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    Published on: November 3, 2021

    The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

    Today, Tom and KC consider the mad race by retailers and delivery companies to reduce the amount of time between order and delivery - from two days to one day to two hours to 30 minutes to 10 minutes (and what's next?) - and suggest that timing isn't everything.  There are, Tom says, different kinds of customer purchase journeys, and retailers have to be prepared to innovate around all of them.

    If you'd like to listen to The Innovation Conversation as an audio podcast, click below.

    Published on: November 3, 2021

    The Cincinnati Enquirer reports that Kroger is launching a new membership/loyalty program called Boost that will offer "customers who join double gas points and free deliveries for online orders of $35 or more … The program is tiered: for customers that sign up for a $59 annual membership, the grocer will give them the enhanced gas points and free delivery within 24 hours; for $99 per year, members get the gas points and free delivery in as little as 2 hours."

    The story says that Boost is "being introduced in Greater Cincinnati as well as stores throughout Atlanta, Columbus and Indianapolis regions," and will "expand to other parts of the country next year."

    Bill Bennett, Kroger’s vice president and head of e-commerce, describes Boost as "an accelerant.  Through Boost, Kroger remains uniquely positioned... making grocery delivery accessible to every customer through the industry’s most affordable free delivery membership."

    KC's View:

    This strikes me as really important at a time when Kroger is testing out its own approach to pure-play e-commerce retailing, moving delivery offerings into markets like Florida and the northeast US where it does not have bricks-and-mortar stores.  If it can prime the consumer pump by turning shoppers into members, and providing them with more and more reasons to come back to Kroger time and again, it has the potential to be transformative.

    Seeing customers as just shoppers is fine, but it acknowledges the simple fact that these people and their consumption habits are in play.  But if you can convert them to members … well, you take them out of play at least to some degree. And you make yourself, hopefully, the shopper's first and often best choice.

    Published on: November 3, 2021

    WTOP-TV News reports that Ahold Delhaize-owned, Landover, Maryland-basedGiant Food "is piloting a program at three D.C.-area stores with Toronto-based Flashfood to sell food it might otherwise have to throw away soon at a deep discount … Items placed in the Flashfood Zone cases are nearing their 'best by' or 'sell by' dates, which often underestimate how long grocery items remain fresh, edible and safe, but retailers generally discard items that reach those dates."

    The program is being tested at three Giant Food stores, in Catonsville, Maryland, Ellicott City, Maryland, and Falls Church Virginia.

    “Instead of throwing the food out, they mark the price down 50% off, we send a notification out to our users who see the deal through their phone, pay through their phone and pick their items up that day at their store. So we basically took the discount rack, made it look sexy, and put it on your cell phone,” said Flashfood founder and CEO Josh Domingues.

    Estimates are that $37 billion worth of food is thrown out at the retail level globally each year, the story notes.

    KC's View:

    This is smart for environmental reasons, but at a time of inflation and product shortages, a program like this makes even more sense.  Good move by Giant.

    Published on: November 3, 2021

    Axios reports that the US Department of Justice has filed suit to prevent publisher Penguin Random House from acquiring, for more than $2 billion, rival publisher Simon & Schuster.  The DOJ cites antitrust concerns in opposing the deal;  its position may reflect a greater emphasis by the federal government in opposing mergers and acquisitions it perceives as being anti-competitive, which could affect its attitude toward retailers and big tech companies.

    The Axios story says that "the DOJ said Penguin Random House, America's largest book publisher, would have 'outsized influence' over which books are published in the U.S. and how much authors are paid if it's allowed to absorb Simon & Schuster … The Justice Department said the deal would put Penguin Random House in control of close to half the U.S. market for acquiring publishing rights to anticipated top-selling books, leaving authors with fewer options and less leverage."

    “The complaint filed today to ensure fair competition in the U.S. publishing industry is the latest demonstration of the Justice Department’s commitment to pursuing economic opportunity and fairness through antitrust enforcement,” Attorney General Merrick Garland said in a statement.

    The two publishers pledged to fight the suit in court.  "Blocking the transaction would harm the very authors DOJ purports to protect. We will fight this lawsuit vigorously and look forward to PRH serving as the steward for this storied publishing house in the years to come," Penguin Random House and Simon & Schuster said in a joint statement.

