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    Published on: February 22, 2023

    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 who led the team that developed 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 & KC preview the technology innovation track scheduled for this Sunday at the National Grocers Association (NGA) Show in Las Vegas, with a particular focus on how retailers can use data to create a more frictionless experience.  That'll certainly be a discussion point for a session in which Tom and KC are participating - along with senior execs from Sifter, Zippin and - that will consider not just critical tech-enabled services, but also the realities of retailer execution.

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

    Published on: February 22, 2023

    by Kevin Coupe

    Today is National Supermarket Day, described in a bunch of press releases that I've received as "a National Day of Appreciation for our industry’s food retail employees, recognizing the essential role that grocery workers play at every level of the industry and across their communities."

    Which is nice.

    But, because I am by nature a wisenheimer, I'd like to do mark the occasion by suggesting that this is way too little.

    If retailers don't think about their employees as being essential every day, then having a "day" won't do much, if anything, to create cultures of caring within their organizations.

    "Essential" is word that was thrown around a lot  in the early days of the pandemic.  Not so much anymore, I think.

    Essential-ness ought to be at the core of every food retailer's vision, strategy, tactics and employee relations efforts.  Every day.  Because the people on the front lines are way more important in terms of the customer experience than the folks at headquarters.

    And if you are a retailer, you ought to ask yourself if, within your organization, this is true?

    Ask the question.  The answer may be an Eye-Opener.

    Published on: February 22, 2023

    by Kevin Coupe

    The Washington Post has a story about a pilot in the UK in which "dozens of companies there took part in the world’s largest trial of the four-day workweek - and a majority of supervisors and employees liked it so much they’ve decided to keep the arrangement. In fact, 15 percent of the employees who participated said 'no amount of money' would convince them to go back to working five days a week."

    According to the story, "Companies that participated could adopt different methods to 'meaningfully' shorten their employees’ workweeks — from giving them one day a week off to reducing their working days in a year to average out to 32 hours per week — but had to ensure the employees still received 100 percent of their pay."

    Companies that participated could adopt different methods to “meaningfully” shorten their employees’ workweeks — from giving them one day a week off to reducing their working days in a year to average out to 32 hours per week — but had to ensure the employees still received 100 percent of their pay."

    Once the pilot was completed, "employees reported a variety of benefits related to their sleep, stress levels, personal lives and mental health, according to results published Tuesday. Companies’ revenue 'stayed broadly the same' during the six-month trial, but rose 35 percent on average when compared with a similar period from previous years."

    The bottom line:  "Of the 61 companies that took part in the trial, 56 said they would continue to implement four-day workweeks after the pilot ended, 18 of which said the shift would be permanent. Two companies are extending the trial. Only three companies did not plan to carry on with any element of the four-day workweek."

    The notion of as four-day workweek, though in some ways it plays against the idea that companies ought to foster a sense of ownership among employees at all levels.  When I've talked to college students about their work-life expectations, my general argument has been they shouldn't think about things like 40-hour weeks … they should try to find a job that brings them enough satisfaction that they spent the time necessary to a) get the job done, and b) make themselves the go-to people within their organizations.

    (This is not to say that I don't believe in work-life balance, though I prefer "work-life integration."  I've always believed that if companies want employees to feel invested in their work, business leaders have to invest in their workers - and that means understanding the importance of time off and the fact that people have personal responsibilities to which they to attend.  All this requires nuance and maturity, however, which often are not valued in 2023 America.  But I digress…)

    There are industries in which the idea of a four-day workweek is problematic, and retail could be one of them … one of the things that I would caution retailers to be careful about is creating as bifurcated system in which office employees have different rules than store employees.  That's not good for the culture.  

    But I do think that this is the kind of innovation that businesses ought to consider, and perhaps even test, to see if it could serve as a differential advantage when appealing to employees while having a positive impact on productivity and culture.

    Maybe, under the right circumstances, four actually could be greater than five.

    Which would be an Eye-Opener.

    Published on: February 22, 2023

    The Federal Trade Commission (FTC) has decided not to challenge Amazon's proposed $3.49 billion acquisition of 1Life Healthcare, parent company to One Medical, which provides membership-based primary healthcare services to employees for more than 8,000 companies in a dozen major US markets.  This is Amazon's third largest acquisition, after Whole Foods ($13.7 billion in 2017) and MGM ($8.5 billion last year).

    According to the story, "The agency plans to issue a letter to the companies warning them that the investigation remains open despite the expiration of the statutory deadline for the antitrust review, the people said, speaking anonymously to discuss a pending deal. The FTC also issued a so-called pre-consummation warning letter when the online retail giant purchased film studio Metro-Goldwyn-Mayer last year. 

