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Tuesday, July 25, 2017

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Sansolo Speaks: Focusing on the Shoppers’ ABCs

by Michael Sansolo

The frantic pace of news in the industry of late quite naturally has us all focused on change, but the reality is that most shoppers likely don’t share our concerns. All they want is to do their shopping, get the best products at the best price, and experience as little hassle as possible.

After all, while this is an enormous and extremely complex industry, it’s also a main street business serving communities and shoppers with the basic needs of life. The best companies, it always seems, manage to understand and excel at both parts of that spectrum.

And that’s why it might be worth keeping a careful eye on Lidl for both the stores the German retailer has started opening and for the clear way they are communicating with shoppers. There’s no way of knowing whether this new invader will succeed where others have failed, but the first steps already look promising.

I had a chance to visit my first stateside Lidl last week in Culpepper, Virginia, and like many others I was favorably impressed with what I saw. The store is clean, modern and welcoming. The price image is clear and heavily reinforced, but so are critical elements of customer delight from the bakery at the front of the store to the seasonal products in the “surprise” section.

What really gave me pause, though, was the handy and consumer-friendly magazine handed out in the store. I’m no expert, but if this summer edition is any indication, Lidl has a good sense of how to talk to shoppers. I know it spoke to me.

The articles are simple and helpful. There are basic shopping and cooking tips such as:

• How to pack a shopping bag like a pro;
• Great reasons to bring your own shopping bag;
• Cooking tips for beef, pork and chicken;
• Ideas for throwing a great summer barbecue targeting both city and country dwellers.

Another section offers “Lidl Life Hacks” with simple explanations on easy ways to keep fruits and vegetables fresh longer; how to best load and unload a dishwasher; and another on how to organize a pantry. Easy recipes and shopping list ideas are included.

Still other articles help shoppers meet the new company with explanations on how stores are laid out, how and why specific products are purchased and offered; and insights from company experts on issues like how to select wine, and a chance to meet local growers.

Heck, there was even a section explaining labels for organics, GMO-free, fair trade and more all in clear language.

In other words the magazine featured a collection of useful and useable information that positions Lidl in a friendly, approachable way. Obviously none of this is exactly new or unique information, but think of what it does for Lidl’s target shoppers.

While service in the store is limited - remember, this is a deep discount store - a customer can still get tools from Lidl to enhance the shopping trip and make the shoppers’ food dollar work harder. No doubt Lidl feels that kind of information may give shoppers another reason to see the retailer as helping solve problems.

And in turn, that may Lidl build a loyal shopper base. The table stakes for successful retailing seem to have just gone up yet again.

Michael Sansolo can be reached via email at msansolo@morningnewsbeat.com . His book, “THE BIG PICTURE: Essential Business Lessons From The Movies,” co-authored with Kevin Coupe, is available on Amazon by clicking here. And, his book "Business Rules!" is available from Amazon by clicking here.


Tuesday Morning Eye-Opener: Bean Counts

by Kevin Coupe

I'm a big LL Bean fan, and so it was with considerable interest that I read a piece in Advertising Age about a new campaign the company is launching "in an effort to attract consumers on a national stage."

The campaign, which is tied to its broader "Be An Outsider" theme, focuses on the current back-to-school season ... and features some terrific commercials that you can see here and here.

There were two passages in the story that struck me as Eye-Openers.

One is that LL Bean, one of the great traditional catalog marketers, has begun focusing less on paper and more on digital media - but this isn't just a matter of adapting to current realities. Brad Matson, senior VP-creative at LL Bean, says that the goal is "to shift us from a heritage brand, in catalogs, to a product company.", but

Having a "heritage," it seems to me, sometimes can be the same thing as having - or being trapped by - a legacy. What LL Bean is trying to do is difficult, but probably critical to its long-term relevance.

The other thing that grabbed my attention was a line from Leeann Leahy, chief executive at Via, the agency that is working with LL Bean to sharpen its message and hone its focus.

The story notes that the new campaign is designed to differentiate LL Bean "from other outdoors-focused brands that push more extremism because it emphasizes inclusivity and a 'shared love,' said Leahy. 'It's not about scaling a mountain, it's about having a picnic'."

BTW...by at least one measure, LL Bean seems to be on its game.  Prosper Insights & Analytics, which describes itself as providing business intelligence solutions, has released the 2016 Customer Service Champions - and for third straight year, consumers gave LL Bean top honors, ranking it above Amazon.