    KC's View:

    I have no problem with a nuanced and activist approach toward antitrust as long as that approach reflects an accurate understanding of how business works, or at least how it should work.  There are times when mergers, such as the proposed deal between Staples and Office Depot, have been blocked because of antitrust concerns, but I've argued here that this represented a fundamental misunderstanding of how retailing works in America today.

    Published on: November 3, 2021

    Kroger said yesterday that it is collaborating with Bed Bath & Beyond "to directly offer Kroger customers an extensive selection of the most sought-after goods for the home and baby products carried by Bed Bath & Beyond Inc. through as well as a small-scale physical store pilot at select Kroger Family of Stores beginning in 2022 … The multi-category omnichannel collaboration will include popular items – from bedding and storage to baby furniture and gear – from Bed Bath & Beyond and buybuy Baby's assortment, including the company's exclusive Owned Brands as well as national brands."

    Kroger CEO Rodney McMullen said in a prepared statement that "this strategic online collaboration and in-store pilot will provide Kroger shoppers easy access to essential home and baby products alongside their favorite grocery staples – continuing to fulfill our commitment of providing our customers with anything, anytime, anywhere."

    Published on: November 3, 2021

    FMI-The Food Industry Association this morning released its 2021 holidays shopping projections, which it describes as " a comprehensive report on the impact of COVID-19 on U.S. grocery shopper perceptions and behaviors heading into the busy holiday season.

    "The report finds that despite concerns surrounding the availability and cost of favorite holiday foods due to lingering post-pandemic supply chain and inflation issues, most shoppers plan to celebrate the holidays much the same as they did before the pandemic, albeit while shopping early and observing relaxed but persistent social distancing measures when getting together with friends and family."

    Some excerpts:

    •  "The report reveals that while 58% of shoppers expressed some concern about being able to purchase groceries they need for holiday meals, that sentiment hasn’t changed since the summer, suggesting that consumers aren’t overly concerned with reports of product shortages this winter. To mitigate potential supply chain issues, 18% of shoppers indicate they will plan further in advance when shopping for their Thanksgiving meals this year than they usually would."

    •  "Despite concerns about inflation, average household grocery spending has held steady at about $144 per week, which is down from the $161 per week witnessed at the height of the pandemic last year."

    •  "The report also finds that 76% of shoppers were satisfied with their primary grocery store’s response to the pandemic, with over half of shoppers trusting their primary food store for helping them stay healthy."

    FMI says that "while most shoppers said they expect to celebrate the holidays the same as before the pandemic, roughly half of shoppers say that COVID-19 will have an impact on how they celebrate upcoming holidays, with some noting they plan to hold smaller gatherings, watch events like sports and parades from home, and enforce social distancing rules."

    Published on: November 3, 2021

    The Associated Press reports that in a statewide referendum yesterday, Maine voters passed what is called "the nation's first 'right to food' constitutional amendment," declaring that "all individuals have a natural, inherent and unalienable right to grow, raise, harvest, produce and consume the food of their own choosing for their own nourishment, sustenance, bodily health and well-being."

    The AP provides some context for the new constitutional guarantee:

    "Supporters used the campaign to make the case the amendment would ensure the right to grow vegetables and raise livestock in an era when corporatization threatens local ownership of the food supply. They positioned the amendment as a chance for Mainers to wrestle control of the food supply back from large landowners and giant retailers with little connection to the community.

    "Opponents cast the drive as deceptively vague. They also said it represented a threat to food safety and animal welfare, and could encourage residents to try to raise cows in their backyards in cities like Portland and Bangor."

    The story notes that the amendment "was the result of effort by members of the state’s food sovereignty movement. The movement includes small farmers, raw milk fans, libertarians, liberals and anti-corporate activists who all feel local communities should have more of a say in the future of the food supply."

    KC's View:

    I have to be honest about this one - I have absolutely no idea how I might've voted on this referendum.  I like the idea of people being able to grow their own food and resist corporatization, but I'm not crazy about cows in my neighbor's backyard.

    Published on: November 3, 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, there now have been a total of 46,999,771 cases of Covid-19 coronavirus, resulting in 768,847 deaths and 37,009,990 reported recoveries.

