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Thursday, October 25, 2018

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FaceTime with the Content Guy: Tattoos, Bikini Waxes & Value Propositions


This commentary is available as both text and video; enjoy both or either ... they are similar, but not exactly the same. To see past FaceTime commentaries, go to the MNB Channel on YouTube.

Hi, Kevin Coupe here and this is FaceTime with the Content Guy.

As you can imagine, I get a lot of press releases. Most of them are from people who want free publicity for this new product or that new service, and quite frankly, I don’t pay attention to the vast majority of them because I don’t want to waste your time. Let other websites and print publications do that. (And they do.)

I’m mostly interested in scenarios that tell us something about where the world is going, and what it means to businesses and consumers. That, to me, isn’t a waste of time … it’s just my job to point out the relevance and resonance.

But sometimes a press release comes along to which I feel the need to pay attention…

For example: There was a press release sent to me recently by the folks at Avya Skincare that purported to reflect a consumer survey about the categories for which shoppers are looking for a bargain, and those for which they are mostly concerned about quality. I don’t blame them for doing the survey - knowing one from the other can help a retailer make a determination about strategy and tactics.

For example, when it comes to quality being least important, here are the rankings:

Manicures.
Pedicures.
Tattoos.
Bikini Wax.
Eyebrow Wax.
Hair color salon service.
Makeup.
Facials.
Alcohol.
Maid service.


Where quality is most important:

Condoms.
Car repairs.
Electrical repairs.
Dentists.
Doctors.
Lawyers.
Education.
Accountant.
Car.
Financial advisor.


Where bargains are least important:

Condoms.
Doctors.
Tattoos.
Therapy.
Dentist.
Financial advisor.
Eyebrow wax.
Lawyer.
Bikini wax.
Accountant.


Where bargains are most important:

Clothes.
Cars.
Toys.
Toilet paper.
Magazines.
Smartphones.
Books.
Concert tickets.
Electronics.
Shoes.


Now, a lot of this I agree with.

But I have to admit that there are a few areas where I’d differ from the respondents … mostly when it comes to quality

If I’m going to get a tattoo - which I’m not - I think quality is critically important. Same with a bikini wax, which I have no intention of getting. And, for that matter, alcohol…which I do buy. Occasionally.

There also are some weird contradictions - like when it comes to a tattoo, how can quality be less important, but so is getting a bargain? Is the tattoo business someplace where you don’t get what you pay for?

Anyway, I thought this was an interesting survey … not entirely conclusive, but certainly though provoking for anyone trying to figure out what customers’ priorities are. Just keep in mind that there may be enormous differences depending on the state, city or even neighborhood where you live.

That’s what is on my mind this morning, and, as always, I want to hear what is on your mind.

Thursday Eye-Opener: Temperature Rising

by Kevin Coupe

The New York Times has a story about a new internet-connected thermometer that syncs up “with a smartphone app that allows consumers to track their fevers and symptoms.”

The thermometer comes from Kinsa, a tech startup, and Clorox, which is licensing information from the company. Just in time for flu season.

That information, the Times writes, shows “Clorox which ZIP codes around the country had increases in fevers.” Clorox is then able to target those geographic areas with more ads for products such as disinfecting wipes that residents may find more relevant.

The story goes on: “Kinsa, a San Francisco company that has raised about $29 million from venture capitalists like Kleiner Perkins since it was founded in 2012, says its thermometers are in more than 500,000 American households. It has promoted the usefulness of its ‘illness data,’ which it says is aggregated and contains no identifying personal information before being passed along to other companies.

“It is unique, Kinsa says, because it comes straight from someone’s household in real time. People don’t have to visit a doctor, search their symptoms on Google or post to Facebook about their fever for the company to know where a spike might be occurring.”

Yikes.

To be fair, the Clorox-Kinsa tie-up is not an isolated case. Amazon has been granted a patent application, the Times writes, that would allow the retailer to “recommend chicken soup or cough drops to people who use its Echo device if it detects symptoms like coughing and sniffling when they speak to it.”

Like I said. Yikes.

I’m not sure where the line is, at what point I’m going to start feeling like it is all too much. Will it be when the thermometer or the Echo actually are able to place orders for the appropriate medicines to cure whatever ills I may have?

Probably. Though there’s a part of me that would be intrigued by such functionality.

