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    Published on: January 26, 2021

    This weekly series of Retail Tomorrow podcasts features Sterling Hawkins, co-CEO and co-founder of CART-The Center for Advancing Retail & Technology, and MNB "Content Guy" Kevin Coupe teaming up to speculate, prognosticate, and formulate visions of what tomorrow's retail landscape will look like post-coronavirus.

    "Loyalty" may be one of the most over-used, under-utilized and misunderstood concepts in food retailing.  Too many retailers confuse it with "frequent shopper programs";  there are overlaps, to be sure, but the differences can be found in mindset, execution, and results.

    Our guest today is Gary Hawkins - father to podcast co-host Sterling Hawkins, co-CEO/founder of CART - the Center for Advancing Retail & Technology, and the man who launched one of the first loyalty programs in the US supermarket industry.  He talks with Sterling and Kevin Coupe about the critical importance of loyalty marketing as the industry moves out of a pandemic mentality and faces enormous competition going forward.

    You can listen to the podcast here…

    …or on The Retail Tomorrow website, iTunes or Google Play.

    Published on: January 26, 2021

    by Kevin Coupe

    I've been doing this a long time, so it isn't all the often that I get a  press release that makes me think, "Hmmm.  Never thought about that before."

    But that's what happened yesterday when I got an email from Tops Friendly Markets, based in western New York State, about a new TagBack program it is instituting.

    What the press release said is that while there are tons of steps in the supply chain that have been adjusted for reasons of sustainability, "there is no uniform solution for reusing or recycling the small but essential produce tag or twist tie."

    Which is when I said to myself, , "Hmmm.  Never thought about that before."

    Here's the elaboration:

    "In Tops’ ongoing quest to be as sustainable at every turn as possible, it recently partnered with TagBack by Bedford a company that recycles produce tags and ties and upcycles them into other useable products.  Customers can simply collect their produce twist ties, tags, and labels and deposit them in the designated box on their next shopping trip knowing they're making a difference … When the tags and ties are returned to the Bedford facility, the company sorts and recycles them in-house through their equipment.  Better yet, these tags then have a second life as they are diverted from landfills and are upcycled into other products."

    While in our house we try to throw those twists and ties into the recycling bin, it never occurred to me that there might be a more consciousness-raising way to approach these small items that I'm sure add up an enormous amount of waste.

    It reminded me of the time a number of years ago when I was told about a cork recycling program looking to address the problem of all the corks that get tossed into the trash.  (I started thinking about whether we throw out more ties and tags in our house, or wine corks …. and decided I really didn't want to think about it.

    Anyway, good for Tops.  Good for Bedford.  I love it when the email brings an actual Eye-Opener.

    Published on: January 26, 2021

    Eater Seattle reports that the Seattle City Council has unanimously passed a  new ordinance that mandates a $4-per-hour raise for "grocery workers in large stores," with the expectation that Mayor Jenny Durkan will sign it into law shortly.

    According to the story, "The bill applies to those covered by the minimum wage law who work at supermarkets with more than 500 employees worldwide and at stores bigger than 10,000-square-feet (or 85,000-square-feet with 30 percent of the space devoted to food retail). Some examples of businesses impacted by the mandate include QFC, Fred Meyer, Costco, Metropolitan Market, and Safeway. Smaller specialty shops, farmers markets, and convenience stores would be exempt."

    If signed into law, the raise would go into effect immediately and would last until the end of the current public emergency;  the Council has said it would revisit the mandate in four months.

    No surprise:  the United Food and Commercial Workers (UFCW) supports the mandated raise, while the Washington Food Industry trade association opposes it.

    KC's View:

    I am troubled by this legislative trend, which seems to be getting traction in certain markets.  It just strikes me as fundamentally unfair to impose a mandate like this on a subset of a specific segment.  I have no problem with hazard pay, and think that retailers that gave raises and then took them away made a mistake - the optics around who was essential and to what degree were just awful.  But this ought to be the company's decision - pay levels will determine which companies are preferred and which ones are not.  (This is different that a mandated minimum wage, which applies to everyone.)

