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    Published on: March 3, 2022

    Content Guy's Note:  This is our second conversation looking at the checkout-free trend, today featuring Zippin's co-founder and CEO, Krishna Motukuri.

    As I mentioned yesterday, I have high expectations for this technology, and believe that it eventually will be as ubiquitous as scanning.

    I hope you enjoy.


    If you'd like to listen to this segment as an audio podcast, click and download below.

    For more information about Zippin, click here.


    If you'd like to access yesterday's conversation with Standard AI's co-founder and Chief Business Officer, Michael Suswal, click here.

    Published on: March 3, 2022

    Amazon said yesterday that it plans to close all of its bricks-and-mortar Amazon Books stores, Amazon 4-star stores, as well as pop-up stores around the country that carry a curated selection of electronics and accessories.

    The closures will affect 68 units total, in the US and UK.  While Amazon did not divulge how many employees this would affect, it did say that it would try to find these workers jobs elsewhere in the company.  Those not reassigned will get severance, the company said.

    A headline in The Day that got right to the point:  Amazon is killing off its physical bookstores, after killing everyone else’s.

    CNBC writes that "Amazon is trimming its physical retail footprint after coming off its slowest growth rate for any quarter since 2001. Shares are down more than 8% so far this year, and the stock was the worst performer in the Big Tech group last year."

    The Wall Street Journal writes that "Amazon, which began as an online bookstore, opened its first physical book shop in Seattle in 2015. It tried to set the stores apart from competitors by providing discounts to Amazon Prime customers, offering its own devices for testing and sale, and creating a highly curated selection of books based on a ratings system. The opening of Amazon’s bookstores was seen as a surprise expansion into the bricks-and-mortar book industry, which had been derailed by Amazon’s yearslong dominance in online book sales."

    The Information writes:

    "Let’s not go overboard about what this means. Amazon isn’t closing any of its Whole Foods locations, Amazon Go high-tech convenience stores (famous for their lack of human checkout clerks) or Amazon Fresh stores. The closures look to be a fine-tuning of Amazon’s brick-and-mortar store strategy more than anything else. Indeed, earlier this week Amazon showed off a new version of a Whole Foods store equipped with the Amazon Go–like technology that does away with the need for human staff at the checkout. That implies Amazon still has huge ambitions for physical stores.

    "But the closures suggest new CEO Andy Jassy may be bringing a little bit more discipline to Amazon’s scattershot growth strategy. That makes sense. For all its size and power, Amazon isn’t immune to the economic pressures every company faces. Its retail operations lost money in the fourth quarter, after all."

    It goes on:

    "Amazon recently put a British grocery chain veteran, Tony Hoggett, in charge of its physical stores effort. As we reported in December, people close to Amazon believed the arrival of Hoggett - predictably nicknamed 'Tesco Tony' because of his background at Tesco - meant a big shakeup was coming. Given how far-flung Amazon’s operations have become - it sells  everything from home robots to fitness classes - the company’s operations could arguably use more of an overhaul than just closing 68 stores. But this is a start."

    And, from the New York Times:

    "Despite its e-commerce success, Amazon is continuing to experiment with new kinds of physical stores. It has opened about two dozen cashierless Amazon Go stores, which are largely small grab-and-go convenience stores in cities, and it recently added that cashierless technology to a Whole Foods store. In just a few years Amazon has also opened a new line of Amazon Fresh stores that sell conventional grocery items, like Coca-Cola, that Whole Foods doesn’t stock.

    "In January, Amazon announced its first clothing store, Amazon Style, which will test whether customers take to a tech-driven shopping experience, like using an app to request items to a changing room."

    Betsy Harden, a spokeswoman for the company, said in a statement, "We remain committed to building great, long-term physical retail experiences and technologies, and we’re working closely with our affected employees to help them find new roles within Amazon.”

    KC's View:

    Several points here, if I may.

