Join the MNB Community.
Get a Wake Up Call each morning...
Explore the MNB Archives
Explore the MNB Archives
From The MNB Archives
Friday, December 16, 2016
by Kevin Coupe
Interesting piece in Barron's about how "Expedia ’s recent purchase of vacation-rental company HomeAway has given it access to the same growing market as Airbnb," allowing it to compete better for customers that it was losing to a company that was disrupting the category. And in doing so, it is applying discipline to the HomeAway business model without wrecking the components that made it work in the first place.
Here's how Barron's explains it:
"Before Expedia bought the company for $3.9 billion, HomeAway charged homeowners a fee every year to list their properties, but that brought in too little revenue. In 2015, HomeAway had $15 billion in gross bookings (the total amount people spent to book rooms on its platform) but only $500 million of that came back to HomeAway in the form of revenue. Airbnb had $8 billion in gross bookings, but a reported $900 million in revenue, according to CLSA. So HomeAway got 3.3% of the value of its bookings, while Airbnb got 11.3%.
"Already Expedia has begun to change the way HomeAway, which has more than one million listings, makes money. To close its “take-away” gap with AirBNB, HomeAway now charges a booking fee to property owners and a renting fee for the traveler, just like Airbnb."
And "what’s more, Expedia plans to cross-sell HomeAway listings on its massive Expedia network. That makes it a threat to Airbnb, because vacationers who don’t care if they stay at a hotel or a home can now simply search one site."
It is a good example of how things change. Remember that a certain point, Expedia was the disruptor ... and then, because evolution is inevitable, it had to figure out a way to compete against players who saw opportunities where it did not.
This time, it was Expedia. it has happened to a wide variety of players. The next time it could be you.
It'll be an Eye-Opener.
The Seattle Times reports that Amazon, focused on "upending the archaic ways of the trucking business," is working on a new service "that would connect truck drivers with shippers, a move that would highlight the company’s multi-pronged foray in the world of logistics."
Such a service, the story says, would be a marked departure in an industry "where brokers usually make these connections using old-fashioned phones and email, for a fee."
There are a couple of interesting side notes to this story.
For one thing, the development of the trucking application is taking place within an Amazon department called, rather prosaically, “Middle Mile Transportation Technology," which seems like it might cover a lot of territory over the long run.
And, even more intriguingly, it appears that the Amazon initiative could be competing with a startup business in which Amazon CEO Jeff Bezos has made an investment. The startup is called Convoy, is run by former Amazon employee Dan Lewis, and has raised more than $18 million - including some from Bezos' personal investment company. Convoy, the story says, "develops software that matches trucking companies that have empty vehicles with companies that need to ship freight."
This is fascinating on all sorts of levels, not least because I suspect that Bezos sees no conflict between what Amazon is doing and what Convoy is developing; it is all about making multiple intelligent bets that will move the needle in significant and sustainable ways.
And that's the real point. Amazon - and Bezos - sees industries where there appear to be inefficiencies and legacy-based systems, and it looks for ways to disrupt in a way that will serve the consumer in the long-term. That's what this is all about - finding niches and turning them into chasms where Amazon can build bridges that will make a difference.
The Journal News reports that Wegmans announced plans for a new 125,000 square foot store that it will build in Harrison, New York, less than 30 miles north of midtown Manhattan and just three miles south of the Connecticut border, in the heart of suburban Westchester County.
The 92-store retailer said that it will build the unit on a 20-acre parcel located in the middle of a number of office parks. It will replace a three-building office complex that will have to be demolished to make room for the store.
Approvals still need to be obtained from local boards and regulators, and no timeline has yet been set for development.
The Journal News notes that in an interview last year, CEO Danny Wegman said that he wanted to open a store in Westchester: “We’ve been looking for over 20 years. Hopefully, someday, we’ll find one. We’d love to be there. We’ll get there. We’re pretty tenacious. That’s all I can say. Wish we had one there.”
This will almost certainly take a couple of years to come to fruition, but it has the potential for throwing a significant monkey wrench into the local competitive scene; Wegmans is very good at accomplishing that rare feat - combining a strong price/value image with a foodservice operation perceived as being far better than the average supermarket. Such a store cannot help but affect the likes of Stop & Shop and Fairway and ShopRite and Stew Leonard's - these companies may not have stores in the immediate vicinity, but Wegmans is well-established as a destination shop, and its stores tend to have a pretty broad reach.
