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Wednesday, August 23, 2017

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Walmart And Google Team Up To Take On Amazon

In what the New York Times describes as a “testament to the mutual threat” that they face from Amazon, Walmart and Google are teaming up. Walmart products now will be available to people using the Google Express shopping platform, the first time that Walmart has made its products available in the US outside the walls of its own stores or beyond its own websites.

According to the Times, “The two companies said the partnership was less about how online shopping is done today, but where it is going in the future. They said that they foresaw Walmart customers reordering items they purchased in the past by speaking to Google Home, the company’s voice-controlled speaker and an answer to Amazon’s Echo. Walmart customers can also shop using the Google Assistant, the artificially intelligent software assistant found in smartphones running Google’s Android software.”

Walmart has thrown a lot of money and effort at its e-commerce business over the past year, primarily through its acquisition of Jet and integration of that online retailer’s pricing algorithms into its own site. It also has bought a number of smaller e-tailers, tested a number of delivery options, and has been rolling out click-and-collect services around the country. While Walmart’s total sales remain are much higher than Amazon’s, it has struggled to steal momentum from Amazon in the e-commerce realm, and now is facing potential implications from Amazon’s move into bricks-and-mortar with its proposed $13.7 billion acquisition of Whole Foods.

Meanwhile, the Times writes that “Google is a laggard in e-commerce. Since starting a shopping service in 2013, it has struggled to gather significant momentum. Initially, it offered free same-day delivery before scrapping it. It also tried delivery of groceries before abandoning that, too.

“If Amazon is a department store with just about everything inside, then Google Express is a shopping mall populated by different retailers. There are more than 50 retailers on Google Express, including Target and Costco. Inside Google Express, a search for ‘toothpaste’ will bring back options from about a dozen different retailers.” Google also has created a free shipping program that mimics Amazon Prime, but, like Walmart, it has struggled to slow Amazon’s momentum.

Marc Lore, who runs Walmart’s US e-commerce business, says, “We are trying to help customers shop in ways that they may have never imagined.”

KC's View: Well, in ways they’ve never imagined … unless, of course, they’ve shopped on Amazon using tools such as the Alexa/Echo system. If they have, maybe the Walmart-Google offering won’t seem quite so revolutionary.

But I don’t want to minimize the importance of the Walmart-Google deal. The fact is, effective coalitions that are both relevant and resonant to the shopper can, in fact, be game changers.

I have to wonder if this could be more problematic for Google, though. If you go on the Google Express site, there are a lot of retailers listed as being partners, including Costco, PetSmart, Bed Bath & Beyond, Stop & Shop, and Walgreens - and the vast majority of them compete with Walmart. (And each other.) This creates a kind of level playing field, which is not what Walmart really needs at this point … what it really needs is a differential online advantage.

I’ll be interested to see the degree to which Google and Walmart use this new relationship to create some marketing buzz … it can’t just be an August press release followed by online implementation. I think they’ve got to create the impression/illusion that this is what Tom Furphy and I call a “big swing” - a move that changes shoppers’ lives, and does so more effectively than Amazon.

Wednesday Morning Eye-Opener: A Burrito Too Far?

by Kevin Coupe

Eater reports that Starbucks has begun selling sushi burritos, though only in select stores in Seattle and Chicago.

“Sold as a Chicken Maki Roll,” Eater writes, “this creation is filled with sushi rice, shredded chicken, cucumber, pickled cabbage, onions, and avocado with tomatillo salsa and lime crema wrapped in a sheet of nori. It’s part of Starbucks’ new Mercato line, which includes other grab-and-go lunch items such as sandwiches and soups.”

Most versions of the sushi burrito - which has grown in popularity over the past year on both coasts - contain raw fish, which the Starbucks version apparently does not. “That’s something most people would (understandably) be wary of plucking from the refrigerated case at their local Starbucks,” Eater writes.

I kind of agree with that assessment … I was talking last night to one of my sisters, who happens to love sushi burritos, and she was not enthralled by the idea of having one at Starbucks.

I’ll be interested to see where this goes, and if the offering gets traction and is rolled out to other markets. Starbucks has had mixed success on the food side, and while I’m not sure this will be a game changer, I do have to give them credit for trying new stuff and pushing the envelope.

We’ll see. Either way, it’ll be an Eye-Opener.