The possibilities, it seems, are endless. All of them with the potential to be Eye-Openers.

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Inside Walmart’s New Tech-Empowered Ecosystem

Forbes has a story quoting , Oliver Chen, a Cowen and Company analyst covering retail, assessing Walmart’s digital transformation:

““The Wal-Mart brand is at the center of a new ecosystem which integrates shopping, services, health and wellness, and first party and marketplace e-comm …. Walmart is seizing the moment to transform through innovation and utilization of unique store, grocery and people assets. We believe new guidance appears achievable and beatable.”

In evaluating Walmart’s approach to acquisitions - in building this new ecosystem, it has bought companies that include Jet (and then installed its founder, Marc Lore, to run all its US e-commerce operations),Bonobos, Moosejaw, Eloquii, Bare Necessities and Flipkart (in India - a game-changing deal), Chen writes that they “resonate with consumer values, have transparency and authenticity as well as artisanal qualities.”

Walmart, Chen writes, “is focused on creating a tech-empowered store to improve both the shopping experience as well as support associate productivity, with the core message of removing friction from the way customers interact with the store … Management believes that executing well [on the fundamentals] will help WMT become a world class omni-channel retailer and will turn physical stores into fulfillment centers.”

At the same time, Diginomica has a piece about Lore and his aspirations for Walmart’s e-commerce business in which he is quoted as saying:

• “We’ve got 4,700 stores within 10 miles of 90% of the population…If you look at delivery speed, it’s moving towards same day. Customers want product faster than ever before, and nobody is better situated to deliver same day. We can deliver same day the entire supercenter – fresh, frozen and everything else – at a lower Cost-to-Serve than anyone else…”

• “I think we’re in a really, really good place to start playing offense with same-day delivery, but we’ve actually started to play. At the beginning of the year we started to roll out same-day delivery and the stores’ team has done an amazing job of rolling this out with speed. By the end of this year 40% of the US will have access to same day delivery – that’s in over 100 markets – and by the end of next year over 60% of the population, that’s about 200 markets.”

And, regarding the company’s Store 8 incubator initiative, Lore says:

“The idea is over a long period of time to continue to incubate and buy and build, so we have a portfolio of brands and unique content … We need to prepare to win what the future game looks like 10 and 20 years into the future … We’ve been really busy in the last year and we’ve actually incubated five companies inside there. These are the companies that have the potential to shape the future of retail. Ring-fenced from the rest of the organization, they’re able to move with speed. We hire a CEO, we give them capital and they run. This is not a sandbox or an R&D sandbox. Each start-up has a vision for how and what it wants to be, and how it’s going to change the future of the company.”

KC's View: These stories make clear why Walmart becomes a more dangerous competitor with every passing day, with the capacity to surprise and disrupt. The company still has some legacy issues with which to deal, and has to stay the course … but the course itself seems clear, with management having a firm sense of direction.

Sweet Uses For Customer Purchasing Data

Bloomberg reports on how Chinese e-commerce behemoth Alibaba is “vacuuming data up from the legions of people shopping, searching and sharing on its various platforms and providing it to companies eager to create products that will resonate with Chinese consumers.”

Case in point: Alibaba was able to learn through its customer purchasing data that the same people who bought chocolate bars also liked spicy snacks. Alibaba went to Mars Inc. with that information, which was then able to put into production a Spicy Snickers candy bar that has as one ingredient the Sichuan peppercorn. Normally, such a product development process could take up to three years, but Bloomberg points out that in this case it took less than one.

Another example: “Last month, Unilever launched the Purifi line, starting with a skin cleanser based on the purchasing decisions of tens of thousands of those young mothers. A bath gel, wipes and face masks will follow. The entire process of conception, design and testing took Unilever just 6 months with Alibaba’s help, down from the usual 18 months to two years for a new product.”

KC's View: This strikes me as being a really smart use of customer data - it doesn’t compromise specific shopper info, but provides the kinds of insights that can be turned into relevant innovation.

One of the people quoted in the story says that most innovation has a 90 percent failure rate, and that this kind of stuff can improve the odds. I agree … and think it sets the stage for greater kinds of collaborations between retailers and suppliers.

Report: Virtual Voice Assistants Get High Marks

MediaPost has a story about a new study by Magid saying that while “not everyone has a virtual voice assistant … those who do tend to be happy with them.”

