The other day KC talked about how it was important for retailers to have differentiated offerings so good and so unique that people would drive miles to get them. He used BBQ chicken as an example, but got some pushback. But KC's sticking to his guns on this one … using as an example a lobster roll he drove more than 50 miles to get.
Kroger announced this morning that it is piloting a new program that will "offer grocery delivery via autonomous drones, expanding the retailer’s seamless ecosystem and providing customers with anything, anytime, anywhere."
The pilot will commence this week near the Kroger Marketplace store in Centerville, Ohio, with flights "managed by licensed Drone Express pilots from an on-site trailer with additional off-site monitoring." Actual deliveries will begin later this spring.
A second pilot is scheduled to launch later this summer at a Ralphs store in California.
According to the announcement, "The pilot will offer customers unparalleled flexibility as Drone Express technology allows package delivery to the location of a customer’s smartphone not only to a street address, simply meaning a customer will be able to order delivery of picnic supplies to a park, sunscreen to the beach, or condiments to a backyard cookout, for instance.
"Kroger is designing bundled product offerings ideal for meeting customer needs within the current weight limits for drone delivery, which is about five pounds. As an illustration, Kroger will offer a baby care bundle with wipes and formula, a child wellness bundle with over-the-counter medications and fluids, and a S’mores bundle with graham crackers, marshmallows, and chocolate."
The pilot program is being implemented in partnership with Drone Express, a division of TELEGRID Technologies.
""Kroger’s new drone delivery pilot is part of the evolution of our rapidly growing and innovative e-commerce business – which includes pickup, delivery, and ship and reached more than $10 billion in sales in 2020,” Jody Kalmbach, Kroger's group vice president of product experience, said in a prepared statement. “The pilot reinforces the importance of flexibility and immediacy to customers, powered by modern, cost effective and efficient last-mile solutions. We’re excited to test drone delivery and gain insights that will inform expansion plans as well as future customer solutions."
There are a bunch of things about this story that strike me as interesting.
First, I have to admit that the acceleration of the drone trend has caught me a little by surprise. I've always subscribed to the notion that innovations like these generally happen a lot faster than we expect, but i've been sort of unsure about drones - there certainly are places and times when it seems like they might be appropriate, but I've always sort of wondered if they are more a bright, shiny object than a practical delivery option. But I think I may be wrong about that - Kroger, which these days seems focused on taking big swings, clearly thinks so.
I have to wonder if all the Customer Fulfillment Centers (CFCs) Kroger is building with Ocado are going to come equipped with launch/landing pads for drones. This story also makes me think that maybe Micro-Fulfillment Centers (MFCs) ought to be built with drone deployment in mind - not necessarily for immediate use, but eventual.
This is more incidental, but I also found it interesting - and certainly worth noting - that Kroger's partner in this project, TELEGRID Technologies, is described in the announcement as "a woman-owned small business founded in 1984." Since female representation in STEM (Science, Technology, Engineering, Math) fields is often seen as being less robust than would be ideal, I think it is terrific that this is the company with which Kroger is doing business.
Finally … and least important … I have to admit that since learning of Kroger's new drone program, I've been humming/singing one song. I just can't get it out of my head:
CNBC notes that Amazon's plan to move its Prime Days promotion into June this year - about a month earlier than its traditional placement - suggests that it "could be looking to soften the comparisons it will face as it laps the stay-at-home lockdowns of last spring, when business boomed." Amazon almost certainly is looking "to boost spending in what is normally a slower time in the retail calendar."
The story notes that "the company has yet to confirm the specific date. The two-day shopping extravaganza originally has been held in July, but Amazon said it will now take place in its second quarter, implying a June event."
CNBC notes that "the two-day shopping extravaganza has usually prompted rivals like Walmart and Target to offer competing sales."
This last sentence strikes me as one of the more interesting of the story, since it trains the spotlight on who is leading and who is following.
In some ways, it might've been a more interesting development if Walmart and/or Target had decided to make a preemptive move on Amazon by scheduling their versions of Prime Day in June, forcing Amazon to move up its plans. And maybe there still is time for either or both of them to schedule a "Let's Make Memorial Day Weekend Really Memorable" promotion that will look to undercut Prime Day's impact.
