to cause cancer or reproductive issues.

The Center says it decided to run the ad "after independent testing found cooked plant-based meat products like Beyond Sausages and Impossible Burgers contain large enough amounts of the carcinogen acrylamide to warrant Prop 65 labeling in California … The discovery of acrylamide in cooked plant-based protein products adds another blemish to the perceived health halo around these products. According to nutritionists, synthetic meats are ultra-processed and not healthier than real meat."

Forbes, on the other hand, makes the point that "just as with coffee and potato chips … the mere presence of acrylamide doesn’t mean these foods actually cause cancer. There just isn’t enough evidence to link acrylamide in food, even in relatively high amounts, with an increased cancer risk. There is more evidence suggesting an increased risk of cancer associated with red meat, even more for processed meats like bacon, not to mention alcohol, which is a known carcinogen.

"But it’s important to keep in mind that just because there are studies linking a food to an elevated cancer risk doesn’t mean you will get cancer if you eat them. With enough evidence, health experts may recommend that you limit your intake of these foods, however, or eat more foods that are associated with health benefits, like fruits and vegetables."

Published on: February 28, 2020

•  From CNBC:

"Lowe’s CEO Marvin Ellison said the home improvement retailer will soon be unshackled from its outdated website, which will make shopping easier for customers and give the company a sales boost.  The North Carolina-based retailer is banking on a website makeover and other digital improvements to play a meaningful role in its turnaround."

According to the story, "With the new website, customers will be able to check out with one click. Items that tend to go in the same room or same part of the house will be listed on a single webpage.  Lowe’s already added items that need special handling to the website, such as fire extinguishers, batteries and cleaning supplies. And it’s changing the way item prices are listed online, by breaking out the cost of the item and the cost of shipping.

"Lowe’s leaders hope the changes will bring its website more in line with competitors."

Plus, Lowe's has "pulled back on couponing and site-wide promotions because it was 'driving traffic to an inferior experience for customers'," Ellison says.

Published on: February 28, 2020

•  The Wall Street Journal reports that food delivery service DoorDash "has filed for an initial public offering, firing the starting gun on what could be one of the year’s marquee listings … Seven-year-old DoorDash has expanded quickly and its private valuation ballooned. A funding round last year valued DoorDash at nearly $12.6 billion, up from just $1.4 billion in 2018."

The IPO is likely to take place as soon as late spring.

Published on: February 28, 2020

Yesterday we took note of a Venture Beat report that Amazon is testing two different artificial intelligence- driven systems that it hopes will help the company deliver better customer service.

I commented:

I was preparing to write a wistful, elegant commentary yearning for the time when people would talk to people because that was the best way to really discern what matters to the customers, because algorithms can only take you so far.

But then I got to the part about how $23 billion in annual salaries could be saved by using AI for such interactions, and at that point I gave up.  That's real money … and if two-thirds of shoppers are open to the chatbot experience, who am to get all sentimental?

One MNB reader responded:

Next time you are in O'Hare airport and and walk by one of the McDonald's....especially those that have kiosks for self ordering......watch how fast people at kiosks place their orders vs. waiting in line.....similar experience with Panera during any lunch hour at their locations outside of airports.

it's not about people taking their order, it's about spending less time in line placing order and therefore more time eating with friends.

Fair enough.  I can't argue with those priorities.

We reported yesterday that in a move designed to directly compete with a similar service offered by Amazon to its Marketplace vendors, Walmart is launching a new initiative in which, for a fee, it will store, pack and ship items being sold on its website by third-party vendors.

One MNB reader observed:

It would be interesting to know about Amazon’s view and treatment of outside vendors, who are also Amazon customers.  As an industry insider who works on site in grocery retailer and wholesaler offices, the way businesses treat their vendors provides a window into their corporate culture.  You just know that when you are welcomed and treated with respect, even as a vendor, you are working with a business that values their reputation and the way they want to be perceived in the community.

I used to spend much time working in retail stores.  Normally, store management and those in subordinate management roles were reasonably friendly even if very busy.  However, there were instances when I, as an outside vendor, was treated poorly and disrespectfully.  I am sure that these people never gave a thought that my wife and I were also customers.

Published on: February 28, 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.

Published on: February 28, 2020

I've been on the road a lot, and pretty busy, and so my consumption of media has been a little limited.

One thing that I've been taking in short bites in the third set of episodes in "The Chef Show," on Netflix, which is a sort of combination cooking show-travelogue that is hosted by writer-director-actor Jon Favreau and chef Roy Choi, who advised Favreau for his 2014 film, Chef.  (A terrific movie, if you've never seen it.)

There have been 20 episodes in total, broken up into three sets, and the third set debuted about 10 days ago.  It is a delightful series in that it traffics mostly in enthusiasm - we learn something about food and cooking, but mostly we get to live vicariously as Favreau and Choi visit with a variety of cooks and chefs and get a sense of their passions and techniques.  "The Chef Show" isn't as profound as the documentaries of Anthony Bourdain, but it has its own breezy charms.

One of my favorite episodes came in the second set - "Guerrilla Tacos," in which the hosts hang with Chef Wes Avila and make a variety of tacos, burritos and tostadas;  I watched it on a plane, somewhere over the midwest, which in some ways was the worst place to see it because by the time it was over I was starving.  I can't wait to go toi Avila's Guerrilla Tacos restaurant in Los Angeles next time I am there.

Two favorite episodes from the third set - one with Wolfgang Puck, taped at one of his Las Vegas restaurants, that serves as a kind of primer on how to cook steak, and another in which Choi gives Favreau a backstage look at his new Best Friend restaurant in Las Vegas, demonstrating how he brings a food truck aesthetic to an unorthodox bricks-and-mortar establishment.

"The Chef Show" continues to be a delight … and I hope Favreau and Choi continue making episodes in between movie gigs and restaurant openings.  They are a fun hang.

That's it for this week.  Have a great weekend, and I'll see you Monday.

Slàinte!