    "The One Medical merger marks the second time that the FTC under progressive Chair Lina Khan has declined to block a major deal by Amazon, though the agency’s long-running probe into the retailer continues … The agency intends to continue probing whether Amazon uses its market power to gain advantages over rivals in the concierge medicine industry, and ensure that the online retailer gains full consent from consumers for any new uses of health information."

    Bloomberg notes that "the FTC has been investigating Amazon since 2019 over concerns about the company’s control over its online marketplace. The agency is preparing a monopolization suit against the e-commerce giant that could be filed this spring."

    KC's View:

    The approval of the deal just continues to raise the stakes for a number of companies that, like Amazon, see the health care sector as fertile ground in which to grow their sales, profits, and connection to the consumer.  I've said it here before - the likes of Walmart, Kroger, Target, CVS, Walgreen and Apple all have to be consider partnering with or even acquiring companies that will keep them in the healthcare game to a greater degree.

    The Wall Street Journal this week had a story that illustrated this point, reporting on how Walgreens Boots Alliance CEO Rosalind Brewer is firmly convinced "that the nation’s second-largest drugstore chain is in a business that … no longer works," and that an expansion into healthcare is the preferred "antidote to Walgreens’ slowing growth."  Which is why Walgreens has invested billions of dollars in "a string of acquisitions aimed at putting physicians on Walgreens’ payroll and offering a range of medical services to draw more business from patients covered by Medicare."

    I'm still not sold on the ability of companies like CVS and Walgreens to deliver on this promise - I think that one of the reasons the sector's growth has stalled is that these companies' stores often aren't particularly inspiring, and adding healthcare to their portfolios seems less than philosophically additive and more focused on developing new revenue streams.

    Supermarkets have a unique opportunity by embracing the food-as-medicine movement, and doing what they need to do to help their customers make those connections.  I've made the point that technology platforms like Sifter - which, full disclosure, is an MNB sponsor, but I'd write this about Sifter even if it weren't - that allow customers to focus on the products that are relevant to their health needs, can help food retailers play a vital role in the continuum.

    Published on: February 22, 2023

    Starbucks announced yesterday that the game-changing coffee innovation teased by CEO Howard Schultz two weeks ago is a new line of beverages dubbed Oleato, which is Starbucks coffee infused with Partanna extra virgin olive oil.

    According to the announcement, "The new beverages are making their debut tomorrow (Feb. 22) at the Starbucks Reserve Roastery Milan and in Starbucks stores in Italy, followed by Southern California in the United States this spring.  Later this year select markets in Japan, the Middle East, and the United Kingdom will launch the beverages. The five Oleato beverages served at the Milan Roastery are Oleato Caffé Latte, Oleato Iced Cortado, Oleato Golden Foam Cold Brew, Oleato Deconstructed and Oleato Golden Foam™ Espresso Martini. Starbucks stores in Italy will offer Oleato Caffè Latte, Oleato Iced Shaken Espresso and Oleato Golden Foam Cold Brew."

    The press release says that "last year, Schultz was traveling in Sicily when he discovered something equally dynamic and interesting. After being introduced to the Mediterranean custom of taking a spoonful of olive oil each day, he soon began enjoying a spoonful of Partanna extra virgin olive oil as part of his daily ritual in addition to his morning coffee, and soon he had the idea of trying the two together. What he discovered was a delicious and unexpected alchemy of Starbucks coffee beverages infused with Partanna extra virgin olive oil.

    "'I was absolutely stunned at the unique flavor and texture created when the Partanna extra virgin olive oil was infused into Starbucks coffee,' Schultz said. 'In both hot and cold coffee beverages, what it produced was an unexpected, velvety, buttery flavor that enhanced the coffee and lingers beautifully on the palate.'

    "Excited by the potential, Schultz brought the discovery back to Seattle and the Starbucks beverage development team," which then developed the new line of beverages.

    The announcement of the new line comes just weeks before Schultz is scheduled to step down from the CEO role, the third time he has done so.

    KC's View:

    First of all, I want to be clear - this sounds pretty good to me.  Coffee and olive oil are two of my favorite things, and it never occurred to me that I could put one in the other.  (Also never occurred to me that I should be drinking a spoonful of olive oil each day.) So I'm certainly intrigued, and will be trying Starbucks' iteration on this concept as soon as I get the opportunity.

    But … in reading Starbucks' online posting about the Oleato line, it seems like Schultz's name is mentioned almost as much as the products' name - I have rarely, if ever, read such a CEO-centric, ego-driven product introduction in all my life. It is dripping in obsequious praise for Schultz's foresight, guidance, leadership and vision, with the overarching message being that Starbucks would be nothing without him.  This, in fact, is a defensible position - but let other people make it.