MarketWatch reports that CVS Health is launching a new venture capital fund called CVS Health Ventures that is designed to invest in and partner with "early-stage companies focused on making healthcare more accessible and affordable. Starting with $100 million, the initial focus will be on tech-enabled and digital healthcare companies."
The story says that CVS says it already has made such investments "through both the CVS and Aetna businesses, including Unite Us, a program that links healthcare and social service providers. CVS also announced … that it has started to administer COVID-19 vaccines through employer-based vaccination sites."
Smart move, and one of the things that has distinguished CVS in recent years - a firm positioning as part of the health care continuum. I'm not always enamored with how its stores deliver on this promise; I think it can be inconsistent. But it has a goal, and keeps making progress.
The New York Times reports on what it calls "a grudge match between one of Japan’s most powerful companies and, arguably, one of its most stubborn men," which has resulted in two 7-Eleven stores on a single corner in Osaka.
"Mitoshi Matsumoto, a franchisee, ran one of the two 7-Elevens until the chain revoked his contract in 2019 after he dared to shorten his operating hours. For over a year, his store has sat empty as he and 7-Eleven have battled in court over control of the shop. Fed up and with no end in sight, the company decided on a stopgap: It built a second shop in what used to be Mr. Matsumoto’s parking lot.
"The conflict’s outcome will determine not just who gets to sell rice balls and cigarettes from one tiny patch of asphalt and concrete. It could also have profound implications for 7-Eleven’s authority over tens of thousands of franchise shops across Japan, part of a convenience store network so ubiquitous that the government considers it vital to the national infrastructure during emergencies."
The fight, the Times writes, "playing out in an Osaka courtroom will have ramifications for 7-Eleven and the rest of Japan’s major franchises, which control the vast majority of the country’s more than 50,000 convenience stores. 7-Eleven accounts for nearly 40 percent of those, and its business practices, for better or worse, have long been viewed as the industry standard."
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…
• Here are the US Covid-19 coronavirus numbers: 33,180,441 total cases … 591,062 deaths … and 25,823,800 reported recoveries.
The global numbers: 153,565,239 total cases … 3,218,006 fatalities … and 130,919,428 reported recoveries. (Source.)
• The Centers for Disease Control and Prevention (CDC) is reporting that more than 144 million Americans age 18 or older, or 56.1 percent of that group, have gotten at least one dose of the vaccination, with more than 104 million, or 40.3 percent, are now fully vaccinated.
"Early in the pandemic, when vaccines for the coronavirus were still just a glimmer on the horizon, the term 'herd immunity' came to signify the endgame: the point when enough Americans would be protected from the virus so we could be rid of the pathogen and reclaim our lives.
"Now, more than half of adults in the United States have been inoculated with at least one dose of a vaccine. But daily vaccination rates are slipping, and there is widespread consensus among scientists and public health experts that the herd immunity threshold is not attainable — at least not in the foreseeable future, and perhaps not ever.
"Instead, they are coming to the conclusion that rather than making a long-promised exit, the virus will most likely become a manageable threat that will continue to circulate in the United States for years to come, still causing hospitalizations and deaths but in much smaller numbers.
"How much smaller is uncertain and depends in part on how much of the nation, and the world, becomes vaccinated and how the coronavirus evolves. It is already clear, however, that the virus is changing too quickly, new variants are spreading too easily and vaccination is proceeding too slowly for herd immunity to be within reach anytime soon.
"Continued immunizations, especially for people at highest risk because of age, exposure or health status, will be crucial to limiting the severity of outbreaks, if not their frequency, experts believe … The shift in outlook presents a new challenge for public health authorities. The drive for herd immunity — by the summer, some experts once thought possible — captured the imagination of large segments of the public. To say the goal will not be attained adds another 'why bother' to the list of reasons that vaccine skeptics use to avoid being inoculated.
"Yet vaccinations remain the key to transforming the virus into a controllable threat, experts said."
• The Washington Post reports that Saturday marked " the end of a pandemic era in the air: no more social distancing on flights.
"Delta was the final holdout, ending its practice of blocking middle seats on Saturday. That is more than a year after the airline first introduced the practice as the coronavirus cratered the number of air travelers.
