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    Published on: January 12, 2022

    The continuing 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 talk about BMW's new technology that will allow car owners to change the color of their vehicle at the touch of a button - a development that tells us much about where personalization and customization are going.  However, they also suggest that there are ways to achieve this kind of innovation without investing in such high-high tech initiatives, but that can differentiate a smart and ambitious retailer.  And, they talk about the implications of a possible Instacart move to deploy small, mobile "dark stores" to service specific neighborhoods.

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

    Published on: January 12, 2022

    More than 8,000 unionized workers at kroger-owned King Soopers in the Denver market went on strike this morning.

    Kroger called the walkout "reckless and self-serving," and promised to keep the stores open through the use of temporary workers And employees brought in from other parts of the country.

    The Wall Street Journal writes this morning that "union officials representing Kroger workers declined to comment on Wednesday. They have previously said they want to secure a new contract with better wages, health and retirement benefits, and to ensure a safer work environment for employees at a time when Kroger is generating higher profits. They said Tuesday that going on strike was the only way to get fairer terms after the company had offered unsatisfactory proposals throughout the past few months of negotiations."

    KC's View:

    Kroger has said that it wants an agreement that will both benefit workers and keep prices down for consumers, but I have to imagine that this is something of a tightrope - it wants to keep costs down for shoppers at a time when inflation is as high as it has been in decades, but in the end, the employees also are shoppers dealing with inflation;  workers' expectations, whether reasonable or unreasonable, are being shaped by what they encounter when they buy groceries or gas, pay their rent, or try to clothe and school their children.

    It is a toiugh argument, both ways ... but I have to believe that this will be a short-lived labor action. It doesn't serve anyone's interests for this to drag on.

    Published on: January 12, 2022

    Walmart is announcing today that it is launching a new tool, developed by Sifter, to allow its customers to Shop-By -Diet, both online and in-store.

    According to the announcement, "Walmart customers will be able to discover and shop for foods based on allergens such as nuts or dairy; medical diets such as diabetes and heart health; and dozens of lifestyle diets, from vegan to keto to kosher. Shoppers also can use the Shop-by-Diet tool to sort through products based on responsible practices like grass-fed, or find products that won’t interact with medications."

    Customers will be able to scan product and instantly find out if it is a match for his or her wellness goals.  There's an established need for such a system:  "More than 200 million consumers are said to be adhering to a diet or health-related program, while 180 million are reported to have allergies or food avoidances when shopping."

    The launch is a big "get" for Sifter, which was developed by pioneering grocery e-commerce entrepreneurs Andrew and Thomas Parkinson, founders of Peapod, who define Sifter as "a powerful Nutrition as a Service platform for the millions of consumers who avoid food allergens or follow a special health diet … Using a proprietary, science-based 'sifting' technology with 130+ diet and nutrition filters, the free, interactive site allows users to find food products and dietary supplements based on their personal diet needs and preferences."

    KC's View:

    I had the opportunity to have an extended, two-part conversation with  Andrew and Thomas Parkinson about a year ago, in which we talked about Sifter and the state of e-commerce in the supermarket business.  You can go back and see the stories here and here.

    I really like this idea, especially as it is being rolled out at Walmart.  It makes so much sense, in fact, that I find myself wondering why nobody has done it before.  Every retailer with an online presence ought to be looking for ways to create this kind of functionality both in-store and online - it is the very definition of empowering consumers.

    By the way, retailers also ought to be figuring out how to use their data to make sure that consumers only get relevant advertising and promotional materials.  There is no excuse in 2022 for someone who is an Orthodox Jew ever to get an ad for pork chops, or someone who is gluten-free ever to get an ad for bread, or someone who is lactose-intolerant ever to get an ad for whole milk.  When those things do happen, as they often do, all it communicates to shoppers is that the retailer doesn't really know them.

    To learn more about Sifter, visit Sifter.shop (consumer site) and Sifter.solutions (business applications).

    Published on: January 12, 2022

    ShopRite announced that it is "the first grocer on the East Coast to unveil the new QuickCollect GO! POD, where shoppers can pick up their online ShopRite grocery orders from a temperature controlled outdoor pickup pod for a fast and easy, contactless self-service pickup experience."  The pod is described as "a smart grocery retrieval system that can hold ambient, refrigerated and frozen foods, and customers’ entire grocery orders are available for pickup in one solution. This free-standing pod now available at the ShopRite of New Rochelle offers customers unprecedented convenience for retrieving their online pickup orders."