    This is just bad public policy.

    Published on: January 26, 2021

    Albertsons announced yesterday that it is joining the Beyond The Bag Initiative, described as "a multi-year collaboration across retail sectors that aims to identify, test, and implement innovative new design solutions that serve the function of today’s single-use plastic retail bag, delivering ease and convenience for consumers while striving to lessen the impact on the environment."

    The group was created by the Consortium to Reinvent the Retail Bag, and includes three founding partners - CVS, Target, andWalmart - as well as Hy-Vee, Kroger, Meijer, Walgreen, and Dick's Sporting Goods.

    The initiative has established certain foundational goals, such as reducing "the use of virgin materials from natural resources and greenhouse gases emitted from the production and recovery of bag solutions" … "identify and scale innovative new design solutions to create a system that serves the function of the current retail bag" … "increase the percentage of retail bags diverted from landfills" … and "inspire and engage people to imagine new possibilities for the retail bag system."

    KC's View:

    Here's my question.  Why would any retailer not want to be part of an initiative like this?  

    Published on: January 26, 2021

    Excellent piece in Fast Company by Scott Galloway about where there is a real need for government regulation … and here's how he frames the issue:

    "Before anyone had heard of COVID-19, Big Tech companies had secured unassailable power in their core markets, and they were leveraging that dominance into new areas.

    "Amazon was moving into entertainment, Apple had claimed wearables, Facebook was even eyeing currency itself. They had long passed the stage where their greatest profits came from innovation, and were instead focused on monetizing their dominance. Their market power allowed them to starve new entrants of capital, keep competitors off their platforms, and use their profits to turn entire industries (e.g., streaming movies) into loss-leader features that differentiated and protected the lucrative core businesses (e.g., next-day delivery of toilet paper).

    "Then the pandemic shut down retail shopping, closed in-person entertainment, and moved nearly all of our interactions onto screens—and Big Tech grew even stronger. The rise to dominance of Big Tech has produced staggering share price gains in the short term, but it also suppresses innovation and harms long-term economic growth.

    "That is why the biggest economic boost that the Biden-Harris administration can deliver won’t be stimulus or bailouts, it will be committing funding and political support for serious antitrust enforcement.  I’ve been calling for the antitrust breakup of Big Tech for years, but the last few months of 2020 give me hope that this is going to happen."

    You can read the entire piece here.

    KC's View:

    Seems to me that there is real momentum for antitrust regulation of big technology companies, with pressure in that direction coming from both the left and the right.

    This also is a continuing campaign by Galloway - that was very much the goal of his book from a few years ago, "The Four."

    Seems to me that breaking up Facebook is a no-brainer.  I still think Amazon will have a persuasive argument about how its power serves consumers' interests, but that may not be enough to carry the day.   I can't quite work up as much enthusiasm for breaking up Apple, though - it seems far less a threat than the other companies.

    Published on: January 26, 2021

    Random and illustrative stories about the global pandemic and how businesses and various business sectors are trying to recover from it, with brief, occasional, italicized and sometimes gratuitous commentary…

    •  The global Covid-19 coronavirus numbers have crossed a troubling line - there now have been more than 100 million cases worldwide  The precise numbers are these:  100,351,416 confirmed cases of the Covid-19 coronavirus, resulting in 2,151,569 fatalities, and 72,402,569 reported recoveries.

    In the United States, there now have been 25,861,597 confirmed coronavirus cases, with 431,392 resultant deaths and 15,617,360 reported recoveries.  (Source.)

    •  The Washington Post reports that "at least 19.3 million people have received one or both doses of the vaccine in the U.S.  This includes more than 3.3 million people who have been fully vaccinated … 41.4 million doses have been distributed."