According to the story, “Amazon Alexa and Google Assistant have the highest satisfaction levels among mobile users, each with an 85% satisfaction rating, followed by Siri and Bixby at 78% and Microsoft’s Cortana at 77%.” (Bixby is the Samsung product.)

MediaPost writes that “familiarity with smart speakers is high, with 94% being at least a little familiar with Amazon Echo and Alexa devices, 90% with Google Home and 66% with HomePod, the latest of the group to market.

“Smart speaker usage varies, with 31% of Amazon device owners using their speaker at least a few times a week, Google Home owners 25% and Apple HomePod 18%.”

KC's View: You can count me among the happy users … I have an Alexa system throughout the house, and I use it multiple times each day.

The MNB Walmart Watch

CNBC reports that “Walmart has entered into an agreement with SunPower that will see the renewable energy firm install solar power at two distribution centers and 19 stores in Illinois. A combination of rooftop and ground-mount systems will be installed, and are set to account for 23 megawatts of power.”

The installations will begin sometime next year.

The story notes that Walmart “has ambitious plans when it comes to sustainability. By 2025, it wants to power half of its operations with renewable energy. Looking at the bigger picture, the business wants to cut emissions in its global value chain by one billion metric tons by the year 2030.”

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From Samuel J. Associates...

"It’s a bad time to be in the business of selling groceries, and the headlines are as bleak as you’d expect: "The Retail Apocalypse Is Coming for Grocery Stores" ... "Grocery Retail ‘Bloodbath’ Is Here" ... Conversely, it is a great time — arguably the best time ever — to buy groceries."
- New York Magazine/Grub Street


At Samuel J.Associates, we have a response to this assessment:

Bull.

We think it is a great time to be selling groceries, whether you are a retailer or a supplier. That’s because a more educated and demanding consumer, no matter the demographic, will reward businesses that are innovative, disruptive, and in touch with what people need, even if they don’t know they need it.

And, we know this: Those businesses require, and are fueled by, great people.

People who don’t just get the job done, but who set the tone in an organization, establish cultural and business priorities, who build teams, and who are able to not just adapt to competitive realities, but see the future and thrive in it.

And yes, ignore dire warnings about a "retail apocalypse" and see opportunities.

At Samuel J. Associates, we have a winning record of connecting great talent and innovative businesses ... as well as innovative talent with great businesses. We exceed your expectations so that you can do the same thing for your customers.

No bull.

Click here to find out more.

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E-conomy Beat

• Apple’s streaming television service, designed to compete with those offered by Amazon and Netflix and being prepped by Walmart, will launch in the US during the first half of 2019, according to a story in the Verge.

It is unknown at this point whether it will be a standalone app, or will reside inside the existing Apple TV app.

The story notes that “for years, Apple has been trying to crack streaming like it did digital media and smartphone apps. But due to complex licensing deals and media conglomerates’ tight control on pricing and bundling, the iPhone maker has been less successful than competitors like Amazon and Netflix, both of which have built strong ecosystems mixing licensed content and original programming. And although Apple has sold its own set-top box since 2006, the device has largely remained a conduit for other companies’ media, and it lags behind Amazon and Roku hardware in market share. Apple appears ready to try and change that with the launch of its official streaming TV service, which will be free for iOS device owners and exist as the home interface of its Apple TV line.”

Apple has made a considerable investment in the project, making deals with people like Steven Spielberg and Oprah Winfrey, directors Damien Chazelle (La La Land) and M. Night Shyamalan (The Sixth Sense), writer-producer Ron Moore (“Star Trek: The Next Generation,” “Star Trek: Deep Space Nine,” “Battlestar Galactica”), as well as with the producers of “Sesame Street.” One high profile project is a series about a morning television show and will star Reese Witherspoon, Jennifer Aniston and Steve Carell.

KC's View: I have to say that I’m intrigued by some of the offerings that Apple is working on, and thrilled that as an Apple user I will have free access to its proprietary content.

While I am a big fan of companies creating such content - their own version of private label - I have to admit that I’ve been a little frustrated lately because I haven’t been able to watch “Condor,” the TV series based on the seventies thriller Three Days of the Condor and its source novel, “Six Days of the Condor.” (The title keeps getting shorter. The next iteration will be called “Con.” Or maybe “Dor.”) “Condor” apparently is only available via the AT&T Audience network, which I don’t have and cannot even figure out how to get, and hasn’t been distributed via any other service. I understand why, but as a consumer, its frustrating … though no more so than the growing glut of quality TV that seems to be available these days.