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Worth Reading: Employee Benefits Can Benefit Employers

The Seattle Times has an interesting story about Amazon’s overhaul of its benefits program - making them more democratic, with the same benefits available to “operations and logistics workers paid by the hour and on the lower end of the salary scale” as to higher-end executives.

“Amazon’s move to revamp its parental-leave benefits coincided with a wider wave of perk enhancements among booming U.S. technology companies concerned about retaining talented employees, especially women, who are underrepresented in tech,” the story says. “Microsoft and Netflix had announced major improvements to their parental-leave policies earlier that year … It also came at a time when the fast-growing company started making its way to the top of the list of major employers among the Fortune 500, mostly due to furious hiring at its warehouses.”

The suggestion is that by creating a more generous and equitable benefits program, Amazon is endeavoring to become a preferred employer … it seems to understand that by doing so, it will demonstrate to existing and prospective employees that it is willing to invest in them. Which helps to convince them that they should feel invested in Amazon’s success.

You can read the entire story here.

Lidl Hits UK Market Share Benchmark

In the UK, the Telegraph reports that discounter Lidl has increased its market share there to 5.2 percent - which moves it ahead of Waitrose and into seventh place on the list of top UK supermarkets.

The growth at Lidl - as well as at discounter Aldi - is said to be coming mostly from families with children that are facing “rising food price inflation (that) continues to stretch household budgets.”

KC's View: Again … it will be a lot harder for Aldi and Lidl to have the kind of impact in the US that it has had in the UK. This is a much bigger, more diverse marketplace. But their potential impact, and ability to create instability in the marketplace, should not be underestimated by their competitors.

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Study: How Information Sways Product Purchasing Decisions

Nielsen is out with a new study pointing to the degree to which product information can impact shopper purchasing decisions.

According to its data, “39% of U.S. consumers say they would switch from the brands they currently buy to others that provide clearer, more accurate product information. Additionally, 73% of consumers surveyed by Nielsen say they feel positively about brands that share the “why behind the buy” information about their products.

“And what’s more, 68% say they’re willing to pay more for foods and beverages that don’t contain ingredients that they perceive are bad for them. In some cases, consumers are more interested in knowing what’s not included than what is included in the products they buy. In fact, 53% of consumers say the exclusion of undesirable ingredients is more important than the inclusion of beneficial ingredients.”

KC's View: No surprise here. We’ve always maintained that companies that tell their story in a more compelling way are in a better position to influence shopper behavior.

The MNB Walmart Watch

• The Wall Street Journal reports that financing company Affirm is negotiating with Walmart to offer installment loans to its customers.

The story says that “the development is the latest sign of retailers’ desire to reach new customers with limited credit histories, and of the intensifying competition facing credit-card providers … The financing at first would be available in select locations and to certain customers online, though it could expand later if the program proves successful enough. Affirm’s loans will be largely geared to costlier Wal-Mart items like tires and other purchases over $200, a person familiar with the matter said.”

Walmart already has a relationship with Synchrony Financial, which issues affinity credit cards for the retailer.

FastNewsBeat

Bloomberg reports that Blue Apron - threatened by Amazon’s entry into the business, troubled by a stock price that has gone down almost 50 percent since its recent IPO, and now facing potential class action suits that charge it with being less than forthcoming about some of its competitive issues - has now implemented “a temporary hiring freeze of salaried employees and fired part of its recruiting team just as it ramps up a new fulfillment center.”

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Executive Suite

• Macy’s announced that as part of a restructuring of its merchandising operations it has hired a new president - Hal Lawton, a former senior vice president at eBay, and SVP-merchandising at Home Depot, as well as a former associate principal at McKinsey & Co.

According to Reuters, “The restructuring will merge three units – merchandising, planning and private brands – into one division, which will be led by Chief Stores Officer Jeff Kantor. Macy's said the changes would strengthen data analytics and how it manages inventory and pricing.”

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Another Print Newspaper Bites The Dust

The Village Voice the independent/alternative weekly newspaper that was founded in 1955 and for more than a half-century provided both editorial coverage and advertising that highlighted the unique advantages and characteristics of Manhattan, has announced that it will end print publication sometime in the near future. Ownership said that in the future, the focus will be on other methods of disseminating information, as well as greater frequency.