Here's the one thing all these retailers have to do, right now - begin competing as if Wegmans were opening a store tomorrow. Figure out all its weaknesses and strengths, and start going after them now. I know this area well ... it is about 12 miles from where I grew up, and not much farther from where I live now. It'll be fun to watch how this develops.
The Seattle Times has a story about what it calls "a host of technological innovations" that traditional bricks-and-mortar retailers are embracing as a way "to draw and retain customers whose shopping habits are increasingly shifting online."
For example, "Product eGifting, in which customers can choose a gift from a retailer’s website to send directly via email, are among the technological features retailers have added. Shopping centers such as Alderwood mall have websites and apps that can tell customers which parking lots are full and which have spaces." And Nordstrom, no e-commerce novice, has launched new features on its mobile app, "including the ability to reserve items online to try on in stores, search for items by preferred store, and identify exact or closely matching items from Nordstrom’s stock by taking a photo of an item."
I don't know about you, but I'm getting to the point where when retailers don't have these kinds of options, I begin to wonder why. It is like they've given up on the kinds of relevance that is almost mandatory in today's marketplace. Finding new and interesting technological ways to appeal to shoppers, especially the shoppers of tomorrow who depend on which things, is an absolute requirement.
In Canada, the Financial Post reports on how Costco is opening a new Costco Business Centre in Toronto, designed to "disrupt the business of traditional office and restaurant supply distributors ... The move makes a direct play for small restaurant, business and convenience store owners who buy from Costco because they are too small to do business directly with a company such as Unilever, and for office supply companies whose business models are based on higher margins."
The story notes that the store has "an assortment that includes bulk grocery items, office furniture and supplies, professional cooking equipment and cleaning products ... With 80 percent of the business centre’s merchandise consisting of items not sold in its warehouses, there is also little concern of overlap between the company’s two businesses."
Scheduled to open in March, the store is Costco's first of the kind in Canada, is open to all Costco members, and is "part of a rapidly expanding business offshoot for Costco in the US ... Costco operated 11 business centres in the fiscal year ending Aug. 28 and will have 15 open by the end of 2017, including the Canadian outlet."
Winston-Salem, NC -- ProLogic Retail Services, the largest provider of loyalty marketing solutions to independent grocers, announced the extension of its contract with Lowes Foods, which operates close to100 full-service supermarkets in North Carolina, South Carolina and Virginia.
Through the Fresh Rewards program, ProLogic enables Lowes Foods to segment its shoppers, identifying its top shoppers and understanding their purchase patterns. With this information, ProLogic enables Lowes Foods to run targeted promotions that are specifically tailored to individual shoppers or groups of shoppers. These targeted promotions help Lowes Foods to retain its best shoppers and expand their purchases throughout the store.
"We are very pleased to extend our longtime partnership with ProLogic," said Tim Lowe, President of Lowes Foods. "ProLogic delivers great value to Lowes Foods with a powerful, flexible loyalty marketing platform that enables us to create and execute intelligent promotions. The Fresh Rewards program is a cornerstone of our relationship with our guests and has proven highly effective in helping us retain our top shoppers and increase their purchases."
For more information, click here. Or contact Lance Recker at email@example.com or at 561-454-7646.
• Kroger yesterday announced what it called "a one-time Voluntary Retirement Offering for certain non-store associates ... Eligibility for the Voluntary Retirement Offering will generally include administrative associates who meet certain criteria related to age and years of service as of December 1, 2016. The offer does not include store and district associates, senior officers, and supermarket division presidents.
"Approximately 2,000 non-store associates are eligible for the Voluntary Retirement Offering. Because it is voluntary, savings and cost will be based on the number of associates who accept the offer between now and early March, when the consideration periods expire."
CEO Rodney McMullen described the move as being consistent with the company's Customer 1st Strategy, which endeavors to establish cost controls in areas that do not impact customer service.
• Reuters reports that Kevin Grace, Tesco's former group commercial director in the UK, "will not face charges from the Serious Fraud Office (SFO) over the accounting scandal."