“While Amazon has dominated retail headlines lately, our latest list of Champions proves that competitors can still connect with consumers on factors other than price,” the company said, "L.L.Bean’s customer-centric philosophy certainly resonates with shoppers, earning the outdoor outfitter a rare retail bragging right: a first place finish over Amazon.”

It's a start.

Editorial continues after a word from our sponsor...

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MyWebGrocer's Rich Tarrant: The Challenge & Opportunities Created By Amazon-Whole Foods - Part 1 of 3

Content Guy's Note: Now that the dust has settled a bit from Amazon's $13.7 billion bid to acquire Whole Foods, we engaged with Rich Tarrant, founder and CEO of MyWebGrocer - a longtime and valued sponsor of MNB - for a discussion of what the deal will mean to industry competitors. This is the first of a three-part interview...

KC: First off, were you surprised by the Amazon bid for Whole Foods?  While I was surprised by the specifics, to me this seemed like a move by Amazon that was long in coming … inevitable, and only dependent on the right company being available at the right moment.

Rich Tarrant:
I was not surprised. People forget that Jeff Bezos has had his eye on grocery for 20 years. He (through Amazon) was an investor in Home Grocer – a Webvan-like operation out of Southern California in 2000. It was actually performing well until Webvan bought it and took it down with them in what everybody remembers as one of the biggest internet flops of that time.

Bezos recognizes the frequency of grocery ordering and local nature of stores to consumers. He basically bought 462 conveniently located and profitable warehouses. It’s a brilliant move.

KC: To what extent do you think that Amazon's acquisition of Whole Foods could change the way retailers compete against Whole Foods?  Where do you see Amazon being able to make a difference in how Whole Foods comes to market?  How do you think Whole Foods will make Amazon better at the food business overall?

RT:
Retailers should not be thinking about competing with Whole Foods any longer – they need to be thinking about competing with Amazon. Not a pleasant thought given no traditional retailer has fared very well against them, but it is not about Whole Foods any longer.

In fact, many retailers have done a good job introducing organics at lower pricing – which took a big part of Whole Foods' business and what undoubtedly led to this transaction.

As for Amazon changing how Whole Foods comes to market – I think we need to look at it from the other side. This is more about how Amazon is going to come to market to tackle the food vertical – with a built in supply chain, conveniently located warehouses (WF stores) and the ability to deploy fleets of trucks to deliver grocery and everything else. Amazon has been working to lower their shipping costs for years and this, to me, is a clear sign that they plan to have delivery operations in every major metro area.

KC: To me, data has always been Amazon’s not-so-secret weapon in how it competes … it makes no secret about its ability to compile data about customer behavior, and its willingness to use it.  It also strikes me as the great unharvested weapon to which most retailers have access, if only they would make a commitment to harvesting all the information they should know about their customers.  To what degree is MyWebGrocer helping its retailers - and engaging with their suppliers - to make taking action on actionable information and higher and more accessible priority?

RT:
Data is clearly a huge asset in the coming battle – and you are correct, most retailers have not done a great job leveraging their data to maximize customer loyalty and spend. There are exceptions – Kroger through 84.51 and the Shoprite organization – but for the most part, these activities have been executed through traditional media means or in store promotions.

The issue that retailers have now is that this war is being fought in the digital space – digital media targeting, personalization, suggestive selling, etc... and they are not prepared – especially when we talk about the best in the world (Amazon) doing it.

MWG has built out a suite of services to assist our clients in executing digital media strategies, leveraging their data and current customer loyalty and assisting our clients in transitioning traditional media budgets from the printed circular, TV and radio into the area where the consumer are – digital.

Coming soon...Part Two: "The Importance of Speed"




Now back to regularly scheduled editorial...

Albertsons CEO Gets Aggressive On Home Delivery

The Idaho Statesman has a profile of Albertsons CEO Bob Miller in which he says that his company is "aggressively" rolling out home delivery services at its stores around the country at least in part as a response to the proposed $13.7 billion acquisition of Whole Foods by Amazon.

Saying that he believes Amazon will make Whole Foods more effective, describing the supermarket chain as "inking like a rock" and needing a lot of help, Miller says that he believes that in the long run his bricks-and-mortar stores offer a competitive advantage.

"At the end of this fiscal year, we'll be in eight of the 10 biggest markets in the U.S. We're going to spend lots of money on home delivery. A place like Chicago, we're number-one share in the supermarket sector. ... We're going to work hard on home delivery, even though Amazon is, too, and lots of other people. We think we can compete in that space, because somebody can order the complete variety from our store. And we have countertop service."

