Sign up for the MNB Wake Up Call!

From The MNB Archives

Article Search:

Wednesday, June 07, 2017

  • Change Font Sizes:
  • A
  • A
  • A
  • A

Kate's Take: Filtering Out The Competition

by Kate McMahon

Ever since Peapod customers downloaded software from CD-ROMS to place a grocery order on their desktop computer back in 1989, you could consider them “early adopters.”

Given the current fierce competition in the online grocery sector, which is expected to grow five-fold over the next decade, it’s all the more interesting to see what those consumers want today.

Utilizing search data and customer feedback, Peapod last week expanded its Sort Feature, which allows shoppers to create their own digital aisle based on a variety of filters including brand preference, dietary needs, price and sales.

Peapod added four new nutrition filters – Non-GMO, Sugar Free, Vegan and Vegetarian – bringing to 16 the number of dietary preference filters on its site.

Carrie Bienkowski, the company’s chief marketing officer, noted that Peapod added an Organic filter in 2014 in response to key word searches. “It is now our most frequently used filter and all Peapod carts have at least one organic item.”

She told MNB that all evidence points toward increasing consumer interest and expectations in nutritional labeling, particularly regarding Non-GMO products. “People are much more aware not only about the food they eat but its provenance and sourcing.”

Those expectations certainly will play a role in the battle for grocery e-commerce, which includes such heavyweights as Amazon Fresh and Wal-Mart, online competitors Instacart and Fresh Direct, and major retailers such as Kroger, ShopRite and more.

A report from the Food Marketing Institute and Nielsen found that around a quarter of American households currently buy some groceries online, up from 19% in 2014, and more than 70% will engage with online food shopping within 10 years.

But will that grocery e-commerce be click-and-deliver? Or will it be click-and-collect at a brick-and-mortar store, a mini-warehouse or even a 24-hour, automated, refrigerated kiosk, as being tested by Wal-Mart in Oklahoma?

As reported on MNB yesterday, IRI is out with a new study saying that the click-and-collect e-commerce model is expected to be "a core driver of growth in consumer packaged goods” in because it combines the convenience of online shopping with fees or delays and delivery.

Peapod, which is owned by Ahold Delhaize and operates in 24 markets, actually now offers both options, including more than 200 pickup sites at Ahold’s Stop & Shop and Giant store locations. That ability certainly gives them a foothold in the future. Interestingly, its two markets showing the most growth in the past year couldn’t be more different demographically – New York City and central Pennsylvania.

While competitors are duking it out over the immediate gratification market – a basket of ingredients at your door in two hours – Peapod is committed to enhanced shopping tools, convenient meal solutions and the “big weekly shop.”

I think it will be fascinating to watch this sector as both Amazon and Wal-Mart become increasingly aggressive, which will pressure other competitors to match prices and delivery options. I do think that Peapod will have to do a better job marketing itself; both the Content Guy and I live in communities that are Peapod markets, and we were talking just the other day about how little promotion the service seems to get. (By comparison, Blue Apron seems to promote deals every other week.)

Two things are certain – the margins in grocery e-commerce are razor thin and the logistics leave no room for error.

As Bienkowski put it: “You have to deliver – literally and figuratively.”


Comments? As always, send them to me at kate@morningnewsbeat.com .

Wednesday Morning Eye-Opener: Core Problems

by Kevin Coupe

Maybe it's just me, but I sense a rift growing between Apple and me.

Not a big rift. I'm writing this on an aging MacBook Pro, which soon will replaced by a newer MacBook pro. I love my iPhone, iPod and iPad, and even my Apple TV. I'm an Apple guy, and I don't see that changing.

But ... this week, when Apple announced its newest product - the Home Pod, which is designed to compete with the Amazon Echo/Alexa and Google Home systems - I found myself thinking that it didn't seem terribly relevant.

The New York Times notes that the Home Pod "ticks all the Apple-y boxes: It’s very pretty; it’s about twice the price of the Echo; and it has much better sound, including the ability to create a kind of surround sound customized to your room." But while the Home Pod seems like it does a lot of the same things that my Echo does in terms of providing information, controlling smart-home devices and accessing music, it also seems like the Apple ecosystem to which it is tethered is a lot more limited than Amazon's. (It doesn't help that Siri is the name to which the Home Pod responds; Siri has been around for a long time, but I've generally described the Echo/Alexa system as a "Siri that actually works.")