"Other major U.S. carriers have long since returned to full flights. American and United starting selling all their seats last summer. Southwest started doing the same in December, and Alaska Airlines and JetBlue followed in January."
• Instacart announced that it is expanding its EBT SNAP payment integration to include three new retailers – Publix, The Save Mart Companies, and Price Chopper/Market 32 – a move that will expand availability by more than 1,500 stores in 15 states.
The expansion will mean that Instacart will offer EBT SNAP for online grocery delivery and pickup in more than 4,000 stores across 38 states and Washington D.C.
• The New York Times reports that "European Union regulators on Friday accused Apple of violating antitrust laws by imposing unfair rules and fees on rival music-streaming services that depend on the App Store to reach customers … The case announced on Friday is part of a broader effort by the European Union to clamp down on so-called gatekeeper companies like Apple, Amazon, Facebook and Alphabet. Policymakers are drafting laws that would prevent the tech giants from abusing their market power to harm smaller companies, including how they manage app stores."
According to the story, "Amid growing scrutiny of the tech industry worldwide, the case will be an important test of a government's ability to force one of Silicon Valley’s most powerful companies to change its behavior. Europe is seen as a global bellwether on tech policy, but Apple has vowed to fight the charges."
The Times writes that "Apple says tight oversight of the App Store ensures customers download high-quality apps, protecting users from viruses, fraud and buggy software. But companies including Spotify, the music streaming service that filed a complaint two years ago that set off the European Union’s investigation, have grown frustrated with its powerful position. They argue it allows Apple to undercut competitors to services like Apple Music and charge an unfair tax on developers.
"The European Commission, the executive arm of the 27-nation bloc, agreed with Apple’s opponents. Authorities zeroed in on requirements that rival music platforms use Apple’s payment system, forcing them to give Apple a percentage of their subscription fees. The rules have the effect of driving up prices, regulators said, because companies are prevented from offering cheaper payment options and pass on Apple’s fees to customers."
• ABC News reports that "dozens of union drivers and mechanics for Shaw's in Maine went on strike Monday morning.
"Teamsters Local 340 represents more than 70 employees who work in Scarborough and Wells. Employees in both locations walked out Monday.
"The union voted in November to authorize a strike after saying contract negotiations with management had broken down following 13 meetings. A federal mediator had been called in to help. Sticking points in contract talks included health insurance, retirement and sub-contracting."
• The Wall Street Journal writes about how a surging economy could be stifled by supply chain issues that were created and/or exacerbated by the pandemic.
"Consumers are splurging on cars and furniture - and facing extended waits for delivery," the Journal reports. "Restaurants and gyms are reopening - and struggling to find workers. Factories and home builders are trying to ramp up - but are short on semiconductors or raw materials.
"Federal Reserve officials and most economists largely play down supply and cost problems as transitory, saying they aren’t widespread enough to threaten corporate profits or the broader U.S. economy for long, especially amid strong sales. But problems are acute for some individual businesses and even entire industries."
One of the biggest problems seems to be in the supply of labor: "U.S. job openings have already recovered to pre-pandemic levels, despite some eight million fewer jobs in the economy, and 42% of surveyed companies have told the National Federation of Independent Business, a small business trade group, that they have at least one open position that has proved hard to fill—the highest level ever, noted Sarah House, a senior economist with Wells Fargo’s corporate and investment banking unit."
• Weis Markets announced a planned investment of $135 million in its growth during 2021, with chairman-president-CEO Jonathan Weis saying that "the company continues to invest in new stores, remodels, fuel centers, information technology upgrades and more than a thousand smaller store improvement projects."
"Already this year, we've opened a new store in Martinsburg, West Virginia and a remodeled store in Gap, Pennsylvania, which was closed for 18 months due to a fire," Weis said. "We are currently finishing up work on two stores in the Lehigh Valley, Pennsylvania, which will open later this spring, and have started work on a new store in Warminster, Pennsylvania, our second in Bucks County."
The company plans eight remodels and eight fuel centers in 2021.
• CNBC reports that "Nestle has bought the main brands of vitamin and supplements maker The Bountiful Company for $5.75 billion … the latest expansion of its health and nutrition business."