Miller also says in the interview that Lidl's US launch offers additional competition: "There's no end to new competitors. There's no end to people closing and going away, too. ... I think it's the normal course in our business."

KC's View: It always has seemed to me that retailers like Albertsons have to act like they are the most vulnerable to the double-edged sword of competition from the likes of Amazon on one side and retailers like Aldi and Lidl on the other. It may not be true, but they have to act that way.

This creates a lot of pressures ... and the one thing they really have to do is act fast. Not every tactic is going to work out, but the broad strategy has to be finding a way to be extremely targeted about every customer, and extremely competitive for every dollar.

Editorial continues after a word from our sponsor...

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From ProLogic Retail Services...



Now back to regularly scheduled editorial...

Walmart Extends Bet On Self-Service Kiosks

Business Insider reports that Walmart is in the process of rolling out more of the self-service kiosks - dubbed Pickup Towers - that allow customers to retrieve items they have ordered online without having to deal with any of the retailer's employees.

The first version was tested in a Bentonville, Arkansas, store last year, and Walmart reportedly has installed the towers in 20 stores, with plans to add another 80 stores in the near future. While the existing towers are said to be for nonfood, the story also says that Walmart "recently started testing a similar concept for online grocery orders."

The kiosks are about 16 feet tall and eight feet wide, and, according to the story, "are typically near store entrances. To use the tower, customers scan a barcode on their purchase receipt. Within 45 seconds, a door on the machine opens, and the items appear on a conveyer belt." Walmart believes that the concept is "more versatile than pickup lockers — which Walmart has also tested — because it can adjust the size of the compartments where packages are kept."

KC's View: I have to say that while the towers seem a little cumbersome, there is an advantage in being able to handle packages of all sizes. There are some restrictions with the Amazon lockers ... and depending on the circumstances, that can be annoying to the shopper.

On the other hand, Amazon can put those lockers in a lot of places where those towers can't go.

Editorial continues after a word from our sponsor...

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From the National Grocers Association...


Now back to regularly scheduled editorial...

Chipotle Gets Another Piece Of Bad News

USA Today reports that Virginia health officials have confirmed a second case of norovirus in a customer who ate at a Chipotle restaurant there.

MNB reported yesterday that one customer who ate at a Virginia Chipotle had been diagnosed with having a norovirus, and that more than a hundred customers who ate there had complained of not feeling well, though there was not any conclusive proof that Chipotle was responsible.

At the same time, there were reports of rodents being spotted - and captured on cellphone videos - at one of its Dallas-area restaurants, with one customer saying that there were rodents "falling from the ceiling."

KC's View: I'm sure that Chipotle is going to survive. They're just going to have to do so without my money.

Editorial continues after a word from our sponsor...

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Now back to regularly scheduled editorial...

Amazon Works To Figure Out Where The Beef Is

Reuters reports that ahead of what it hopes will be regulatory approval of its $13.7 billion bid to acquire Whole Foods, Amazon plans to meet today "with a dozen U.S. ranchers, seeking to expand distribution of organic and grass-fed meats" once the deal becomes finalized.

According to the story, "Analysts and investors have speculated that Amazon is aiming to combine its expertise in order fulfillment with the grocer's facilities to build out delivery of fresh food, but the online retailer has not yet detailed its plans."

KC's View: There are a lot of paths that Amazon could take, but by meeting with the ranchers it clearly is looking to assuage fears that it could look elsewhere - like outside the country - for lower cost supplies of organic and grass-fed beef.

Amazon may want to stay inside the US when looking for supplies, but that doesn't mean that it won't be looking for efficiencies that can drive down costs and solve Whole Foods' "whole paycheck" problem.

The interesting thing to consider is what Amazon would do in the unlikely event that regulators block its Whole Foods move. Maybe find another way to go after the Whole Foods shopper? I wouldn't bet against it.

E-conomy Beat

• In the UK, the Guardian reports that "Tesco is going head to head with Amazon by extending its same-day online grocery delivery service across the UK," offering it to 99 percent of Britain's households.

To this point, Tesco only has been offering same-day delivery to its London customers.

According to the Guardian, "The move comes after the launch of AmazonFresh, which entered the UK market last year, raising fears that the dominance of the so called big four supermarkets – Tesco, Morrisons, Sainsbury’s and Asda – could be further eroded. Amazon, which has also teamed up with Morrisons in the UK, operates its service across London, Surrey and parts of Hampshire."