That - in addition to the $349 price tag - just makes the Home Pod seem mildly redundant. And maybe irrelevant.

And then there was something else - while Apple CEO Tim Cook announced the Home Pod at a developers' conference this week, it actually won't ship to consumers until December. That just seems like a long time to wait, if indeed I even wanted one.

I'm willing to be persuaded by Apple that I need the Home Pod. But it is going to take some persuasion, and they're just not there yet.

What they have to do is give me an Eye-Opener.

Then again, maybe it's just me.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

From MyWebGrocer...

Now back to regularly scheduled editorial...

Editorial continues after a word from our sponsor...

Industry Drumbeat

From ProLogic Retail Services...



Now back to regularly scheduled editorial...

Amazon Makes Prime Play For Low Income Shoppers

Amazon yesterday announced that it will offer discounted Prime memberships - which gives access to two-day shipping as well as video and audio content and other benefits - to low income consumers in the US, effectively ramping up its e-commerce competition with a newly e-aggressive Walmart/Jet.

The Wall Street Journal reports this morning that the target makes up almost 20 percent of the US population, which is made up of people "who obtain government assistance with cards typically used for food stamps." The reduced rate Prime membership will cost these folks $5.99 a month, much less than the $10.99-a-month or $99-a-year rates charged to regular customers.

The Journal story notes that "Wal-Mart counts on shoppers who receive government assistance for a large percentage of sales. The retailer generated about $13 billion in sales last year from shoppers using the Supplemental Nutrition Assistance Program, or SNAP, accounting for around 18% of the money spent through the program nationwide ... Already, low-income consumers, typically those earning $50,000 or less per household, are the fastest-growing group of Amazon Prime customers, according to a survey by Robert W. Baird & Co. analysts."

Low-income shoppers "may face several impediments to shopping online: a lack of access to the internet, banking resources like credit cards, and safe places for package delivery," Journal writes. "In addition, food stamps aren’t yet eligible for payment online, a factor that has driven much of that traffic to Wal-Mart, dollar stores and other brick-and-mortar shops.

"These consumers’ habits are changing quickly. Most low-income consumers have mobile phones. Amazon now allows customers to load cash onto their accounts at physical locations. United Parcel Service Inc. has established package pickup locations, while Amazon has added delivery lockers around the country."

KC's View: There isn't much question that Walmart/Jet have become a lot more aggressive and a potentially much stronger competitor for Amazon ... but there have been a lot of questions about whether Walmart/Jet could come up with a strong response to Amazon Prime, which drives a lot of its growth.

Walmart/Jet announced the other day that it will test the use of employees to deliver products to online shoppers on their way home from work ... apparently feeling that it can best compete by closing the last mile between retailer and shopper. That's where it believes it has an advantage over Amazon. Now, Amazon is going after Walmart where it lives.

This is going to be fun. (Though maybe not for the retailers that get caught in the crossfire...)

Target Hopes That Chicago Will Be The City That Works - For It

The Chicago Tribune reports that while Target has been suffering on a number of fronts, including sales and profits declines, the Windy City is critical to its reinvention plans.

According to the story, "Under attack from giants Amazon and Walmart, Target is fighting back by opening a raft of mini-stores in area neighborhoods. Each is no larger than 40,000 square feet, compared with Target's 175,000-square-foot superstores. By 2018 the chain is expected to have at least 10 mini-stores, about 7 percent of the company's expected 130 small-store network, operating throughout select Chicago-area neighborhoods and more densely populated suburbs.

"While this slimmer shopping concept won't single-handedly defeat the competition, the approach is an essential component of Target's multibillion-dollar about-face. That effort also includes sharpening its online strategy, refurbishing many of its huge stores and, Target management hopes, greatly improving earnings."

The story describes the stores as "tucked into densely populated communities with nearby apartments, condos, public transportation hubs, downtown centers or universities. They are trimmed-down versions of Target's flagship superstores, offering abridged versions of the mainstay lines of apparel, food and beverages, office supplies, housewares, hardware and electronics." And, they serve "as neighborhood pickup sites for Target's online customers."

KC's View: One of the things about the story that grabbed my attention was the writer's observation that while the stores seem well-stocked, efficient and staffed with friendly employees, there was some lack of discipline about keeping things looking sharp. I'm hopeful that Target will be able to turn things around, because consumers are better served if it is a viable competitor in the marketplace, but I don't think there is any room for error. Any lack of discipline could end up being like a small virus that spreads and infects the entire company.