    The technology includes "robotic automation that allows secure delivery and retrieval of online orders anytime. The first totes start dispensing to the guest in under one minute, reducing the wait time for customers picking up their online orders … When items are ready, customers receive a text containing a QR code to scan on the console screen, which brings the order to the customer pickup portal, allowing them to access their pre-ordered groceries. The intuitive interface and consumer-focused designs facilitate contactless, fast and easy experiences."

    KC's View:

    It is a great concept that ought to allow adopting retailers to expand their relevance and resonance to the shopper … I'll be interested to see the degree to which ShopRite integrates this into a broader narrative that differentiates it from the competition.

    Published on: January 12, 2022

    Customer data science analysis company dunnhumby, is out with the fifth annual dunnhumby Retailer Preference Index (RPI), which examines the approximately $1 trillion U.S. grocery market, and concluded that "in a second year dominated by Covid-19, Amazon cemented its leadership position, with H-E-B following in second place and Market Basket leap frogging three retailers to take the third spot away from Trader Joe’s. Wegmans held onto the fourth spot for a second year in a row.

    "In its first year in the RPI, Amazon Fresh vaulted past 55 other retailers to land in the fifth spot. The 10 additional retailers with the highest overall customer preference index scores are: 6) Aldi, 7) Trader Joe’s, 8) Sam’s Club, 9) Costco, 10) Walmart Neighborhood Market, 11) Target, 12) Publix, 13) Walmart, 14) BJ's Wholesale and 15) Fareway.

    “The pandemic has massively accelerated changes in how customers buy their groceries, and their behaviors are continuing to evolve,” said Grant Steadman, President of North America for dunnhumby. “2021 was the year that grocery retail became truly omni-channel. Retailers who delivered on their customers evolving needs in-store and online performed best. This was mostly the larger players, who used their advantages to consolidate their positions. The challenges for most other retailers are significant, but a number of mid-size grocers gained momentum by understanding their customers better and differentiating their offering accordingly. The report aims to provide some direction on why and how retailers can best position themselves to win with customers, in this era of the Great Reinvention.”

    Published on: January 12, 2022

    In Minnesota, there is an excellent story in the Star Tribune about how Cub Foods, put on the sales block by new owner United Natural Foods Inc. (UNFI) in 2018, has engineered a comeback - to the point that it is no longer for sale, but rather is being celebrated within the company as a success story with even greater potential.

    Much of the credit goes to Mike Stigers, who became CEO of Cub in 2019, charged with making it as attractive as possible for potential suitors.

    "Today, Cub remains atop the Twin Cities market and is churning more profits for UNFI than it did in its last years under Supervalu," the Star Tribune writes.  "UNFI's executives say it's no longer for sale. Cub executives are drawing up plans for new stores to add to the 79 it already has.

    "Like many large grocery chains, Cub flourished in the pandemic when people who were forced to stay home from work and school changed their eating patterns."

    The story suggests that Cub's connection to a wholesale company gave it certain advantages during the pandemic, which allowed it to continue to grow.

    Then, "just as Cub was adjusting to the pandemic, the killing of George Floyd by a Minneapolis police officer on Memorial Day that spring led to riots that resulted in the looting and destruction of two Cub stores in Minneapolis — one on Lake Street and the other on Broadway.

    "Stigers had seen grocery stores destroyed in civil unrest and natural disasters before. He was a district manager for Jons Fresh Marketplace in Los Angeles during riots that ensued when police were acquitted of beating Rodney King in 1992. And in 2011, he led Shaw's as Hurricane Irene wrecked the northeastern U.S. and a tent market was quickly set up while a flood-ravaged store was rebuilt in Vermont."

    The decision was made to shuttle customers by bus from the destroyed Cub locations to operating stores, and then to rebuild - and to install a community center in one of them where young people and senior citizens would have a place to gather.

    "Cub's e-commerce business continued to grow, adding its wine and spirits businesses, around 30% last year, building from the huge leap it took during the pandemic."  And then, reflecting the company's willingness to continue to invest in the business, "Cub said it would start its own online pickup and delivery service, no longer relying solely on third parties like Instacart to get its goods delivered."

    KC's View:

    What a great story, and an example of how a little moxie - okay, maybe a lot of moxie - can make the difference not just in how a retailer operates, but also in how it creates and reinforces connections with shoppers.

    Good for them.  And props to Mike Stigers for seeing that the moment represented an entrance ramp for the company, not just an inevitable exit ramp.

