Published on: January 20, 2022
An analysis of the 100 most popular broadcast TV programs of 2021, KC suggests, offers a compelling metaphor for what traditional retailers need to do to compete effectively in the modern marketplace.
Here is the graphic referred to in the video:
Published on: January 20, 2022
CNBC reports that Amazon plans to open its first bricks-and-mortar clothing store, with customers using their smartphones to choose items and communicate with staffers in a way that the company hopes will alleviate some of the "pain points" inherent in such shopping trips.
The Amazon Style store is slated to open in The Americana at Brand mall in Glendale, a Los Angeles suburb, later this year.
According to the story, "The store will feature women’s and men’s apparel, shoes, and accessories from a mix of well-known and emerging brands, with prices catering to a wide range of shoppers … At roughly 30,000 square feet, the retail space is around the size of a typical T.J. Maxx location, but smaller than the average department store.
"Customers will rely heavily on their smartphone while they shop the store, using it to view additional colors and sizes, as well as notify store employees to put an item in their fitting room."
The story goes on: "When shoppers walk into the store, they’ll see “display items,” featuring just one size and color of a particular product; the remaining inventory for each product will kept in the back of the store. After logging into the Amazon app on a smartphone, they’ll scan a QR code on the item to view additional sizes, colors, product ratings and other information, such as personalized recommendations for similar items … After scanning the QR code on an item, shoppers can click a button in the Amazon app to add the item to a fitting room or send it to a pickup counter.
"In the fitting rooms, Amazon has added touchscreen displays, which shoppers can use to rate items or request different styles or sizes to be delivered to their fitting room.
This does a couple of on-brand things for Amazon. It extends its bricks-and-mortar presence, allowing it to test its approach to algorithms and technology when applied to yet another segment of retailing. And, it allows Amazon to build on an already aggressive approach to fashion retailing; the story notes that "last March, Wells Fargo said Amazon surpassed Walmart as the No. 1 apparel retailer in the U.S., and estimated that Amazon’s apparel and footwear sales in the U.S. grew by approximately 15% in 2020 to more than $41 billion."
One interesting thing about the new format is that Simoina Vasen, managing director of Amazon Style, says that unlike at Whole Foods, Prime members won't get discounts. That may be true in the beginning, but it is isn't hard to imagine that at some point, as Amazon blends its digital and physical worlds, it could test this approach in the style store to see what kind of impact it has.
I must admit that I am intrigued by one element of the Amazon Style store - in some ways, the format seems about a decade old.
Longtime MNB readers may remember that back in March 2013, I wrote about a Seattle jeans store called Hointer, created by entrepreneur and former Amazon.com executive Nadia Shouraboura: "Shoppers use smartphones to scan what they like, and a robotic system in the back delivers items to their dressing rooms, where they can then send for different sizes and colors via the Internet. To make a purchase, shoppers simply slide their credit cards through a machine and leave without ever talking to a single salesperson. More than 150 styles of men's jeans are available, and the store is designed to be a kind of bricks-and-mortar response to the e-commerce threat; people like shopping online because it is fast, efficient and doesn't have any of that annoying human interaction, but have to deal with the fact that it also does not allow them to reach out and touch, as well as try on, products."
Interestingly, this picture provided by Amazon is reminiscent of some elements of the Hointer experience:
You can read the original piece I wrote here. Plus, I did an old FaceTime video a couple of months later in which I discussed the experience.
GeekWire also did a video about Hointer:
I always was impressed by Shouraboura's vision, and disappointed that the concept did not get greater traction. But the Amazon Style announcement suggests that she really was ahead of her time, and that technology - and consumers - have finally caught up with what she was envisioning a decade ago.
Published on: January 20, 2022
Grocery delivery company Instacart announced this morning that it will partner with Chase to offer an Instacart-branded credit card that will offer accelerated points on purchases made using the card for purchases in the Instacart system.
The card reportedly will be made available to consumers later this year.
The announcement says that "the new Instacart Mastercard credit card will be the first Chase co-branded card offering in the on-demand grocery delivery space. The card will allow consumers to earn accelerated points on purchases across the Instacart marketplace, which today includes more than 700 beloved national, regional and local grocers and retailers. The card is expected to launch in 2022 and will also offer a number of other benefits, perks and savings."
The company goes on: "The new co-branded card expands the current relationship between Chase and Instacart. Since June 2020, the companies have worked together to provide limited-time Instacart offers and savings to existing Chase cardmembers. Chase and Instacart are currently offering eligible Chase cardmembers a free Instacart Express membership and $10 off their next order of $35 or more, through April 30, 2022. Instacart Express membership provides unlimited free deliveries and reduced service fees on all orders $35 or more. More details on this limited time offer and full terms are available here. Eligible cardmembers can sign up through January 31, 2022."