    Globally, there have been 248,431,166 total coronavirus cases, with 5,031,919 resultant fatalities and 225,103,843 reported recoveries.   (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 78.2 percent of the US population age 12 and older has gotten at least one dose of vaccine, with 67.9 percent of that group being fully vaccinated.  In addition, the CDC says, 66.9 percent of the total US population has gotten at least one dose of vaccine, with 58.1 percent b being fully vaccinated.

    The CDC also says that 25.6 percent of the US population age 65 and older has received a vaccine booster shot.

    •  Axios reports that "CDC director Rochelle Walensky endorsed a two-dose series of Pfizer-BioNTech's COVID-19 vaccine for kids 5-11, marking the final step in the approval process that makes coronavirus vaccines available to younger children as soon as Friday … The CDC panel's endorsement comes on the heels of the Food and Drug Administration's authorization of the Pfizer vaccine for the age group on Friday.  Each of the shots administered to kids 5-11 will be about a third of the size of the adult dose."

    Published on: November 3, 2021

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  CNet reports that "Amazon has relinquished more than $61 million to settle claims by the Federal Trade Commission that it withheld tips from over 140,000 of it Amazon Flex drivers for more than two years. And now the agency is sending the settlement money to the drivers, the FTC announced Tuesday. 

    "The FTC alleged in a lawsuit it filed earlier this year that Amazon had secretly withheld some tips from drivers starting in 2016 and only stopped the practice in 2019 when it learned of the FTC investigation.

    "'The highest amount going to a single Amazon Flex driver is more than $28,000, while the average amount is $422,' the FTC said.

    "Amazon Flex drivers are contractors who use their own vehicles to deliver groceries and other items for the Amazon Fresh and Prime Now services."

    •  Axios reports that "social media giants are sprinting towards the live shopping market that's long been dominated by traditional television networks like QVC and HSN  … Pinterest on Monday launched Pinterest TV, a video platform with live series and original content featuring Pinterest creators hawking goods … Instagram introduced live shopping in September via the Instagram Feed, Instagram Stories, Instagram Video and Reels, Facebook's TikTok knock-off.

    "TikTok rolled out a live shopping feature in September that lets brands include links to products in live videos.

    Snapchat debuted its first 'shoppable' original show in 2020. 'Art of the Drop' lets users buy streetwear via a hybrid of entertainment and commerce video series.

    "Amazon launched Amazon Live, a livestream app for creators to hawk goods to followers in July 2020."

    It was Robert Louis Stevenson who once said, "Everybody lives by selling something."  In the case of the social media companies, it is more a matter of looking for new ways to a) keep people addicted to their sites, and b) creating new revenue streams.

    Published on: November 3, 2021

    •  Save A Lot yesterday announced that it is selling "six company-owned stores in Dallas, Texas, and Jacksonville, Florida, to Yellow Banana, LLC as part of Save A Lot’s ongoing efforts to convert corporate-owned stores to local ownership … This news follows Yellow Banana’s September 2021 purchase of 32 Save A Lot stores in the Cleveland, Chicago and Milwaukee metropolitan areas, and brings Yellow Banana’s total Save A Lot store count to 38 stores in five states."  

    Terms of the deal were not disclosed.

    •  USA Today reports that one of the problems being created by supply chain shortages could be a shortage of glass bottles, which people in the wine business say is a major concern going forward in the near future.

    “If you don't have the bottles that you need, how are you going to get the product out of barrels and to customers?” says Michael Kaiser, vice president of government affairs at WineAmerica, who adds that "the shortages come at a time when many winemakers have just harvested this season’s grapes."

    •  National Retail Federation (NRF) Chief Economist Jack Kleinhenz yesterday said that the pandemic will continue to have an impact on the nation's economy, but that NRF remains "confident in its forecast for record growth" - that "2021 holiday retail sales during November and December will grow between 8.5 percent and 10.5 percent over 2020 to a total between $843.4 billion and $859 billion."

    “There are several factors coming together to have a major impact on the holiday outlook, but household fundamentals are a bright spot in the uncertain present,” Kleinhenz said. “Consumers are in a very favorable position going into the last months of the year and are spending because they can.”