    First, even if the stores have not lived up to expectations - at least, not to the level that would have encouraged the company to keep them open - that's not to say that they have been a failure.  At least, not a failure as the word traditionally has been defined by Amazon.

    Amazon has been in the bricks-and-mortar business since 2015, which means that it has generated a lot of intelligence about these stores' strengths and weaknesses, about how customers behave in them, and about how shoppers and technology interact.  That information can be used to fuel future endeavors, to make decisions about priorities and  commitments.

    As Scott Moses of Solomon Partners likes to point out, Amazon has a market cap of $1.5 trillion and can borrow money at lower rates than most countries, which gives it an enormous amount of flexibility in its decision-making process.

    Plus, let's be clear.  Amazon says it is going to put its energies into grocery and fashion-oriented stores, and  when you think about it, these are categories in which actually going to the store can offer a tangible benefit.  You can squeeze the melons.  You can try on the pants.  

    It really isn't the same thing in book retailing;  after all, it was Amazon that taught us how easily that segment could be disrupted by an online retailer.  The Pop-Up stores never seemed to amount to much in terms of footprint, and the 4-Star stores … well, they may have sold items that were best-sellers on Amazon;'s platform, but they already were best-sellers.

    I would expect that we'll continue to see lots of innovation in the physical space from Amazon, and wouldn't be surprised if sometime in the next 12 months the company tests some new format in an unexpected category that catches us all by surprise.  And it'll learn from that, too.

    Published on: March 3, 2022

    Walmart has announced what it calls "the next phase" of integration of its store and online operations - Market Fulfillment Centers (MFC) that the retailer says "are poised to serve as automated fulfillment centers that are located within a Walmart store. An MFC's inventory is separate from the store’s, allowing us to continue enhancing our service for both online and in-store customers.

    "Both stores and MFCs are additional nodes in a deeply complex supply chain. The lengthening of that supply chain means quicker delivery. It’s true: We're adding offerings, while shrinking the time between the moment our customers realize they want something and the moment they get it.

    "If the store is the heart of our strategy, then our delivery network is its hands and feet.

    Unlike some of our competitors, we are integral parts of our communities – we exist as part of them. And our relationship with our customers, founded on trust, is exactly what’s allowing us to turn our scale into innovation in delivery."

    Walmart says that it has "built a tech platform that powers our last-mile delivery ecosystem. Agnostic to supply and demand, and built around our own marketplace, the platform uses automation and machine learning to turn a near-infinite number of factors into usable data. And as it learns, it keeps getting better."

    “Our new platform is doing revolutionary things,” says Srini Venkatesan, EVP for Walmart Global Tech. “With all these points of fulfillment/delivery in a sense ‘communicating’ with one another, we can plan replenishment at a shorter cycle, gain close-to-real-time insights of inventory and ultimately react to customer demand. All of that adds up to a single stellar shopping experience for Walmart customers."

    KC's View:

    Walmart stresses in its blog posting the advantage that it always has had - that "with 4,700 Walmart stores across the country, located within just 10 miles of 90% of the U.S. population, we’re in the unique position to make these brick-and-mortar locations invaluable parts of our supply chain."

    It seems likely to me that this is about a broader transformation that we're going to be seeing at Walmart in coming years, as it shifts its physical footprints to better integrate its digital approach and Walmart+ program, expanding into dark stores and ghost kitchens, building up its MFC locations, and maybe even opening health care centers that can support that side of its business.  This won't happen all at once, nor will it happen everywhere … but I do think this likely is where Walmart is headed.

    Somewhere in Bentonville there is a locked room, probably without windows, where the future is being plotted out.

    Published on: March 3, 2022

    Kroger said yesterday that it plans to open a 270,000 square foot  Customer Fulfillment Center (CFC), powered by Ocado robotics/AI, that will be capable of serving customers in Pennsylvania - a state where it has no bricks-and-mortar stores.