FastNewsBeat

Florida Today reports that Publix plans to build a concept store on State Road A1A alongside the Indialantic Center shopping plaza, across the highway from Sunrise Park, about half way between Daytona Beach and Jupiter, Florida, on the state’s east coast.

According to the story, the new store is specifically identified as a “prototype” or “concept” store that will be neither a traditional Publix store, nor one of its Greenwise formats.

Publix is not commenting on specifics. The store is expected to be opened by the end of 2019 or in early 2020.


• The Boston Globe reports that as part of its efforts to compete more effectively with Starbucks, Dunkin’ Brands is going beyond the simple removal of ‘Donuts’ from the name of its eponymous shops and now plans to “install new espresso machines in stores across the United States to improve the taste of its lattes and other espresso beverages.”

The company, the Globe writes, says it is investing $100 million into U.S. restaurant upgrades, “more than half of which is going into beverage equipment … it says the new machines should result in a stronger and more robust espresso flavor, particularly catered toward the tastes of ‘younger espresso drinkers’.”

According to the story, “The initiative also includes a new espresso recipe, extensive employee training, and new, distinct orange cups featuring an exclamation point for their hot espresso-based drinks. Dunkin’ says they’re hoping for the changes to be implemented at the ‘vast majority’ of their 9,200 U.S. stores by the holiday season.”


USA Today reports that Chick-fil-A “is currently testing macaroni and cheese at some of its restaurants and is considering whether to add it to more markets – and perhaps, nationally.”

At the moment, the test is being conducted at stores in Baltimore, Maryland; Greensboro, North Carolina; Houston and San Antonio, Texas; and Phoenix, Arizona.

The story notes that “many customers who have already tasted the menu item have taken to Twitter to offer testimonials with one customer from Maryland, saying, ‘y’all really got something with this’ and another customer calling the dish ‘legit’.”

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RIP

The Washington Post reports that Dorcas Reilly has passed away at age 92. She had been suffering from Alzheimer’s disease.

And why, you may ask, is this worth noting?

Well, as the Post writes, Reilly is the creator of green bean casserole, which has become a Thanksgiving staple since she developed it in response to a press query in 1955 while she was working as a supervisor at the Campbell’s Soup test kitchen in Camden, New Jersey.

Throughout her life, the story says, “Reilly, a culinary trail blazer during a time when women were often on the sidelines in corporate America, remained astonished at the success of a dish based on green beans and cream of mushroom soup, one referred to by Campbell’s as ‘the mother of all comfort foods’ … Campbell’s has estimated that 40 percent of its cream of mushroom soup sold in the U.S. goes toward making Reilly’s green bean casserole. And millions of Americans have adopted it as part of their Thanksgiving celebrations.”

Your Views: Anchors Away

In yesterday’s MNB, there were two mentions of Sears.

The first one had to do with its history, making shopping options available to African-Americans during “the injustices and humiliations of the Jim Crow era.”

The second was just an offhand remark made about a story focusing on how Target will offer free two-day shipping on online orders this holiday season, undercutting competitors including Amazon and Walmart. I joked:

Wait a month. Somebody may actually pay you to have something shipped to you in two days.

Probably Sears.


This prompted MNB reader Frank Fay to write:

Really??? After reading and becoming enlightened a bit about one way that Sear’s historically provided an avenue for African Americans to purchase goods in a safer manner, you deflate that story with the point that Sears may have to pay you to deliver an item?  Target To Offer Free Two-Day Shipping For Holidays.

C’mon, that was not necessary.  Sears became a dinosaur, but contributed to the lives of many Americans and also created jobs and livelihoods for many workers for many decades…have some compassion here, not for Eddie, but for my Dad (and for the many others) who once earned a paycheck from the mighty Sears, Roebuck and Company!


Was it a cheap shot? Sure. I’ll plead guilty.

But while Sears had a distinguished history, I’m not sure that this is enough to dissuade me from being critical about and making wisecracks about its more recent stewards.

Even more importantly, it points out the degree to which a company that was born by being disruptive and relevant allowed itself to devolve into being anything but.