Sure, why not. Because Instacart doesn't have enough information about what its users are buying from its client retailers, some of whom may have their own credit cards that could be replaced by Instacart's entry.
Let's be clear. Everything - and I mean freakin' everything - that Instacart does is to reinforce consumers' loyalty to Instacart, to build up its own brand, to drive revenue to its bottom line, and to position Instacart for a likely IPO that will make some folks really, really rich … but that is built on a foundation of retailer relationships that are worth less and less with every bit or byte of information about customers that Instacart is able to glean.
At a certain point, Instacart simply won't need retailers anymore … it'll have the customers, the vendor relationships, and the financial infrastructure to simply do business on its own.
Published on: January 20, 2022
E-commerce company Gopuff is launching a range of private label products, featuring four different own-label brands and more than 100 SKUs, a move that CNBC describes as the company's "latest effort to stand apart from other convenience delivery companies. Gopuff owns, operates and stocks its own micro-fulfillment centers with full-time employees, whereas other companies connect customers, drivers and retailers on a platform."
It is also Gopuff's latest effort to bolster its valuation as it moves toward an expected IPO.
CNBC writes that "the lineup will kick off with bottled water under the 'Basically' brand, followed by other household items like cleaning products, batteries, paper products and food storage. The company will also add a line of snacks in the coming weeks."
The story notes that "Gopuff also operates 70 kitchens which prepare food from the company’s own recipes as well as its restaurant partners."
Some context:
"Competition in convenience delivery has intensified over the past years, as DoorDash, Uber and Instacart expand their convenience offerings. Doordash launched its own version of micro-fulfillment centers nationally called DashMart in 2020. According to research data firm YipitData, Doordash leads the convenience delivery market share with more than 45%, Gopuff has 23%, while Instacart and Uber have 16% and 15%, respectively."
Gopuff, which says it delivers to 1,000 cities in the US, UK and France, has an interesting value proposition - in some markets it says it delivers 24/7 … and it has a flat delivery fee of $1.95, with an additional $2 charged for alcohol deliveries, on order minimums of $10.95.
I have no idea if the model is sustainable, but traditional retailers need to consider the possibility that companies like Gopuff raise the bar on what consumers consider to be the floor - not the ceiling - for e-commerce offerings. And, like it or not, they may have to respond.
Published on: January 20, 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 69,808,350 total cases of the Covid-19 coronavirus, resulting in 880,976 deaths and 43,892,277 reported recoveries.
Globally, there have been 339,853,666 total cases, with 5,585,826 resultant fatalities and 273,331,758 reported recoveries. (Source.)
• The Centers for Disease Control and Prevention (CDC) says that 75.2 percent of the total US population has received at least one dose of vaccine … 63.1 percent of the total population has been fully vaccinated … 39 percent has received a vaccine booster dose … and 53.2 percent of the total US population that is eligible to receive a booster shot but has not.
• Starbucks announced yesterday that it no longer will mandate that its US workers need to be vaccinated for Covid-19, or undergo weekly testing, as a prerequisite for being employed by the company.
The Wall Street Journal reports that COO John Culver told company employees via email that the shift in policy was a response to last week's ruling by the US Supreme Court that the federal government could not mandate vaccinate-or-test programs at companies with 100 or more employees.
However, Culver added, “We continue to believe strongly in the spirit and intent of the mandate." He also said that the vast majority of US employees are vaccinated.
Starbucks may have believed in the mandate, but not quite enough to impose it independent of a government mandate. I could be wrong on this, but it seems to me that this could have less to do with the pandemic and more to do with not giving union organizers any more ammunition in their efforts to, store by store, organize the company.
Published on: January 20, 2022
• Benzinga reports that "7-Eleven has launched a new program that waives the fee for delivery service in exchange for a monthly subscription."
The subscription is dubbed the 7NOW Gold Pass: "For a $5.95 a month subscription, 7-Eleven will deliver any customer order in what the company described as 'typically in about 30 minutes.' Subscribers with at least $10 in delivered goods will receive additional benefits, including the option to select a free product. Members of the 7Rewards loyalty program can double the rewards when ordering through the 7NOW Gold Pass service."
The story notes that "7-Eleven has been running a delivery service via its 7NOW app since 2018, and the company added that the new free service – which is available to its U.S. customers only – will pay for itself in about three delivery orders per month."