    •  From the Wall Street Journal:

    "Hospitalizations in the U.S. due to Covid-19 fell below 110,000 for the first time since Dec. 13, as the country reported fewer than 200,000 new coronavirus cases for the ninth day in a row.

    "A total of 109,936 people across the country were hospitalized due to the disease as of Monday, according to the Covid Tracking Project. The number of patients requiring treatment in intensive care units also fell slightly to 20,875."

    According to the Journal story, "President Biden said Monday that his target of administering 100 million Covid-19 vaccines in his first 100 days in office might rise to 150 million. Addressing reporters at the White House, Mr. Biden said he was hopeful the U.S. could soon reach an average of 1.5 million shots a day, up from the current 1 million. He also expressed optimism that by spring, any American who wants a coronavirus vaccine should be able to get one."

    •  CNBC reports that "Moderna said Monday it’s accelerating work on a Covid-19 booster shot to guard against the recently discovered variant in South Africa.

    "The company’s researchers said its current coronavirus vaccine appears to work against the two highly transmissible strains found in the U.K. and South Africa, although it looks like it may be less effective against the latter."

    •  CBS News reports that "Merck is pulling the plugs on two potential COVID-19 vaccines following poor results in early-stage studies. The drugmaker said Monday it will focus instead on studying two possible treatments for the virus that also have yet to be approved by regulators. "

    •  The Wall Street Journal reports that "in California, the daily total of new coronavirus cases has remained under 30,000 for six days, according to Johns Hopkins data. Saying the curve appears to be flattening, Gov. Gavin Newsom lifted regional stay-at-home orders across the state on Monday, but warned, 'We are not out of the woods yet'."

    •  The Los Angeles Times reports that "in a significant reshuffling of vaccine eligibility guidelines, California officials said Monday they will be shifting who is prioritized in the next round of COVID-19 inoculations to focus on age rather than specific occupations considered higher risk.

    "The modifications announced Monday by Gov. Gavin Newsom leave unchanged the current priority list, which focuses on healthcare workers and residents 65 and older before expanding to teachers, farmworkers and first responders.

    "But there will be shift in who gets the vaccine after them. Under the original plan’s tier structure, Tier 2 workers in manufacturing, transportation and commercial and residential settings along with incarcerated people and the homeless would be prioritized.

    "Under the new plan, the next priority would be people under 65 year old. No details about the criteria were released Monday, but it could end up focusing on people over 50 first."

    •  The New York Times has a story about how vaccines are expected to create a lot of opportunity for socialization:  "Dating app companies confirmed that vaccination has become a hot topic on their platforms. On Tinder, vaccine mentions in user bios rose 258 percent between September and December. 'Those who have gotten the vaccine are using their status as a way to spark conversation with potential matches about their experience,' Dana Balch, a Tinder spokeswoman, wrote in an email.

    "On OkCupid, those who indicate that they have already received the vaccine are being liked at double the rate of users who say that they are not interested in getting the vaccine, according to a spokesman for the app, Michael Kaye.

    'Basically, getting the vaccine is the hottest thing you could be doing on a dating app right now,' Mr. Kaye said, adding, 'What a world we’re living in'."

    At then same time, the Times writes, there is evidence of how privileged folks have decided that their privilege entitles them to jump to the front of the line:

    "Knightsbridge Circle, a luxury travel service in London that charges 25,000 pounds a year for membership, made waves earlier this month when its founder, Stuart McNeill, told The Telegraph that the club would fly members who were 65 or older to the United Arab Emirates to receive privately obtained vaccines. (In Britain, the vaccination is only available through the National Health Service.)

    "Since going public with the offer, the club, which arranges luxury experiences and accommodations for its members, has received more than 2,000 applications for membership and thousands of phone calls, emails and social media requests, according to Mr. McNeill. He also wrote, in response to emailed questions, that his organization has been approached by 'several private jet companies' looking to team with the club to transport the vaccinated.