“This acquisition complements our existing health and nutrition portfolio in terms of brands and channels,” said Greg Behar, CEO of Nestle Health Science, in a prepared statement. "It will establish Nestle Health Science as the industry leader in mass retail, specialty retail, e-commerce and direct-to-consumer in the U.S., while offering significant opportunities for geographic growth."
MNB last week reported on a new NielsenIQ Omnichannel Shopping Fundamentals Survey, concluding that consumers are making delivery speed their top priority when placing online orders.
MNB reader Julia Ann Mataras responded:
I think that this is a function of being young. When young, we have the tendency to wish our lives away. Hurry, hurry. Whether it’s because we have 9 baseball games to attend that week for our sons, or whether we have to assist with a history project at the last minute, or visit all the grands on a holiday. Now that I am 65, I am perfectly content to wait and not hurry. Probably because I don’t want to hurry the end of my life.
That being said- I also think that waiting for anything to be delivered means that you have to plan ahead. If there is no time to do that (as I said above there is no time when you are young with a family to plan ahead), then the “need for speed” is essential.
Thanks for always making me think.
There was a New York Times story the other day about how consumers should expect prices to go up in coming months, as a receding pandemic makes it more palatable for manufacturers to raise their prices because of rising commodity costs, and retailers feel empowered to pass those increases on to shoppers as opposed to absorbing them.
There was one line from the story:
"Before the virus hit, retailers often absorbed the cost when suppliers raised prices on goods, because stiff competition forced retailers to keep prices stable."
This set off one MNB reader:
I don’t know of ANY retailer that absorbed costs when suppliers raised prices, except, in the own brands arena. So for that, the statement may be true. But, as a broad stroke statement, it is categorically false. I am not saying this is a leftist conspiracy. I am saying that the Times does not go the extra step to tell the entire story. Instead, they just select a narrative that paints retailers in a good light and manufacturers in a bad one. Just getting tired of these half-truths.
On the subject of our coronavirus coverage, MNB reader Jerome Schindler wrote:
I wonder if the anti-vaxxers are having second thoughts when seeing the crisis in India. Those of us who are abiding by the best advice currently known being given by the scientific community are protecting the anti-vaxxers as well as ourselves. But many more lives are being lost and the end of the pandemic pushed further into the future by those deniers who refuse vaccination, masking and social distancing recommendations.
Some people suffer and die due to gunshots, others are suffering and dying due to people who elect to ignore these recommended practices. Thou shall not kill is a broader concept than just homicide.
I did a piece last week about how food trucks are now catering weddings and other events, prompting one MNB reader to write:
NYC has different kind of Food Trucks.
We might see these at Weddings too….
Appetizers for the Reception?
You never know.
Another MNB reader wrote:
Our masonic lodge has been using a food truck vendor for our Fish Fry events for several years. They do a better job than we could ever do ourselves, in our own kitchens. The food is better and they are organized.
We also had a story the other day about how in some states it has become legal to compost human remains.
One MNB reader wrote:
Composting human remains….Soylent Green.
And from another reader:
I’ve told my wife I wanted my ashes thrown in the compost pile. Her reply always has been I will be buried regardless of my wishes. I never thought of being composted without being cremated first. It seems that it would be a slower process to compost human remains than yard waste, but then again this isn’t for the home gardener. I’m guessing this would be used for medical waste and John Does.
Last week we took note of a Washington Post report that the nation is in the middle of a chicken shortage - and not just the wing shortage that many were anticipating.
It seems, the Post wrote, that "the poultry paucity has arrived, heralded by a series of fast-food executives describing in earnings calls their stores’ struggles to stock enough chicken - nuggets, tenders, wings, patties, all shapes and sizes - to keep pace with legions of peckish Americans."
Would this be a cluster-cluck?
One MNB reader responded:
Thank you for the humor. It helps mitigate through all the muck!!
And finally, this note from a caring MNB reader:
Whoever is trying to bring you down, is already below you.
Everything comes to you the right time, Be patient and trust the process.
I never think of the disagreements we sometimes have here on MNB as people trying to bring me down. We're just having a free and largely respectful exchange of ideas. And trying to have some fun.