I think that’s an important lesson, not to be forgotten.



I also got the following email from MNB reader Steve Hungsberg about a study predicting that online grocery sales will more than quadruple by 2023 “as online options become more available and consumers become more open to trying online shopping or using online options more frequently to purchase their groceries.”
  
In today’s issue, you wrote:

No doubt in my mind that this is a distinct possibility, especially as more companies get on board.  By the way, because I never miss an opportunity to beat a dead horse, note that the report gives Instacart equivalency with the names Kroger, Peapod and FreshDirect. This just reiterates the point I keep making - that Instacart is working to disintermediate retailers from their customers, to the point where it is dangerous.”
 
I agree that there’s a danger to the larger retailers for this disintermediation (at least until they develop/expand their own in-house options), but I would argue that Instacart is a literal life saver to the smaller retailers who simply do not have the capital to invest in the infrastructure required to keep pace with the big guys here. In my view, the mom-and-pop shops of the grocery world better get on board the Instacart or Shipt train before starting to lose their market share in droves as consumer shift more and more to available online grocery options.


I’ve always felt that Instacart (and its brethren) offers a legitimate short-term solution to e-challenged retailers. I just don’t think it is a sustainable long-term solution … and I would agree that smaller retailers are at greater risk in this scenario because they may not have the wherewithal to develop proprietary solutions.

But I fear that the lifeline you describe may have an anchor attached to it.



Finally … Michael Sansolo had a column this week about the Washington Post food writer who rarely cooks mostly because she hates food shopping in stores that she finds to be uninspiring and irrelevant.

This prompted an email from an MNB reader:

My suggestion to the young millennial lady who hates grocery shopping. Find the pet food aisle and go buy a box or a bag of Meow Mix. Go to the dairy aisle, buy some milk, pour it over some Meow Mix, and enjoy your sorry life about how much you dislike grocery shopping. Count your blessings that you can afford the luxury of eating in restaurants as opposed to the thousands of people who cannot enjoy the luxury you indulge yourself in.

I responded:

I actually think that’s a little harsh. It is fine to criticize the writer for being entitled and maybe a little spoiled, it actually misses the point that she - and Michael - were trying to make, that supermarket shopping has not changed as much as other retail channels, and is at risk at being disrupted out of business if it does not change. Sure, she has options, but she’s also not alone … and the industry ought to be grateful that she has the talent and the platform to say what needs to be said. Don’t shoot the messenger.

And now, an email from MNB reader Chuck Jolley:

The comment about Meow Mix is an agonizing statement about the mindset of so many retailers. They miss the fact that relevancy is much more important than than old school ‘heritage’ marketing. Better to attack new and possibly disruptive ideas than try to understand them. Such was the way of Sears, Ben Franklin, even the once dominant A&P.

Agreed.

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“RETAIL 2020: What’s The Future (WTF)?” - A New Presentation by Kevin Coupe

In this fast-paced, interactive and provocative presentation, MNB's Kevin Coupe challenges audiences to see the fast-evolving retail world through a radical new 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 pave the 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.

Constantly updated to reflect the hand crafted news stories covered and commented upon daily by MorningNewsBeat, and seasoned with an irreverent sense of humor and disdain for sacred cows honed over 30 years of writing and reporting about the best retailers and retail strategies, “RETAIL 2020/WTF” will get your meeting attendees not just thinking, but asking the serious questions about business and consumers that serious times demand.


Here’s what Joe Jurich, CTO of DUMAC Business Systems, has to say about a recent appearance:

”Kevin recently participated in and spoke at our Annual User Conference.  Our group consisted of independent retailers, wholesalers, and software vendors – a pretty broad group to challenge in a single talk.  While his energy, humor, and movie analogies kept the audience engaged, his ability to challenge them to think differently about how they go to market is what really captured them!  Based on dinner conversations afterward, he appeared to have left everyone thinking of at least one new approach to their strategy!”

Want to make your next event unique, engaging and entertaining? Contact Kevin at kc@morningnewsbeat.com , or call him now at 203-253-0291.

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From The MNB Sports Desk

At Fenway Park last night, in Game Two of the World Series, the Boston Red Sox defeated the Los Angeles Dodgers 4-2, taking a 2-0 game lead in the best-of-seven series. The World Series now moves to Los Angeles for Game Three on Friday night.

PWS 51