    Published on: January 12, 2022

    The National Labor Relations Board (NLRB) has scheduled a second union vote at an Alabama Amazon warehouse to start on February 2 and last two months.

    The balloting is the second time around at the Bessemer, Alabama, facility because after the first vote, which Amazon won decisively, the company was found by the NLRB to have engaged in improper anti-union behavior, which invalidated the election results.

    The Wall Street Journal writes that "the labor board’s decision sets up another battle between Amazon and the Retail, Wholesale and Department Store Union, which is leading the campaign to organize workers in Bessemer.

    "An Amazon spokeswoman said employees have always had the choice of whether to join a union. 'They overwhelmingly chose not to join the RWDSU last year,' she said, adding that Amazon is looking forward to the vote.

    "A spokeswoman for the RWDSU said worker voices 'can and must be heard fairly, unencumbered by Amazon’s limitless power to control what must be a fair and free election, and we will continue to hold them accountable for their actions'."

    KC's View:

    The betting here is that Amazon ins this won.  Again.  But the betting here also is that sometime in the next 12-18 months, Amazon will lose one of these votes.  Somewhere, sometime.  And, suddenly, the illusion of invincibility, at least on this issue, will recede.

    Published on: January 12, 2022

    The Financial Times reports that Terry Smith, a highly regarded fund manager, is arguing that "Unilever has 'lost the plot' and its management prizes displaying its sustainability credentials at the expense of running the business."

    According to the story, "The founder of Fundsmith, a top-10 shareholder in Unilever whose stellar long-term record has helped him amass a large retail following, used his annual letter to investors on Tuesday to hit out at the global consumer goods group.

    "The maker of Dove soap, Hellmann’s mayonnaise and Magnum ice cream has set out ambitious climate and social targets and is trying to prove that sustainable business does drive superior financial performance."  But Smith wrote in his letter that “Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business."

    KC's View:

    I suppose this depends on the definition of "fundamentals."  I think that if companies can turn a profit, even a healthy profit, while embracing the tents of ESG (Environmental, Social, and Governance), that strikes me as healthy for the planet (not just the bottom line), good for the soul, and pretty fundamental.

    Published on: January 12, 2022

    The Associated Press has a story about how some companies are ramping up their efforts to introduce kids to kitchen skills and equipment, with the theory being that it will help them be more self-sufficient and even, perhaps, healthier eaters.

    "Play kitchens," of course, are staples of the toy business, and over the years they've evolved in terms of sophistication.  But now, they're moving to the next level:

    "KidKraft’s Farm to Table kitchen nails the country-chic trend with lights, running water and cooking sounds, a farmhouse sink, hooks for cooking tools, and window boxes 'planted' with plastic onions and carrots that can be chopped and prepared. The Create & Cook kitchen has a vintage vibe, and is equipped with lots of cooking and storage sections. Three food sets let you make faux avocado toast, peach popsicles and apple pie.

    "Pottery Barn Kids and West Elm have collaborated on a midcentury-modern toy kitchen with two-burner stove, oven and sink set in a poplar frame with white MDF (medium-density fibreboard) cabinetry. Or choose the Chelsea kitchen, with Shaker-style cabinets in white, gray, blush pink or black, with brass-toned hardware.  For play prep gear, Pottery Barn Kids’ cream-colored, solid-wood toaster pops out two perfectly done slices of (fake) bread with a flip of the lever. And there’s an Italian cookery bundle with a metal pasta pot, sieve, ladles, serving dishes, and soft faux ravioli and bow-tie pasta made of felt.

    "Melissa & Doug’s sliceable, wooden, cookie dough set comes with icing toppers, a tray, spatula and oven mitt for some sweet pretend baking. Start the play meal off with a tasty salad, using their 50-piece set of felt greens, veggies, chicken and shrimp, as well as bowl and utensils. Self-stick tabs give the vegetables a crunchy sound when sliced.

    "Time for a beverage? A coffee maker comes with three pods, faux cream and sugar, and a menu card so little baristas get the order right."

    But even more important, the story suggests, is equipment that helps kids get beyond the faux.

    America’s Test Kitchen, the story says, gives "high marks to Opinel’s Le Petit Chef knife set with built-in finger rings to help kids learn proper holds, as well as a plastic finger guard."  The Klutz Kids’ Magical Baking Set "includes tools, decorations and recipes to make imaginative treats like mermaid-themed pies, fairy-size cheesecakes and pretzel wands.