    Working to the economy's advantage, Kleinhenz said, "a 'savings buffer' of about $2.5 trillion accumulated by consumers who have largely stayed home rather than dining out or traveling during the pandemic has 'supercharged' spending. In the meantime, income is growing in the form of more jobs, more hours and higher wages reflecting businesses’ competition for workers during the current labor shortage. Household wealth hit another record high during the second quarter (the latest data available) and has boosted consumer confidence … Kleinhenz said the strong growth in income and 'stockpiled savings' should help spending overcome inflation that has been driven both by consumer demand and supply chain disruptions. The challenge when – and if – sales begin to fall will be whether the drop is caused by weaker demand or reduced product availability."

    Published on: November 3, 2021

    •  Kroger announced yesterday that it has named Tammy DeBoer, currently Harris Teeter's senior vice president of merchandising, operations, and marketing, to be the division's new president, succeeding Rod Antolock, who is retiring after 22 years with the organization.

    Published on: November 3, 2021

    We've had an ongoing discussion here about products that present themselves in a way that some believe is deceptive - like not having the kinds of ingredients that the packaging might suggest.  There was criticism from Los Angeles Times business columnist David Lazarus of Special K Fruit & Yogurt cereal that prominently features berries on the box even though there are none of these items in the cereal.

    MNB reader Dave Jones responded:

    Regarding Truth in Labeling – Mr. Lazarus and others need to take a hard look at everything around them prior to bashing consumer packaged goods food shots. The packages all are noted – “Serving Suggestion” or “Enlarged to show product detail” right on the front of the packages. Does Lazarus really think the seasoning packet he buys for steak with a picture of the seasoning on a steak entitles him to receive the steak? How about a pouch of Tuna with the tuna shown on a salad does he receive the salad as well?  A mug of cocoa on cocoa mix – where’s my mug shown on the package?  When you bought your convertible were there any influences of commercials or magazine images showing how cool convertible owners are that swayed your opinion?  Did you feel cheated if you weren’t as cool as those images?   

    There needs to be more truth in everything in life vs the image portrayed.

    I think there's a difference between how a product is presented in packaging and whether or not it actually contains the ingredient that is featured.  If a can of tuna fish actually contains another fish, is that deceptive labeling?  Or within the realm of the acceptable?  I think that's different from a pouch of tuna that doesn't actually have inside it the salad makings shown on the packaging.

    Also, just for the record, my convertible instantly made me appear to be much cooler than I actually am.  I have no complaints about that.

    MNB reader Dan Hamilton wrote:

    My beef with truth in advertising is the fast food joints that show you a mile high, hot burger, chicken sandwich, etc on tv but in reality what you get is nothing like what they advertise or pictured on the menu board.  When was the last time you got a burger with the patty larger than the bun....never!  Recent chicken sandwich war among the fast feeders are advertising a chicken patty that overwhelms the bun....what a farce!  Liar liar pants on fire!

    Yesterday Michael Sansolo contributed a column about what happened when the Atlanta Braves installed a soft-serve ice cream machine in the clubhouse.  (Hint:  The Braves won the World Series tonight.)

    Michael wrote, in part:

    Managers of all teams - especially in your stores and companies - can learn from this. The soft service ice cream machine was a small, seemingly meaningless gesture. But as the reporting of this dramatic sporting turnaround demonstrates, the machine did so much more.

    In many ways it demonstrated management’s recognition of the players’ efforts and the importance of creating some fun and spirit, along side the work at hand. In that way, the machine was anything but a small gesture. It mattered because of what it meant.

    One MNB reader wrote:

    Hi Michael, loved your story about the Atlanta Braves and the soft serve machine. A day without soft serve is a day without sunshine, as Stew Leonard well knows. And as any Ted Lasso fan knows, it’s the little things that make the difference. It’s fixing the showers that begins the Lasso turnaround with AFC Richmond. And yes, AFC Richmond is as real to me as the Atlanta Braves.

    But, demonstrating that you cannot please all the people all the time, another MNB reader wrote:

    Since when did Sansolo start to channel Ted Lasso?   Just like ball players do before each game;  this is a stretch!  

    Published on: November 3, 2021

    Last night the Atlanta Braves defeated the Houston Astros 7-0, winning the Major League Baseball World Championship four-games-to-two in the best of seven World Series.

    The title was the Braves' first since 1995, and capped an improbable rise - the Braves, with just 88 wins inn the regular season,  barely registered in post-season predictions as late as mid-summer, and came out of the National League East, easily the weakest division in baseball.