Grace left the company in 2014, just after details about the fraud began to emerge, showing that the company had systemically understated costs and overstated revenues as a way of making its financial numbers look better.
"In October," Reuters writes, "three former senior executives of Tesco accused of fraud and false accounting were told they would face trial next September. Christopher Bush, who was managing director of Tesco UK, Carl Rogberg, who was UK finance director, and John Scouler, who was UK food commercial director, were charged by the SFO in September with one count of fraud by abuse of position and one count of false accounting."
Craig Sager, the longtime National Basketball Association (NBA) sideline reporter who was known for asking probing questions, exuberant enthusiasm, and clothing that recalled the fashion stylings of the great Bud Collins (a reference that only people of a certain age and a few shared enthusiasms will appreciate), passed away yesterday. He was 65, and had been battling leukemia - in public and valiant fashion - since 2014.
From MorningNewsBeat, September 15, 2016:
A US Department of Labor report recently revealed that there were 5.2 million jobs available in the United States ... which was said to be the highest level of job availability since these specific numbers started being tracked back in 2000. This despite the fact that there remains considerable debate, much of it cacophonous, about national unemployment and under-employment.. The problem, one expert said, is that what we have in this country is "one of the biggest mismatches between skills and lack of qualified help available in the nation's history."
Samuel J. Associates knows how to make a good match.
The kind of match that can help a business achieve new heights and higher levels of differentiation by identifying the people who don't just fit into a culture, but help create a culture of excellence. The kind of match that can help individuals identify companies where they are empowered to make a difference, and move the needle on customer service, product development, marketing, merchandising and/or technological advancement.
Don't just settle. Don't just make the easy choices. Allow Samuel J. Associates to work for you. We don't just believe in such people and companies. We actually put them together. And we have the track record to prove it.
Click here for more information from Samuel J. Associates.
Got the following email from an MNB reader:
Wynn Resorts’ move to install Amazon Echo digital assistants in its Las Vegas hotel rooms is yet another shrewd method of getting hotel customers to sample a new product or service while staying in a room…..and motivating a decision by the customer to follow up with a purchase of the product or service after they return home.
Two months ago we stayed at a relatively new Westin Hotel in Edina, MN for several days and the hotel is located very close to a beautiful trail that is convenient for walking and running. I had forgotten my workout clothes and the hotel had an offer to provide workout clothing delivered to the room for a nominal fee. When the clothing arrived at my room, I received a shirt, shorts, and new pairs of New Balance socks and shoes. Included in the bag was a coupon for $25 off a pair of shoes if ordered directly from New Balance’s website.
I had never owned or sampled a pair of New Balance shoes in my life, but I wore these shoes for four miles of walking each of the three days we stayed at the hotel. I was tremendously impressed with the shoes and used the coupon to purchase a pair for myself after I returned home. It would never have occurred to me to sample or purchase this product had I not been given the opportunity to wear these shoes while staying at the hotel. More than that, New Balance was able to convince me to purchase the product directly from them, rather than purchasing the shoes from a local retailer.
I have no doubt that Amazon is counting on the same types of experiences with Echo devices in hotel rooms.
And, from another reader:
It sounds like retailers better hire Alexa or replace her - but you can't ignore her!
Both readers are right.
Yesterday's FaceTime video was about a new technology from Skype that allows for the real-time translation of conversations taking place on cell phones and landlines. Which I wrote...
Sounds a lot like Star Trek's universal translator technology, which allowed humans to speak and understand Vulcans, Klingons, Romulans, Andorians, Tholians and Bajorans ... pretty much everybody but those pesky Tamarians, who always wanted to speak in allegories, making actual language less the issue. (But that's a story best left for another time...)
Prompting a nicely original email from an MNB reader:
Kadir beneath Mo Moteh is the beast at Tanagra.
Truer words never have been spoken.
The Seattle Seahawks defeated the Los Angeles Rams 24-3 in Thursday Night Football action last night, clinching the NFC West title for the Seahawks. It is the third NFC title for Seattle in four years.