    "Baketivity’s 31-piece set has a bunch of recipes, kid-size tools, and a silicone baking mat printed with helpful measurements."

    KC's View:

    I've never really understood the appeal of faux ingredients for kids, when dealing with the real thing can be utterly safe and rewarding.  Anything that food businesses can do to encourage kids to cook is a smart investment in the future.

    Published on: January 12, 2022

    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 United States now has seen 63,390,876 total Covid-19 coronavirus cases, resulting in 863,896 deaths and 42,641,852 reported recoveries.

    Globally, there have been 314,453,071 total cases, with 5,523,842 resultant fatalities and 261,904,172 reported recoveries.  (Source.)

    •  The Centers for Disease Control and Prevention (CDC) says that 74.5 percent of the total US population and 79.2 percent of the population age five and older have received at least one dose of vaccine, while 62.6 percent of the total population and 66.6 percent of the five-and-older group have been fully vaccinated.  The CDC also says that 36.7 percent of the total US population has received a vaccine booster dose.

    •  From the New York Times this morning:

    "The latest Covid-19 wave has left millions of Americans scrambling for tests, braving long lines in the cold at pop-up sites or searching furiously online for kits to use at home. But for a select group of employees at some of the country’s largest companies, tests are free and often readily available.

    "Without an adequate federal system for developing and distributing rapid tests, companies have put their own testing services in place.

    "Google will send full-time employees in the United States free at-home tests that deliver results within minutes and retail for more than $70 each. BlackRock, an investment firm that manages nearly $10 trillion in assets, offers tele-health supervision as employees self-administer rapid tests for international travel. At JPMorgan Chase, bankers can order at-home rapid tests from an internal company site.

    "Some companies are using the tests to call their staff back to the office. For others, at-home Covid testing has become the newest wellness benefit, a perk to keep employees healthy and working — even from their couches — while providing peace of mind.

    "The testing available to a small number of white-collar professionals underscores the difference between their pandemic experience and that of other Americans, putting them at an advantage over many, including workers at small businesses without the means to procure testing kits for their staffs. Like personal protective equipment and vaccines, tests have become the latest example of how a tool to battle the pandemic can exacerbate social and economic divides."

    •  From the Washington Post:

    "For several months, Quebec has required residents to show proof of coronavirus vaccination to enter venues such as gyms, bars and restaurants. Last week, it expanded the list of spaces to include government-run liquor and cannabis stores.

    "Now, Premier François Legault is considering a novel way to boost vaccination numbers and slow a growth in hospitalizations that has severely strained the health-care system: a 'health contribution' — or fee — imposed on unvaccinated adults … He provided few details about how his proposal would work or when it could take effect.

    "The premier did not specify the fee amount but said it would be “significant” and probably exceed $100. Residents who cannot get vaccinated for medical reasons would be exempt.

    "As of Jan. 7, more than 78 percent of people in hard-hit Quebec were fully vaccinated, according to data from the Public Health Agency of Canada. Provincial officials have said that although the unvaccinated make up a small percentage of the population, they are overrepresented in hospitalization figures."

    A tax on people who don't get vaccinated?  Even if I thought this sounded like a good idea, I'm pretty sure that at least here in the Us, it would be unworkable - it might be the last straw that would result in a new civil war.  At the very least, people's heads would explode.

    But, that said, how about a tax deduction for people who do get vaccinated?  Wouldn't have to be much - maybe $100 per person - but that strikes me as perhaps more palatable.  

    Published on: January 12, 2022

    •  The monthly Brick Meets Click/Mercatus Grocery Shopping Survey is out, concluding that "the U.S. online grocery market captured $8.9 billion in sales during December as over 69 million households shopped online to satisfy grocery-related needs … December’s strong results helped annual online grocery sales reach $97.7 billion for 2021 as more than 70% of U.S. households (93 million) received one or more orders during the year."

    Other key findings:  "Share of total weekly grocery spending up to 13% … Online’s annualized share of total grocery spending for 2021 was almost 13%, up nearly two percentage points from the previous year … Adjusting 2021’s online share to exclude Ship-to-Home reveals that the combined Pickup and Delivery segments captured 10% of total grocery sales, up 2 points from 2020 … Order frequency holding steady, averaging 2.74 orders/month … (and) the likelihood that a monthly active user will order again from the same online grocery service in the next month landed at 62.9% for December 2021, 7.6 points higher than prior month."