Sears To Close Another 66 Stores

CNBC is reporting this morning that Sears Holdings will close another 66 stores, on top of the 180 closings it already has announced for this year. The closures will consist of 49 Kmarts and 17 Sears stores.

The move is seen as yet another part of management's stated desire to return the company to profitability and viability, even though Sears already has conceded in a filing with the US Securities and Exchange Commission (SEC) that there is "substantial doubt" about its ability to continue to exist under the current fiscal conditions.

The closures should take place by July.

KC's View: I don't even know what to write about Sears anymore. It just seems so over.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

From Samuel J. Associates...Better To Light A Candle Than Curse The Darkness...


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.

Now back to regularly scheduled editorial...

Worth Reading: Blue Apron, Uncertain Future?

Fast Company has a story that questions whether meal kit companies - which are popular right now, with Blue Apron announcing its plans to go public - have the right stuff to be able to remain relevant and viable five years from now.

"While interest in meal kits is growing, there isn’t strong evidence that most people are ready to give up entirely on the grocery aisle," Fast Company writes. "Meanwhile, Blue Apron’s marketing department is spending an exorbitant $94 per customer to get people to sign up for its service–and in the last year, its customer growth rate has actually slowed. So is Blue Apron really cut out to be a public, stand-alone company?"

One possibility: "Blue Apron and many meal kits are rigid in format and as such largely supplemental to traditional grocery stores. That makes them potential targets for acquisition by grocers with a digital strategy."

Good piece, and you can read it in its entirety here.

Editorial continues after a word from our sponsor...

Industry Drumbeat

From the Network of Executive Women...


Now back to regularly scheduled editorial...

FastNewsBeat

• The Cincinnati Enquirer reports that "Kroger plans to open a Downtown supermarket in the summer of 2019, giving neighborhood residents, city officials and boosters what they've sought for decades." The two-level, 45,000-square-foot supermarket will be one block east of Kroger's headquarters, and will include a second-level wine and beer bar.


USA Today reports that as German discounter Lidl opens stores in the US, it will feature an fashion line designed and promoted by supermodel Heidi Klum, who has a high media profile because of her "Project Runway" TV series.

"Klum, who is German, doesn't seem fazed by seeing her apparel show up in the place normally associated with stacks of peanut butter jars and or boxes of Kleenex," the story says, quoting her as saying, “Lidl is known for making quality products at affordable prices and I’m proud to partner with them on this fashion collaboration."

Editorial continues after a word from our sponsor...

Industry Drumbeat

From Webstop...

Now back to regularly scheduled editorial...

Executive Suite

• Upstate New York-based Tops Friendly Markets announced that Edward Rick, its manager of consumer insights and analytics, has been promoted to the role of director, consumer marketing & digital, responsible for the development, implementation, and execution of consumer marketing and digital/interactive marketing programs.

Your Views

...will return.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

Stater Bros. Adopts ReposiTrak Food Safety Compliance Management Solution

SALT LAKE CITY - Stater Bros. Markets announced today that it has chosen ReposiTrak, Inc., the leading provider of Compliance Management and Track & Trace solutions for food and dietary supplement safety, to manage regulatory and business documentation compliance within its supply chain.

“Our top priority at Stater Bros. is to provide the safest and highest quality products for our customers,” said Dennis McIntyre, Executive Vice President of Marketing at Stater Bros. “ReposiTrak’s automated system will enable us to better manage our growing list of documents we require from our approved suppliers in order to verify their good business and safety practices.”

ReposiTrak, a wholly owned subsidiary of Park City Group, helps manage regulatory, financial and brand risk associated with issues of safety in the global food, pharma and dietary supply chains. Powered by Park City Group’s technology, the platform consists of two systems: Compliance Management, which not only receives, stores and shares documentation, but also manages compliance through dashboards and alerts for missing or expired documents; and Track & Trace, which quickly identifies product ingredients and their supply chain path in the unfortunate event of a product recall.

For more information about how to join the rapidly expanding community of retailers and suppliers using ReposiTrak's robust safety and compliance solutions, go to ReposiTrak.com.


Now back to regularly scheduled editorial...

Editorial continues after a word from our sponsor...

Industry Drumbeat

"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.

Now back to regularly scheduled editorial...

Editorial continues after a word from our sponsor...

Industry Drumbeat

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.

Now back to regularly scheduled editorial...

Finally, a word from our sponsor...

Industry Drumbeat

"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.

PWS 54