    "On Friday, his organization announced that it would begin selling vaccines to people who were not previously members of the club for the price of 10,000 pounds per person, as long as individuals are 65 or older — or can prove that they have underlying health conditions. (Knightsbridge Circle will 'ask for proof of this when booking,' a spokeswoman wrote in an email.)

    "The vaccines will come as part of a three-week 'membership package.'  But that package will not include anything beyond the vaccine and transport to and from the airport and vaccination sites. Interested parties will have to book airfare and three weeks worth of accommodations themselves."

    Ten thousand pounds converts to more than thirteen thousand dollars.  And I don't know about you, but I'm not buying for a second that these mercenaries are only going to take money from people of a certain age or with underlying health conditions.  I think they just want to know the check won't bounce.  But I'm a cynic about human nature.

    Published on: January 26, 2021

    •  Amazon announced this morning that it "plans to expand its Boston Tech Hub and create more than 3,000 new corporate and technology jobs over the next several years. The new roles will support teams across the company, including Alexa, Amazon Web Services (AWS), Amazon Robotics, and Amazon Pharmacy."

    The company notes that over the past decade, it "has invested more than $6.2 billion in Massachusetts and created more than 20,000 jobs across customer fulfillment, retail, corporate and technology functions."

    •  VentureBeat reports on how Google has announced "the launch of Product Discovery Solutions for Retail, a suite of services deigned to enhance retailers’ ecommerce capabilities and help them deliver personalized customer experiences. Product Discovery Solutions for Retail brings together AI algorithms and a search service, Cloud Search for Retail, that leverages Google Search technology to power retailers’ product-finding tools … To that end, it includes access to Google’s Recommendations AI, which uses machine learning to dynamically adapt to customer behavior and changes in variables like assortment, pricing, and special offers."

    •  The Wall Street Journal reports that "United Parcel Service Inc. agreed to sell its freight business to rival TFI International Inc. for $800 million, saying it is pulling out of the domestic trucking market to focus on the soaring small-package-delivery business … The agreement announced Monday would allow the business to continue using UPS’s domestic package network for five years to fulfill shipments. TFI, which is based in Canada, provides similar freight trucking services, as well as logistics services and parcel shipping in Canada."

    Published on: January 26, 2021

    •  A few familiar faces will not be advertising on Super Bowl LV, in which the Kansas City Chiefs will face off against the Tampa Bay Buccaneers - Budweiser, Coca-Cola and Pepsi will not be producing ads for the first time in many years.

    According to Variety, "Budweiser will give the money it might have spent on running a Super Bowl commercial to the Ad Council, an industry coalition that produces and places public-service announcements, to help raise awareness of the benefits of getting the coronavirus vaccine."

    However, the story also notes that Anheuser-Busch InBev will "run four minutes’ worth of advertising in Super Bowl LV for Bud Light, Bud Light Seltzer Lemonade, Michelob Ultra, and Michelob Ultra Organic Seltzer."  So it isn't like A-B is going dark for the biggest football game of the year.

    The story notes that "advertisers in the 2021 game face unique challenges. Most consumers probably won’t be attending big parties with friends and neighbors, and ad executives acknowledge they are recalibrating their pitches for viewers sitting in smaller groups and likely enjoying quieter moments. There is also some thought that demand for products usually spurred by the Super Bowl may be tamped down this year."

    •  Chick-fil-A has announced its newest entry in the fast food chicken wars - a Grilled Spicy Chicken Deluxe Sandwich, that it hopes will bolster the company's competitive position as more than a dozen other fast feeders, ranging from Popeye's to McDonald's - have launched their own new chicken sandwiches.

    •  USA Today reports that Coca-Cola is introducing two new coffee-flavored soft drinks:  "Coca-Cola with Coffee and Coca-Cola with Coffee Zero Sugar are available nationwide in ready-to-drink coffee aisles in stores … Coca-Cola with Coffee is available in three flavors – Dark Blend, Vanilla and Caramel – while the zero-sugar, zero-calorie version comes in Dark Blend and Vanilla."