    It will be Kroger's second Ocado-powered facility in Ohio.

    The move is in synch with Kroger's broader strategy of seeking opportunities where it can offer e-grocery services to markets where it has no physical footprint.  It already his doing so in Florida, and has announced similar plans for Oklahoma City (which will be served by a Texas CFC) and the northeastern US (though it has not been specific about where).

    Gabriel Arreaga, Kroger's senior vice president and chief supply chain officer, said that "the Cleveland region facility is an accelerant to our strategy to achieve the doubling of our digital sales and profitability rate by the end of 2023, and we're eager to provide a rewarding experience for our new customers in northeastern Ohio and Pennsylvania."

    The announcement comes as Kroger released its Q4 and fiscal year results this morning.  Fourth quarter same-store sales were up four percent compared to the same period last year, and up 14.6 percent on a two-year stack;  online sales were to 105 percent on a two-year stack.  Total Q4 sales were $33.0 billion, up 3.7 percent compared to the same period a year ago.

    For the just-completed fiscal year, same-store sales were up 0.2 percent and 14.3 percent on a two-year stack;  online sales were up 113 percent on a two-year stack.  Total company sales were $137.9 billion in 2021, up 0.2 percent compared to the previous fiscal year.

    KC's View:

    I continue to be impressed by Kroger's pure-play e-commerce approach in markets where it has no stores.  The momentum seems to be picking up, and I'm guessing there are surprises still to come.

    Published on: March 3, 2022

    Axios writes that "Google's drone delivery service, Wing, is rapidly becoming mainstream in Logan, Australia, the drone delivery capital of the world, where it recently had its busiest day ever — one delivery every 25 seconds."

    According to the story, "Wing announced a new partnership with Coles, one of Australia’s largest supermarket chains, to begin delivering more than 250 grocery items to customers in the capital city of Canberra … Wing's growth is accelerating as it lines up new retail partners and as customers get used to ordering items for instant delivery. The company recently surpassed 200,000 deliveries worldwide — doubling in six months — including 30,000 deliveries in Australia so far in 2022."

    KC's View:

    The Federal Aviation Administration (FAA) is in the process of figuring out how best to regulate the drone delivery business in the US, but I'd expect it to happen sooner rather than later.  It seems inevitable that this is going to become mainstream fairly quickly, though it won't be suitable for every market.  But where it works, it'll make a difference.

    Published on: March 3, 2022

    From Tech Crunch:

    "Experiential retailer b8ta officially shut down its U.S. brick-and-mortar operations on Feb. 18, 2022, according to the company website. The brand’s international businesses, b8ta Japan and b8ta MENA in the UAE, remain operational, and the Japanese business has acquired the brand’s licenses in Japan."

    “It was an amazing seven years, and we are incredibly thankful to our employees, investors, partners, and shoppers,” said b8ta in a message to its U.S. community. “We had an amazing run. We hosted millions of shoppers, helped thousands of brands launch their products and inspired people all over the globe about technology and the future. Thanks for everything.”

    The closure of the company's stores came after the pandemic forced them to close;  once they reopened, in various California and Texas markets, they were unable to regain past momentum.

    KC's View:

    This story grabbed my attention because I wrote about the concept back in 2017 - it was one of the stops in the very first Retail Tomorrow Immersion Conference, in San Mateo, California.

    I described it this way:

    "Essentially, the store leases out small spaces on Apple Store-like tables to technology businesses that want to test out their products' viability. The products range from electric-powered skateboards to juicers, virtual reality viewers to high-tech security systems. B8ta has a highly trained staff that helps guide customers through the store, and rotates products regularly to make sure there is variety; it also has technology that is able to track how customers interact with products, so that suppliers have the maximum amount of actionable data. B8ta has a full supply of products for customers in the backroom, and it only profits from the table lease payments; it takes no cut of the sales."