    Read this, and you'd never know that Starbucks is going to have a new CEO in a few weeks - I can't find his name mentioned anywhere in the blog posting about Oleato.  (What the hell is his name again?)

    If Schultz had any style and grace, instead of taking this big curtain call on the way out, he would've insisted that the new CEO (what the hell is his name again?) make this product introduction as one of his first actions.  It would've given the new guy (what the hell is his name again?) an early win, and help him establish some credibility.

    But no.  That's not how the cult of Schultz works.  Which is why, since he is staying on the board this time around, his shadow will fall long across the entire company.  It is all about him.  (Which is why the Senate Labor Committee looking into Starbucks' anti-union activities ought to issue him a subpoena … the only time Schultz appears to want to take a back seat and get out of the spotlight is when he might have to testify under oath.)

    When I read the Oleato materials, I was left with only one question:

    When Schultz crossed the Strait of Messina from Italy's mainland to Sicily, did he need a boat?  Or did he walk on water?

    Published on: February 22, 2023 reports that "the Cincinnati Reds will wear an advertisement for the Kroger chain of supermarkets on their jersey sleeves during the 2023 season … Cincinnati joins the Arizona Diamondbacks, Boston Red Sox, Houston Astros, Los Angeles Angels, and San Diego Padres as MLB clubs to officially announce and reveal their on-field uniform advertisements for 2023, the first in which teams are permitted to display ads on their jerseys."

    According to the story, "The photo we saw showed a white rounded rectangle patch on the player’s right sleeve with the Reds’ running man logo on the left. The Kroger logo is not re-coloured to match the club’s red, white, and black colour scheme; instead shown in the company’s usual blue and white.

    "Players who bat from the opposite side of the plate will have the logo on the other sleeve which has resulted in a new Reds “running man” patch showing a reversed version of their usual logo.

    "Most teams will flip the advertisement patch to the player’s camera dominant sleeve, what makes the Reds unique is that they had to create a whole new team logo in order to let this happen."

    KC's View:

    I hate this.  It is the NASCAR-ification of baseball, and all about ownership greed.

    To be honest, though, I hate this less than the so-called ghost runner rule, which is now permanent - it means that extra innings have to begin with a runner on second base, which MLB says speeds up the game.  Which may be true, but it is a stupid rule - all about speed and nothing about the integrity of the game.

    Published on: February 22, 2023

    Bon Appétit has a story noting that "as inflated food bills continue to hammer customers, the conversation around shoplifting is heating up. Some shoplifters say stealing up to 80% of their food offsets skyrocketing costs of living and combats greedy grocers who are using inflation as an excuse to hike up prices unnecessarily."

    And so, the story offers an interview with  Elizabeth, described as "a Whole Foods employee in Michigan," who "regularly notices shoplifting - but doesn’t feel the need to do much about it."

    A passage from the Q&A:

    What’s the most memorable shoplifting experience you’ve seen? 

    "Around 18 months ago, I saw an older woman, maybe in her mid- to late-60s, reusing the brown paper bags that we use to bag groceries. She had set them up in her cart and was filling them with hundreds of dollars worth of stuff, like eggs and milk and produce. And then she just walked past all the registers and out the door. 

    I saw it, and so did my team lead. And we kind of both looked at each other. My team leader was like, “Did you check her out?” I was cashiering and I was like, “No.” And so my team lead ended up running outside and asked the woman for her receipt. And the woman was like, “Oh, I didn't get a receipt.” My team lead was like, “Well, why don’t you come back inside with me, and we’ll find the receipt online just to make sure.”

    She came back in with the cart full of groceries, and then left it inside and just walked out. We didn’t do anything. I honestly felt bad because it was this older woman, and it wasn’t like she was buying really materialistic stuff. It wasn’t like face masks or whatever; it was necessities. Like, she needed food. 

    Would you have done anything different if your team lead wasn’t there?

    I don’t think I would’ve told anyone. Whole Foods is a multibillion dollar business, and it’s connected with Amazon. I don’t care about us losing a small amount of stuff. We donate so much food at the end of each day. If something is slightly damaged, we will donate it. And in my head I see shoplifting as just another donation to someone who obviously really needs it. 

    The Q&A goes on:

    How do your coworkers feel about shoplifting? How do y’all handle it?

    We’ve talked about it and we are supposed to report shoplifting to management whenever we see it. We are not supposed to confront the person or anything out of fear of retaliation. 

    But personally, I don’t tell anyone if I ever see it. I know that the coworkers who are closer to my age have very similar opinions on it. It’s just not something we care about all that much. Our paycheck isn’t going to change whether or not we do anything about it, and Whole Foods will not suffer from the tiny amount that someone just stole. My boss might have a different opinion. But still, he’s fairly chill, and I feel like he would also be empathetic toward people who need food.