Editorial continues after a word from our sponsor...

Industry Drumbeat

From Webstop...

Now back to regularly scheduled editorial...

FastNewsBeat

Reuters reports on another case of an activist investment group pushing for the sale of a retailer - in this case, Barnes & Noble.

The investor is Sandell Asset Management Corp., which says that the bookstore chain would be better off with new ownership. The retailer has not been on a positive trajectory in terms of overall worth - the story says that in 2011 there was a proposal that valued the company at about $1 billion, but based on its current share price, it probably is worth barely more than half that.


• The Wall Street Journal reports that Walmart has made a deal to invest in a company called Plug Power, which makes fuel-cell-powered warehouse forklifts. The deal means that "Wal-Mart will roll out Plug Power’s forklifts and warehouse vehicles to 10 distribution centers this year, an investment the manufacturer valued at $80 million. Wal-Mart is already Plug Power’s biggest customer, with 5,500 of the company’s units in 22 warehouses."

What makes this interesting is that "in April, Amazon agreed to spend $70 million on Plug Power’s vehicles and received rights to buy as many as 55.3 million shares in the company, a 19% stake.

Which makes Walmart and Amazon partners, of a sort.

The Journal writes that "Wal-Mart will receive warrants to purchase the exact same number of shares, though its initial price will be higher than Amazon’s because Plug Power’s stock price has risen 63% since announcing its Amazon deal. Wal-Mart’s potential stake is 17%."


• The National Grocers Association (NGA) said yesterday that it has named Joe Williams, former vice president for regulatory and member services of the Texas Retailers Association, this year's recipient of the NGA Spirit of America Award. The award, presented at last weekend's annual Texas Retailers Forum, is one of NGA’s top honors and recognizes individuals for their dedication and service to the independent supermarket industry.


• The Chicago Tribune reports that Mexico's Grupo Bimbo has announced "an agreement to acquire Chicago-based East Balt Bakeries, which supplies buns to McDonald's and other fast-food chains, for $650 million."

Executive Suite

• The National Grocers Association (NGA) announced that Laura Strange, its Senior Director of Industry Relations, Communications, and Marketing, has been promoted to Vice President of Industry Relations, Communications, and Marketing.


• The Wall Street Journal reports that JC Penney has hired Jeffrey Davis - a former finance executive at Walmart and most recently CFO of Darden Restaurants - to be its new CFO. He succeeds Andrew Drexler, who served in the role on an interim basis after the resignation of CFO Edward Record.

Save The Date: An Invitation To Portland-Area MNB Readers

I may have been on vacation the past few weeks, but I've also been getting emails from Portland, Oregon-area MNB readers wondering if I am going to have one of those casual get-togethers that we've done here the past few years. I'm game if you are...

So, let's get together this Thursday night, July 27, at 5 pm, at Nel Centro, located at 1408 SW 6th Ave, in Portland. I'll plan on being there for a couple of hours - if the weather continues to be as amazing asa it has been the past few weeks, on the outside patio - and I hope that any MNB readers who'd like to stop by will do so.

Your Views: Tidy Profit

Yesterday we reported that Jana Partners, the activist investment group that invested in Whole Foods and essentially forced its sale to Amazon for $13.7 billion, now has sold its stake in the retailer for $300 million. The story notes that just before agreeing to the Amazon bid, Whole Foods CEO John Mackey labeled Jana as "greedy bastards."

This prompted one MNB reader to write:

We have been writing you for years saying Whole Foods was making more than it's fair share of profits charging exorbitant prices to consumers. The greedy bastards are being driven out not coming in and it's about time!




We also noted yesterday that Sears will begin selling its Kenmore line of appliances on Amazon.

One MNB reader reacted:

Maybe Sears (and more importantly – its real estate) is next on the Amazon shopping list after Whole Foods?

I doubt it.

And, from another reader:

I’ve bought many Kenmore appliances over the years, and like them. Personally, I’d never buy an appliance without seeing it in person first.




MNB reader Rita Held disagreed with some of the criticisms of Target that have been aired here:

I happen to love my local Target store here in Mountain View, CA   I don’t need fancy. I need practical - which is why I shop Target for everything from casual clothes, to bath and kitchen supplies, greeting cards.

Finally, a word from our sponsor...

Industry Drumbeat

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