Published on: January 20, 2022
• ABC News reports that "Meijer is pledging to reduce carbon emissions by 50% over the next three years while increasing or building new renewable energy resources.
"The Grand Rapids-based retail giant wants to cut its carbon footprint in half by 2025. That would exceed a global goal of cutting greenhouse gas emissions by 50% before 2030 issued by the Intergovernmental Panel on Climate Change … Meijer says it already has reduced carbon emissions by 17% since 2014 while opening 52 new stores and additional distribution facilities. The company's carbon emissions are down 30% per square foot over the past eight years."
“We are reducing carbon emissions not only because it makes good business sense, but because it aligns with our values and mission of enriching lives in the communities we serve,” Meijer President and CEO Rick Keyes said in a prepared statement.
• From the Boston Globe this morning:
"Workers at another two Boston-area Starbucks locations took steps to unionize Wednesday in keeping with a nationwide organizing campaign at the country’s largest coffeehouse chain.
"The vast majority of employees at a Starbucks cafe in Cleveland Circle and one in the Continuum building in Allston sent a joint letter to Starbucks CEO Kevin Johnson earlier this week, asking the company to recognize their efforts and end what they called 'shameless union-busting' … The workers follow their colleagues at two other local Starbucks — 1304 Commonwealth Ave. in Allston and 277 Harvard St. in Brookline — who voted to unionize last month. In 2021, multiple other Boston cafes, including Pavement Coffeehouse, Darwin’s, and three Somerville coffee shops, took steps to unionize, too.
"In total, workers at 26 Starbucks across the country have now announced their intention to form a union. As of October, the company had more than 15,000 locations in the United States."
• The National Association of Convenience Stores (NACS) said yesterday that there now are 148,026 convenience stores operating in the United States, a 1.5% decrease in the number of stores in operation (150,274) at the close of 2020 … The industry decline was led by a 3.1% decrease in single-store operators (89,336 in 2021 vs. 92,196 in 2020), which account for 60.4% of all convenience stores.The decline of single-store operators continues a multi-year trend; single-store operators made up a record 63.2% of the industry in 2017. Meanwhile, the percentage of single-store operators that sell fuel dropped to 54.6% in 2021, the lowest since the metric has been tracked in 2005."
• CNN has a story about how "Coca-Cola CEO James Quincey, a 25-year veteran of the company, has been hearing it from disgruntled niche beverage fans … The complaints follow a striking decision Quincey made last year to slash the company's portfolio of products in half — killing beloved brands like the diet drink Tab, smoothie brand Odwalla and Zico coconut water in the process. Overall, about 200 brands were on the chopping block."
The story notes that "nobody knows better than Coca-Cola that messing with fan favorites has consequences. When the company tried to change Coke's formula in 1985, customers were so distraught that the company quickly reversed course. The famed New Coke debacle proved that loyal customers were not to be trifled with.
"But there are also consequences to keeping old favorites alive. Underperforming brands, like the ones that have been eliminated, take away precious shelf space from more popular products. That means Quincey must calibrate constantly to ensure every product Coke makes — whether newer entrants like Coke Energy or staples such as Coca-Cola Zero Sugar — deserves to be there, and that every one brings as much value to the brand as possible. Otherwise, Coca-Cola will fall behind its competitors and growth will slow."
At the same time, CNN reports, "is unveiling a new look for flavored Coke products this month, and it has a new Coke variety coming in a few weeks. It's part of the company's renewed focus on its Coke brand, as it dumps niche products and tries to drum up excitement for its core beverages.
"In the United States, new versions of Cherry Coke cans and bottles are magenta, with the white Coca-Cola logo emblazoned on the regular version and a black Coca-Cola logo on the Zero Sugar version. The new Vanilla Coke cans and bottles are cream-colored, and the Cherry Vanilla flavor's new packaging is a mix of the two (heavy on the magenta).
"Coke with zero caffeine as well as Coke with zero caffeine and no sugar also have new looks, keeping with these designs."
• Accelerate 360 said yesterday that it is acquiring Bauer Media Group's US publishing business, which includes print and digital assets for titles familiar to US grocery shoppers, including Woman's World and First for Women, as well as Bauer's bookazine business which produces more than 100 special interest publications per year.
David Parry, CEO of Accelerate360 said in a prepared statement, "This is an extraordinary opportunity to not only add industry leading brands to our brand portfolio, but also add incredibly talented employees with proven abilities in audience development, digital and special interest publications that further expand A360 Media's capabilities and resources.""
Full disclosure: Accelerate 360 is a prime MNB sponsor.