    KC's View:

    I am sympathetic to the people who are hungry and don't have the money to buy food, and I'm certainly sympathetic to the employee who feels she is facing an ethical dilemma, and has chosen to not say anything.

    But I think she's wrong.

    Quite simply, the food isn't hers to give away.  It isn't even her boss's food to give away.  It belongs to Whole Foods - and despite the fact that it is part of a multi-billion-dollar corporation and can afford it, Whole Foods has a right to expect a certain level of institutional integrity from employees.

    Now, if Whole Foods wanted to say that certain kinds of shoplifting should go unchallenged, that is its right.  (Not a good idea, though, because individual employees will bring their own biases to specific situations, and it isn't fair to put them in that position.)

    In the end, unchallenged small crimes often lead to much larger crimes as people think they can get away with them.  It is where the fabric of civilized society begins to unravel.

    Published on: February 22, 2023

    •  From The Information:

    "E-commerce sales as a percentage of total retail flatlined in 2022 after rising sharply for several prior years, according to U.S. Census Bureau statistics released Friday. The data underscores the challenge facing an array of companies that rely on growth in online shopping, including small online sellers, big ecommerce firms like Amazon and payment processors like Stripe.

    "While online sales continued to grow last year, physical retail sales grew at roughly the same rate, leaving e-commerce’s share of the total market flat at 14.6% in 2022, the latest report shows. The stagnation follows a period of rapid growth during the pandemic, when e-commerce grew from 11% of total retail sales in 2019 to 13.6% in 2020 and 14.6% in 2021, according to previous census reports.

    "E-commerce giant Amazon built out infrastructure over the past few years based on the assumption that rapid online shopping growth would continue at a breakneck pace even after the pandemic. But that growth has failed to materialize, leaving Amazon with a glut of excess warehouses and delivery stations. It will take Amazon through the end of 2025 to grow into its current fulfillment center capacity, according to a Morgan Stanley analysis published in January."

    •  From CNBC:

    "A group of Amazon employees is urging CEO Andy Jassy to reconsider a new return-to-office mandate.

    "On Friday, Jassy announced Amazon would require corporate staffers to spend at least three days a week in the office beginning May 1. Jassy said he and Amazon’s leadership team, known as the S-team, decided it would be easier for employees to collaborate and invent together in person and that in-person work would strengthen the company’s culture.  The move marks a shift from Amazon’s pandemic-era policy, last updated in October 2021, which left it up to managers to decide how frequently their teams needed to be in the office. Since then, there’s been a mix of fully remote and hybrid work among Amazon’s white-collar workforce.

    "Staffers on Friday created a Slack channel to advocate for remote work and share their concerns about the new return-to-work policy, according to screenshots viewed by CNBC. Almost 14,000 employees had joined the Slack channel as of Tuesday morning.

    "The employees have also drafted a petition, addressed to Jassy and the S-team, that calls for leadership to drop the new policy, saying it 'runs contrary' to Amazon’s positions on diversity and inclusion, affordable housing, sustainability, and focus on being the 'Earth’s Best Employer'."

    Published on: February 22, 2023

    With brief, occasional, italicized and sometimes gratuitous commentary…

    •  From the Wall Street Journal:

    "Barnes & Noble is launching a $40-a-year membership program that promises to offer 10% discounts, free shipping, a tote bag and bigger lattes to its members.

    "In asking customers to pay an annual fee for a range of perks, the largest bookstore chain in the U.S. is following some of its competitors, including Inc. and Walmart Inc., whose respective Prime and Walmart+ programs offer no-minimum free shipping, among other benefits.

    "The bookseller is also launching a free, lower-tier membership program that allows members to earn a virtual stamp for every $10 spent online and in stores, and translate into a $5 credit for future purchases once 10 stamps have been accumulated. People who sign up for the $40 program also get the rebates.

    "The efforts will give Barnes & Noble the opportunity to learn more about its customers —from what they read to when and how often they buy—so that it can pitch them more effectively."

    I know Barnes & Noble is experiencing a resurgence, and good for them.  But this certainly seems imitative, not to mention late to the party.  Couldn't they have come up with something actually innovative?

    Published on: February 22, 2023

    Executive Suite is sponsored by Robin Russell Executive Search.

    •  Acosta announced that it has hired Don Byrd, most recently the Principal/Team Leader, CPG/Retail Insights at Information Resources, Inc. (IRI), to be its new Executive Vice President of In-Store Services for Walmart.

    Published on: February 22, 2023

    …will return.