It is near certain that the latest Star Wars movie, Rogue One, is going to be one of the biggest hits of the holiday season and the year. It is nice to be able to report that this is not a case of a studio (in this case, Disney) simply cashing in on an established franchise with a movie that has familiar elements but little originality or style. In fact, Rogue One has a lot of familiar elements and even some familiar faces (some of them created via computer technology), but it also has its own style and tries to be as original as possible within the boundaries of an existing and popular mythology.
In the event you've been living in a cave, or in another galaxy, in recent months, let me recap the Rogue One backstory. Remember how in the original Star Wars there was a crawl in the beginning that explained how in a period of civil war with rebel forces struggling against the totalitarian Galactic Empire, "Rebel spies managed to steal secret plans to the Empire’s ultimate weapon, the Death Star, an armored space station with enough power to destroy an entire planet?" And remember how that original StarWarsactually was positioned as episode four in a saga, and how episode three, made decades later, ended with the "birth" of Darth Vader, setting up the conditions for the bloody rebellion?
Well ... Rogue One essentially is the story of what happened between episodes three and four, explaining to us how the Death Star plans were stolen and why one tiny space fighter was able to destroy such a fearsome space station all by itself. In other words, it is all backstory - Rogue One is not part of the main mythology, and therefore does not have some of the consistent touches (like the opening text crawl and John Williams music) that we've seen in the seven main films to date.
But it is a thrilling backstory, albeit one that is grimmer and darker than the main Star Wars films to date. No Wookies or Ewoks or other child-friendly characters here, though the movie's heroine, Jyn Erso, certainly is someone to whom children and adults can relate - she's tough and rebellious and follows a character arc from cynicism to hope that reminds us of Luke Skywalker and Rey while being an entirely original creation by actress Felicity Jones.
I hate plot-spoiling movie reviews, so let me just tell you this much. Rogue One is very much a war movie; while not bloody or graphic, we're aware of the fact that armed conflicts cost lives, that they are gritty and messy, that they have enormous stakes, and that all the good guys don't always win or survive. In the original films, destruction often was seen from light years away; here, when a city is destroyed, we see it from the ground, and it ain't pretty. (It is, however, visually spectacular.) The picture is directed with great assurance by Gareth Edwards, written with an eye for detail by Chris Weitz and Tony Gilroy, and features some terrific, sharply etched performances by the likes of Diego Luna, Ben Mendelsohn, Forest Whitaker, Mads Mikkelsen, and Donnie Chen, as well as Jones. (This is a far more diverse galaxy than the one originally conceived by George Lucas, and that's a good thing.)
Mostly, Rogue One is exciting and fun and a worthy component of the Star Wars saga, even if a bit of a narrative detour. (In 2017 we'll get episode eight in the main saga, and in 2019 another standalone film that will feature a young Han Solo. I'm already excited.) And it has a certain heavy-breathing baddie who shows up in a few brief scenes as a kind of connective tissue that reminds us of where we've been and where we're going, and how far he most go to obtain redemption.
One other Rogue One note. There have been some suggestions in social media that the movie has scenes that were rewritten and reshot so that Rogue One is anti-Trump. The people making these comments, and calling for a boycott, are fools. The only good news is that their incessant whining will be about as sustainable as Jar Jar Binks.
That's it for this week. Have a great weekend, and I'll see you Monday.
"GOOD IS NOT GOOD WHEN BETTER IS EXPECTED"
In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see Main Street through a constantly evolving technological, demographic, competitive and cultural prism. These issues all combine to create an environment in which traditional thinking, fundamental execution, and just-good-enough strategies and tactics likely will pave a path to irrelevance; Coupe lays out a road map for the future that focuses on differential advantages and disruptive mindsets, using real-world examples that can be adopted and executed by enterprising and innovative leaders.
"Kevin inspired our management team with his insights about the food industry and his enthusiasm. We've had the best come in to address our group, and Kevin Coupe was rated right up there. He had our team on the edge of their chairs!" - Stew Leonard, Jr., CEO, Stew Leonard's
Constantly updated to reflect the news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed by Coupe’s 30+ years of writing and reporting about the best in the business, "Good Is Not Good When Better Is Expected" will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.
Want to make your next event unique, engaging, illuminating and entertaining? Start here: KevinCoupe.com. Or call Kevin at 203-662-0100.