Published on: January 20, 2022
• The Houston Chronicle reports that H-E-B company president Scott McClelland "is planning to step down as president of the company at the end of the year. McClelland spent more than three decades at H-E-B and was promoted to president in 2017 after previously serving as president of the company's Houston operation."
In a statement, Craig Boyan, president of H-E-B, said:
“Over his stellar 31-year career with H-E-B, Scott McClelland has been an integral part of our company’s growth and an important voice leading our stores and serving our community. While Scott transitions from his role as President of H-E-B Food and Drug stores, he will continue to serve on the H-E-B Executive Committee and as an advisor on our expansion into the DFW metroplex. With this change, H-E-B store division leaders Armando Perez, Executive Vice President Houston Food and Drug stores, Bill Anderson, EVP San Antonio Food and Drug stores, and Juan-Carlos Rück, EVP North West Food and Drug stores, will report directly to me. They are excellent leaders who will continue to drive our growth throughout Texas.”
• Northeast Grocery Inc. - the entity formed by the merger of Price Chopper/Market 32 with Tops Markets - announced yesterday that Scott Grimmett, who as Price Chopper's parent company's president-CEO helped to engineer the merger, is retiring next month.
He will be succeeded as Northeast Grocery's CEO by Frank Curci, the former Tops Markets chairman-CEO.
According to the announcement, the parent company offices will remain in Schenectady and Curci will work from there. Blaine Bringhurst will continue as president of Price Chopper/Market 32 and John Persons as president of the Tops Markets, the company said.
Published on: January 20, 2022
I really screwed this one up yesterday, and I'm not entirely sure how.
I wrote:
Raley’s announced the hiring of Jennifer (Jen) Warner to the organization’s Executive Leadership Team in the role of Chief Administrative Officer. Prior to joining Raley’s, Warner served as Vice President of Legal at Columbia Sportswear Company, Chief Developmental Officer at AsheWorks Inc., and Global Chief Compliance Officer and General Counsel, Americas at XPO Logistics.
But of course, Jen Warner got named to that job a couple of years ago.
This week, she was promoted to the newly created role of president of Raley's operating division, leading "the retail brands of Raley’s, Bel Air, Nob Hill Foods and Raley’s ONE Market, representing 123 stores and distribution center operations in California and Nevada."
As I said, I'm not sure how this happened. I think I must've seen the email informing me of the promotion, clicked independently to the press release and somehow went to the old one, not the new one.
I feel awful about this … especially because I got a raft of emails from Raley's yesterday, from various levels of the organization, pointing out my screw up and letting me know that Jen Warner is a terrific leader who is in the right place at the right time. (The phrase "brilliant and extremely talented" was used.)
Mea culpa, mea culpa, mea maxima culpa.
Published on: January 20, 2022
Yesterday we took note of a New York Times report that "Europeans bought more electric cars than diesels in December, a stunning illustration of the growing popularity of battery power and the decline of diesel, which was once the most popular engine option in Europe."
One MNB reader responded:
As I see it, the more intriguing eye opener is how this will impact a significant retail channel? That of course being convenience stores. As personal desires and governmental policies are both driving toward increases in electric vehicles, will the charging station become as ubiquitous as the gasoline pump? Will charging stations continue to be free? What will various retail sectors do to monetize the length of time a charge typically takes? There are winners and losers just around the corner with the winners likely being those who are currently contemplating this emerging reality.
On the subject of the metaverse - I conceded that this notion of me and my avatar interacting with other people and their avatars in a digital environment sounds awful - one MNB reader responded:
I wanted to share that you echoed my sentiments in the piece you published describing the metaverse. I may also be showing my age a bit, but having virtual life be more important than physical life does not sound appealing to me at all. In the end, at least nowadays, we still have to live in a physical environment, and I have fears (perhaps off base) of people mired in a virtual world and at best giving the real world minimal attention, which would be a loss in my book.
As one example, while there’s a place, especially nowadays, for virtual happy hours, they are still rooted in a shared physical reality where participants can physically still connect and maybe have a drink together, even if separated physically (in person is even better of course). Going entirely virtual and having a virtual drink in a pretend world has pretty much zero appeal to me…thanks for listening!
Another MNB reader wrote:
Probably my age also reflects my point of view also, but I watch young kids spending so much time on their phones, and now adding virtual reality games, that it seams that they are losing social skills in the real world. It Reminds me of a 60’s song “In the Year 2525”!
From another:
Sounds like the movie - Ready Player One.
And, from MNB reader Andy Casey:
One of the "Star Trek" episodes, when Spock hijacks the Enterprise to take Captain Pike to Talos 4, seems a relevant cautionary tale here.
An email that illustrates why I love the MNB community.
