business news in context, analysis with attitude

Published on: June 24, 2021

Scott Moses, managing director at PJ Solomon, just posted an analysis on his company's website that featured a staggering statistic - that virtually every retail format in the food industry has increased store count in the past decade.  Except conventional supermarkets, which are down by some 900 units.  KC's opinion:  Conventional thinking, in all the permutations of those words, is death.

Published on: June 24, 2021

by Kevin Coupe

A quick point this morning, if I may.

There are three stories that I think you should read, because they build on each other and paint a picture of (if GMDC will forgive me for appropriating its phrase) Retail Tomorrow.

There's the piece about a Seattle microhub that allows for more efficient last-mile deliveries.

There's a story about how e-grocery can generate greater customer loyalty and higher sales.

And there's a piece about how Alibaba has developed what it believes is a highly effective and integrated physical-and-digital offering.

Compare those stores, if you will, to the LA Times column about the death of Sears, and even my FaceTime commentary about the decline in conventional supermarkets.

To me, the picture is crustal clear.  And an Eye-Opener.

Published on: June 24, 2021

Amazon's annual Prime Day results - or at least as much as can be gleaned right now - are in, and CNBC notes that while the online retailer pointed to big increases for the third party suppliers that are part of its Marketplace, the public statements lacked the usual "superlatives it typically offers to show how consumers flocked to the site to snap up heavily marked-down goods."

In its announcement, Amazon said that "customers spent over $1.9 billion on more than 70 million small business products during the promotional period, more than a 100% year-over-year increase on sales compared to the Prime Day October 2020 promotion."  Amazon also said third-party Prime Day sales grew more than its first-party retail sales.

However, as CNBC says, "Amazon never discloses total Prime Day sales, but last year it took the rare step of disclosing that third-party sellers brought in $3.5 billion during the event. That figure was also missing from this year’s results."

That said, CNBC also reports that "total online retail sales in the United States during Prime Day were 6.1% higher than transactions generated by the 2020 event, according to Adobe Analytics.

"Online retail sales amounted to $5.6 billion on Monday and $5.4 billion on day two, Adobe said.

"That made Monday the biggest day for digital sales this year and Tuesday the second-busiest, according to Adobe."

Retailers like Walmart, Target, Best Buy, as well as numerous others, all had their own versions of Prime Day, adding to the promotional online frenzy taking place this week.

“There’s a pent-up demand for online shopping as consumers look forward to a return to normalcy,” Taylor Schreiner, director of Adobe Digital insights, tells CNBC. “The halo effect of Prime Day also played a significant role, giving both large and small online retailers significant revenue lifts.”

CNBC writes that "it’s likely that Amazon still hauled in record sales during Prime Day, but growth could be slower compared with previous years."

Published on: June 24, 2021

Fast Company has a piece about how Seattle is "launching a testing ground for a variety of logistics strategies to try and achieve zero emissions in the last-mile portion of delivery.

"Congregating various partners, it’s designed a 'microhub' that will be home to cargo bikes, electric vehicles and pallets, and food trucks. It’s one of the first pilots in the country of its kind to drive a shift to a 'neighborhood-scale delivery model,' as the nature of retail changes. With the city’s department of transportation also on board, it will align with Seattle’s climate goals of reaching carbon neutrality by 2050."

This first microhub has been placed in Seattle's Belltown neighborhood, in a former parking lot that takes up about a quarter of a block.

The test is being run by the University of Washington’s Urban Freight Lab, which produced this video:

Published on: June 24, 2021

Symphony RetailAI is out with new research into the impact of omnichannel shopping habits, saying that "omnichannel grocery shoppers shop more frequently and spend up to 20% more compared to in-store-only shoppers."

In addition, the research shows that while "half of shoppers abandoned the channel after one online purchase, those who remained engaged became more loyal. The data suggests that retaining online and omnichannel shoppers, and encouraging in-store shoppers to make online purchases, will yield long-term loyalty for retailers in the new grocery landscape."

Some data points and analysis from the Symphony RetailAI research:

•  "Of customers making an online purchase in Q1 2021, Symphony RetailAI found that seven out of 10 returned and bought again within the same quarter. This is up from five out of 10 in Q1 2020."

•  "If an online customer returns to the channel seven times in the first three months, they are three times more likely to become a long-term engaged customer. While only one-third of customers are considered long-term engaged, they represent more than half of all online sales, making them four times more valuable."

•  "Online grocery sales doubled year over year. In Q1 2021, ecommerce sales represented 8% of total revenue sales. While this figure may seem small, it has doubled from Q1 2020. Furthermore, online sales contributed 50% of total revenue growth during Q1 2021, up 20% from before the pandemic."