The Voice has been the model for a vast number of other urban weeklies around the country, many of which also have gone under. It may have survived them, but the digital revolution probably made its print demise inevitable.

KC's View: If you’re not from the New York metropolitan area, or are not familiar with the Voice, then it may be difficult to understand the role that the paper played in the New York cultural and political scene.

For me, I would read it for the film criticism of Andrew Sarris - I used to love his long and sometimes digressive pieces about the movies, about his passion for the great auteurs, and even his disagreements with The New Yorker film critic Pauline Kael. He helped me think differently about the movies.

The New York Times lede captures the Voice influence perfectly:

Without it, if you are a New Yorker of a certain age, chances are you would have never found your first apartment. Never discovered your favorite punk band, spouted your first post-Structuralist literary jargon, bought that unfortunate futon sofa, discovered Sam Shepard or charted the perfidies of New York’s elected officials. Never made your own hummus or known exactly what the performance artist Karen Finley did with yams that caused such an uproar over at the National Endowment for the Arts … The print pages of The Village Voice were a place to discover Jacques Derrida or phone sex services, to hone one’s antipathy to authority or gentrification, to score authoritative judgments about what was in the city’s jazz clubs or off off Broadway theaters on a Wednesday night. In the latter part of the last century, before “Sex and the City,” it was where many New Yorkers learned to be New Yorkers.

I suspect it is over now, even if ownership claims to be looking for new ways to made the Voice relevant.

Your Views: Reservations

On the subject of the Amazon-Walmart competition, one MNB reader wrote:

When I order anything from Amazon with my Prime membership, even later in the day on a Friday, I'll get it Sunday. When I've tried to order the same item from Walmart, on a Friday, it would ship Monday, and I would get it Wednesday. Amazon still way ahead in my opinion, as far as e-commerce goes.




We had a piece the other day about how LL Bean continues to stick with its values and value proposition, even when it could cut corners a bit, make a few compromises, and make a lot more money. Which prompted MNB reader Chris Grathwohl to write:

E-commerce has created an avenue for greater visibility for shoppers, and driven buyers more towards price as the ultimate measuring stick. As a result, more and more companies are jumping on the price-play band wagon, and while their top line may show a short-term gain, the bottom line isn’t as fortunate.

It is refreshing to see that a company whose unique selling proposition is one of value over price is willing to stick to its guns. That has served LL Bean well in the past, and I’m guessing it will do so in the future as well.


Agreed.




And, MNB reader Monte Stowell chimed in on our discussion of whether movie tickets are a good value. (Some think they are way too expensive…I think they’re a good value, as long as the movies are good.)

Movie tickets are not too expensive. It is the cost of the concessions. Add a medium size popcorn and a medium size soft drink for two people, you have added about $20.00 to the cost of your movie tickets, totaling about $40.00. I would like to see someone who goes to a professional baseball, football, basketball, hockey, or a soccer game, and ask them how much they spent for the tickets, parking, and concessions, especially for a beer. All of a sudden, the math shows me that a movie, from a cost standpoint is a much better deal. Also, avoid the major chain movie complexes and go to the local movie theatre. The admission and the concessions are often 30-40 percent cheaper.

I went the other day with my son to see Logan Lucky at the AMC Loews in Port Chester, New York, which is our preferred theater. What I didn’t realize until we got there was that the movie was playing in a new Dolby Cinema that AMC has installed there, which offers better projection systems, superior sound, reclining seats and reserved seating. The tickets were also a lot more expensive - more than $19 apiece, as opposed to the roughly $13 charged in its more traditional theaters with digital projection.

I loved the movie … but I must admit that I was underwhelmed by the theater. The seats were okay, but not great … the projection and sound seemed only marginally better (though the difference might’ve been more evident with a different movie), and I’m just not sure it was worth spending almost 50 percent more per ticket.

I did like the reserved seating, though … but I also happen to know that if I go to the Living Room Theater in Portland, Oregon, I can get perfectly fine projection and sound, comfortable seats and reserved seating…for $11. Plus, there is a really good restaurant and bar, so I can enjoy a nice local ale or wine and some sushi while watching the movie.

I still think that movie theaters are a great value, as long as the movie is good. But I think that they have to be careful not to push too hard against the price ceiling.

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"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.

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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...

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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.

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