    The story says that "All 12-ounce cans have 69 mg of caffeine while Coca-Cola says the same serving of a Coke has 34 mg and a Diet Coke has 46 mg of caffeine. The average cup of coffee has 95 mg of caffeine."

    •  USA Today reports that "Target has joined Costco and other retailers in dropping Chaokoh coconut milk."  Target "decided to remove products from the Thai supplier (that) People for the Ethical Treatment of Animals (PETA) accused of using monkeys as forced labor to pick coconuts from trees.

    Published on: January 26, 2021

    Yesterday I did a FaceTime commentary about how Sur la Table, having gone through bankruptcy and the closing of most of its stores, now seems to be in the business of putting its stuff on sale - its emails suggest the approach that defined and eventually damaged Bed Bath & Beyond's value proposition.

    Which prompted this perceptive and poetic email from MNB reader Terry Halverson, founder of the great Metropolitan Markets in Seattle:

    One of the biggest pleasures of living in Seattle through a special time over the last number of decades has been watching some of the greatest retailer minds in America develop their vision. Nordstroms, Starbucks, Costco, REI, and many others all started here, in this all to often gray and wet city named in honor of a famous Indian Chief.

    Sur La Table was one of those, starting in Seattle’s famous Pike Place Market by Shirley and Alf Collins. Two food lovers that began with a vision to bring all of the best food preparation tools to the city. The first store is still there after 50 years, just down the street from the first Starbucks location.

    If you found joy being in the kitchen, this was THE place to go. The Collins imported culinary wares from all over the world. Kitchen tools never seen or imagined before in the town known best for building Boeing jets and developing Microsoft software.

    Their store was frequented by everybody that was anybody in the food world. From Julia Child on down, and it was an exciting place to wander and explore for any food aficionado.

    That’s what made Sur La Table special. That’s what made them different. And that’s the horn they should be blowing now.

    Unfortunately the houseware business comes with its challenges. Very high inventory costs, and product that is slow moving. And to create what Sur La Table has done, variety and in stock condition is a requirement. But as you point out, focusing on sale pricing is missing the mark of what makes this retailer different.  It’s about the experience.

    We haven’t seen an explosion of cooking at home like we have today for many years. It’s a very sad product of what’s taking place in the restaurant world today.  And God willing, they will return in full force.

    For Sur La Table, now more than ever is the time to sell the experience of exploring.

    I totally agree with Terry on this - that Sur la Table in Pike Place Market was a store I loved visiting whenever I found myself in Seattle.  (It helped that I had to walk by it on my way to Etta's to spend an evening at the bar eating, drinking and hanging out with Morgan.)

    We referenced a piece yesterday in the Boston Globe about how, even as the city's "darkened storefronts and shuttered restaurants" reflect the impact of the pandemic, there is a different, more nuanced story playing out in the suburbs.

    "Yes, the pandemic has hastened the demise of traditional malls," the Globe wrote.  "But at open-air shopping complexes - those suburban 'lifestyle centers' where the word 'mall' is verboten - commerce has not only carried on, it’s booming. Parking lots are full. Lines snake out of stores."

    I commented:

    I read about those centers "teeming with people" and lines snaking out of various establishments, and I can think about is how important it is that these people wear masks and do all the responsible things necessary to slow the spread of Covid-19.  

    And then I wonder if I'll ever think the same way about crowds … and to what degree these concerns are shared by others.

    MNB reader Harry Post responded:

    I share your view and wonder if I’ll ever look at crowds, lines and crowed events the same way anymore – my thought go exactly where yours did.

    Another MNB reader wrote:

    University Village in Seattle is part of this interesting reshuffle. The children’s playground, and children’s store across from it have both closed, but the restaurants are thriving and parking lots full when we go on the weekends.

    Agree about crowds. I’m still hesitant about going back to trade show life. Masks and hand sanitizer will be with me for a while.