    It was a fascinating experiment in experiential retailing, and there is much to learn from the way in which it gave start-ups the ability to display their wares, interact with customers, and seek traction that might've been hard to get otherwise.

    When you're trying to sell stuff, there are few things better than getting as close as possible to existing and potential customers.  

    The pandemic screwed up a lot of stuff for a lot of people and companies.  But we need to all learn those lessons, and figure out how they can make us different, better, smarter.

    Published on: March 3, 2022

    Denise Incandela, EVP of Apparel and Private Brands for Walmart U.S., yesterday posted an announcement saying that the company, following its acquisition last year of Zeekit, creator of a leading dynamic virtual fitting room platform, will now be offering the service to its online shoppers.

    An excerpt:

    "One of the most frustrating aspects of shopping for clothes online is understanding how an item will actually look on you. With Zeekit, our goal is to deliver an inclusive, immersive and personalized digital experience that will better replicate physical shopping.

    "We are rolling out Zeekit technology to users of the Walmart app and Walmart.com, starting with the Choose My Model experience. This feature currently offers customers the ability to select from 50 models between 5’2” – 6’0” in height and sizes XS – XXXL. Customers can determine the model who best represents their height, body shape and skin tone to understand how an item will look on them. And we will continue to expand our model selection, with nearly 70 additional model options launching in the weeks ahead to offer an even wider range of sizes, skin tones and hair colors.

    "Choose My Model is now available on select items across our portfolio of exclusive, elevated brands and private brands, including Free Assembly, Scoop, Sofia Jeans by Sofia Vergara, ELOQUII Elements, Time and Tru, Athletic Works, Terra & Sky, No Boundaries, Avia and The Pioneer Woman. We are also adding national brands, starting with Levi’s and Hanes, and we’ll continue to expand to new national brands in the coming months on Walmart.com and Walmart Marketplace. If an item is part of the Zeekit experience, customers will see the prompt to select a model on the item page."

    Incandela goes on:  "Zeekit was built with a vision to provide every person the chance to see themselves in any item of clothing found online, and that is a vision we share. Our new Choose My Model capability is just the beginning. We are also working to launch a virtual try-on experience for women’s apparel, moving with speed to bring this groundbreaking technology to our customers."

    CNBC makes the point that the technology appears to have two results - people are more willing to buy products at a higher price point, and the rate of returns goes down.

    KC's View:

    It is interesting, I think, that as Amazon tests the idea of fashion-centric physical stores that will combine elements of technology with an in-person shopping experience, Walmart is investing in heightening the online fashion experience.

    Different approaches, but the overarching message is clear - fashion is likely to be a one of the main areas of competition between these two behemoths going forward.  Expect a relative cascade of innovations and announcements from both sides that seek to gain the upper hand.

    Published on: March 3, 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…

    •  In the US, we've now had 80,770,604 total cases of the Covid-10 coronavirus, resulting in 979,725 deaths and 53,945,789 reported recoveries.

    Globally, there have been 440,947,092 total cases, with 5,995,271 resultant fatalities and 373,881,693 reported recoveries.   (Source.)



    •  The Centers for Disease Control and Prevention (CDC) says that 76.4 percent of the US population has received at least one dose of vaccine … 65 percent is fully vaccinated … and 43.8 percent has received a vaccine booster dose.  The CDC also points out that 49.9 percent of the US population eligible to get a booster shot has not received one.



    •  Bloomberg reports that "Apple Inc. plans to begin testing vaccinated retail staff twice a week for Covid-19, a step toward dropping its mask requirement for employees.

    "The company announced the plan in a memo to U.S. retail staff Tuesday, changing a policy that had required vaccinated workers to test once a week. Unvaccinated staff had already been required to test twice weekly. At the same time, the company is now allowing employees to verify their results independently rather than providing proof."

    Published on: March 3, 2022

    •  From the Wall Street Journal:

    "A coalition of state attorneys general is launching an investigation into TikTok, seeking information about whether and how the video-sharing platform contributes to online harms to children.