Published on: June 24, 2021

Forbes has a story about how Chinese e-commerce giant Alibaba "now operates more than 200 Freshippo supermarkets across China, which all act as super high-tech supermarkets and online fulfillment centers. The speed and efficiency is second to none – all online orders within a 3km radius arrive within 30 minutes of a shopper completing their purchase."

According to the story, "This foray into bricks and mortar grocery shopping from China’s largest e-commerce retailer presents a state-of-the art, seamless 'phygital' retail experience."

Guo Xulin, chief of staff at Alibaba’s Freshippo Business Group, tells Forbes that "our vision for the future of retail was never digital versus physical, but to build the future infrastructure of commerce, one that seamlessly integrates online and offline."

Published on: June 24, 2021

In the Los Angeles Times, columnist David Lazarus has a piece in which he asks, what happened to Sears?

"I’m not talking about the 2018 bankruptcy of parent company Sears Holdings or the hundreds of subsequent store closures," he writes.  "And I’m not talking about the arrival of e-commerce and the rise of Amazon, although these obviously were body blows to many traditional retailers.

"What I’m talking about is the demise of service at a company that virtually invented the idea of customer loyalty."

You can read the piece here.

Published on: June 24, 2021

•  CNBC reports that "eyeglass brand Warby Parker said Tuesday it has confidentially filed for a stock market listing in the United States.

"The New York-based company said in a press release that its public listing is expected to take place after the Securities and Exchange Commission completes its review process, which is still subject to market conditions."

The story notes that "Warby Parker raised $120 million in its most recent 2020 funding round, giving it a value of $3 billion, according to PitchBook data."

• The Wall Street Journal reports that McDonald's "is rolling out a loyalty program nationally next month, the latest restaurant chain to invest in rewards for repeat customers."  The move follows a successful test in some US markets.

According to the story, "Users will receive points on qualifying purchases that can be traded for items like hash browns, McNuggets, a large frappe or a McChicken sandwich, the company said Tuesday.  MyMcDonald’s Rewards will be available through McDonald’s app at participating restaurants."

Published on: June 24, 2021

•  Kraft Heinz announced that it has hired Kathy Krenger, the former senior vice president of global communications at Hyatt Hotels, to be its new chief communications officer.  She succeeds Michael Mullen, head of global communications and corporate affairs, who is retiring.

Published on: June 24, 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…

•  In the United States, we've now had 34,449,004 total cases of the Covid-19 coronavirus, resulting in 618,294 deaths and 28,846,304 reported recoveries.

Globally, there have been a total of 180,423,378 total cases, with 3,908,728 resultant fatalities, and 165,142,849 reported recoveries.  (Source.)

•  The Centers for Disease Control and Prevention (CDC) says that 65.6 percent of the US population age 18 and older has received at least one dose of vaccine, with 56.1 percent being fully vaccinated.

Published on: June 24, 2021

Content Guy’s Note: Stories in this section are, in my estimation, important and relevant to business. However, they are relegated to this slot because some MNB readers have made clear that they prefer a politics-free MNB; I can't do that because sometimes the news calls out for coverage and commentary, but at least I can make it easy for folks to skip it if they so desire.

•  The House of Representatives Judiciary Committee yesterday approved "far-reaching legislation to curb the market dominance of tech giants, including Alphabet Inc.’s Google and Facebook Inc., but much of the effort faced intensive lobbying by affected firms that slowed the committee’s work and foreshadowed a pitched battle in the Senate," the Wall Street Journal reports.

Then Journal goes on:

"The centerpiece of the six-bill package, a measure to bar big tech companies from favoring their own products in a range of circumstances on their platforms, was approved early Thursday by a vote of 24 to 20. Known as the American Choice and Innovation Online Act, the legislation would prohibit big platforms from engaging in conduct that advantages their own products or services, or disadvantages other business users, or discriminates among similarly situated business users.

"Another measure, passed late Wednesday, requires that the largest internet platforms make it easier for users to transport their data to other platforms and even communicate with users on other platforms. The bill - known as the Augmenting Compatibility and Competition by Enabling Service Switching, or Access, Act - would give the Federal Trade Commission extensive new powers to set individualized standards for the tech giants. It passed, 25-19."

The committee also approved two other bills, "one raising federal fees on corporate merger reviews and another aiding state attorneys general in procedural battles in antitrust court cases."

The story notes that "the bills must still pass the full House, where the timetable for bringing them to the floor for final votes remains unclear. The package would affect large tech firms including Google, Facebook, Apple Inc. and Amazon.com Inc."

Published on: June 24, 2021

…will return.