    Published on: January 12, 2022

    •  Albertsons said yesterday that its fiscal third quarter revenue increased 8.6 percent to $16.7 billion, as same store sales rose 5.2 percent - both numbers were well above analysts expectations.

    The company also said that digital sales increased 9 percent over the previous year, with a two-year increase of 234 percent, a result of shifts in consumer behavior because of the pandemic.

    Q3 adjusted net income was $457.2 million, compared to $386.6 million during the third quarter of fiscal 2020.

    •  TravelWeekly reports that Martha Stewart is getting into the restaurant business for the first time, with The Bedford by Martha Stewart, described as a 194-seat facility that will "evoke her own country farmhouse" with "seasonal, farm-to-table ingredients … emphasized on dinner, weekend brunch and holiday menus."

    The restaurant is slated to open in Paris Las Vegas sometime this spring.

    Published on: January 12, 2022

    •  SpartanNash announced that Amy McClellan, the company's Vice President, Fresh  Merchandising, has been promoted to Senior Vice President and Chief Marketing Officer, effective immediately.

    •  Western Michigan University said yesterday that Dr. Russell J. Zwanka, associate professor of marketing there, has been named director of the food and consumer package goods marketing program in the Haworth College of Business.  Zwanka succeeds Dr. Frank Gambino, who has retired after almost four decades at Western Michigan, but remains as Director Emeritus.

    Published on: January 12, 2022

    Every once in a while, I say to myself, "Self, you need to find a way not to engage so much with the whole pandemic-vaccination debate.  You're never going to convince anybody of anything."  And I listen to myself for a while - sometimes for as long as a few days, sometimes for 10 minutes - and then something happens (a story, an email) that prompts me to re-engage.

    I know some folks don't believe this, but I really do believe the pandemic - and all the dominoes that have fallen as a result of it - is one of the most important stories that MNB has covered in the past 20+ years.  

    And yesterday is an example of what keeps the story going.

    Responding to the emails and my comments in "Your Views," one MNB reader wrote:

    If as you say, the vaccine doesn't prevent transmission (majority of the evidence supports this), then how is my being vaccinated/boosted or not affecting my neighbor?

    .

    Maybe instead of “Love thy neighbor” it should be “Look out for yourself."

    I was trying to figure out how to react to this - preferably without acerbity, since some MNB readers find this offensive when expressed by people trying to behave responsibly by getting vaccinated - when I got the following email from an MNB reader, which did it far better than I ever could have:

    I wanted to follow up because last week my fully vaccinated husband, a department manager at a local grocery store, tested positive for COVID.  Every single person on his team had been positive over the last week until finally it caught up with him as well. I am sure that working 10-12 hour days every day covering for his sick coworkers didn't help his immune system.

    More than half his store is out sick; they have closed some of the peripheral departments (bakery, deli, etc) out of necessity because there is simply no one healthy to work.  He works in the outskirts of our city, where most customers do not mask and many are anti-vaccine (including the pharmacist at his location - huh?).

    Because I spend time with him, I also had to isolate pending testing, leaving my 2 young teens living the bachelor life for a week, spending a fortune on grocery and food delivery, home covid tests, and untold gray hairs helping the kids get schoolwork from teachers virtually and worrying about the health outcome for the people I love. Not to mention coming up with a response for my 12 year old who asked me "What if y'all die?"

    We have done it all "right" - vaccines, boosters, N95 masks, closing our social circle, keeping our distance - but COVID still came home to roost. We had a great outcome, all things considered, but it cost a fortune and upended our household entirely. 

    THAT'S WHY I CARE IF OTHER PEOPLE ARE VACCINATED. The more people are vaccinated, the less chance the disease spreads.  The proof?  Despite spending hours in close quarters, unmasked, with my husband the days and nights before he tested positive and despite him being fairly ill, I did not test positive and neither did the kids.  As a vaccinated person he shed less virus into the air and as vaccinated people, we were protected from what virus was there.  Because of vaccines, his infection ended with him.

    You are correct in your assertion that I am frustrated and annoyed.  I'm also frankly pretty rageful that some people won't get vaccinated or wear masks to give a good goddamn about their fellow man. Two years ago when the pandemic began my husband was a 'hero' along with other grocery store employees for keeping food and supplies on peoples tables.  Now he is sick because those same people won't do simple, safe, basic things to keep him and others safe.

    Some will suggest that this email qualifies as "invective."  But I don't think so … many people are seeing their lives and livelihoods disrupted (at best) and threatened (at worst).  I think under the circumstances, a little rage seems entirely appropriate.