    "The move is an extension of an investigation unveiled by the same group of eight state attorneys general into Meta Platforms Inc.’s Instagram that focuses on similar concerns. The expansion adds fast-growing TikTok - owned by Beijing-based ByteDance Ltd. - to the list of targets under scrutiny."

    According to the story, "Leading the investigation is a bipartisan coalition of attorneys general from California, Florida, Kentucky, Massachusetts, Nebraska, New Jersey, Tennessee and Vermont … they are being joined by a broader group of attorneys general from across the country, according to the coalition."

    The Journal writes that "the investigation will look into the harms such usage causes to young users and what TikTok knew about those harms. The investigation focuses, among other things, on the techniques utilized by TikTok to boost young user engagement, including increasing the duration of time spent on the platform and frequency of engagement with the platform.”

    The story comes one day after President Biden, in his State of the Union address, said that "we must hold social media platforms accountable for the national experiment they’re conducting on our children for profit … it’s time to strengthen privacy protections, ban targeted advertising to children, and demand tech companies stop collecting personal data on our children."

    Published on: March 3, 2022

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  C&S Wholesale Grocers, as it celebrates the return of the Grand Union banner, opening 11 Grand Union stores in New York and Vermont, also is bringing the Piggly Wiggly banner to the northeastern US, with a store in Watertown, New York.

    In a statement, Bob Palmer, C&S's CEO, said, "We are very excited to bring this beloved brand to New York. Piggly Wiggly has been an icon in the supermarket industry since its first store opening in the 1900s. When we purchased the 12 stores that became available due to the Tops Markets merger with Price Chopper/Market 32, we immediately knew that this location was the right opportunity to enter the Northeast market and showcase why this is a supermarket that creates braggingly happy customers."



    •  From the New York Times:

    "Workers at Starbucks stores in Buffalo are accusing the company of retaliating against union supporters by telling some of them they may have to leave the company if they cannot increase their work availability.

    "At least five of the cases have arisen at a store that unionized in December, though union supporters at other Buffalo-area stores report similar conversations with managers, frequently but not always involving pro-union employees. The company denies any connection between the scheduling issues and union activities and says the matter is strictly logistical.

    "The tensions indicate how labor relations are playing out after initial successes in unionizing company stores. None of Starbucks’s roughly 9,000 corporate-owned stores in the United States were unionized before early December, but three have unionized since then, and workers at more than 100 stores across the country have filed for union elections."



    •  From the Wall Street Journal:

    "Amazon.com Inc. workers at a second company facility in New York will vote on a union, escalating one of a growing list of labor battles for the e-commerce giant.

    The National Labor Relations Board has told labor representatives they have demonstrated enough support among employees to hold an election on whether to unionize an Amazon facility named LDJ5 in New York’s Staten Island, according to labor organizers and the company.

    "Organizers had already won the right to hold a vote at a different facility in Staten Island, scheduled for between March 25 and 30. To move forward with an election, union organizers typically have to prove they have gained signatures from at least 30% of workers at a facility."



    •  From the New York Times:

    "Workers at an REI store in New York City voted to unionize on Wednesday, creating the only union at the outdoor-equipment and apparel retailer. The vote, which took place at the store, was 88 to 14.

    "The balloting, in the SoHo neighborhood of Manhattan, followed a string of unionization efforts at high-profile employers in the service industry. Workers at three Starbucks stores have voted to unionize since early December, creating the only union at stores owned by the company. Workers at two Amazon warehouses will finish voting in union elections at the end of the month.

    "REI, with about 170 stores and 15,000 employees nationwide, is a cooperative owned by customers who buy lifetime memberships, currently $30, and brands itself as a progressive company, in the vein of Starbucks. Its website says that the cooperative believes in 'putting purpose before profits' and that it invests more than 70 percent of its profits in 'the outdoor community,' including contributions to nonprofit organizations."