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Wednesday, February 06, 2019

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The Innovation Conversation: The Microsoft Edge



Content Guy's Note: The goal of "The Innovation Conversation" is to explore some facet of the fast-changing, technology-driven retail landscape and how it affects businesses and consumers. It is, we think, fertile territory ... and one that Tom Furphy - a former Amazon executive, the originator of Amazon Fresh, and currently CEO and Managing Director of Consumer Equity Partners (CEP), a venture capital and venture development firm in Seattle, WA, that works with many top retailers and manufacturers - is uniquely positioned to address.

This week, we talk about the impact that three deals that Microsoft has made with different retailers could have on the retail business.

And now, the Conversation continues…


KC: It was been interesting, and probably not at all coincidental, that three major retailers - Kroger, Albertsons and Walgreens - all have announced significant individual partnerships with Microsoft.

Tom Furphy:
It makes sense on a number of levels. Microsoft is one of the largest and historically most innovative tech companies. Their Azure cloud computing platform is a strong alternative to Amazon’s AWS, giving retailers an option versus working with a competitor. And, given their scale, they need to power entire industries to drive growth. They cover almost everything a retailer would need from software, to certain hardware, computing and storage, machine learning and AI. Working with large retailers will allow them to better tailor products to the business and help them build a robust roadmap forward.

KC: From my reading, the Kroger deal seems to be the most ambitious of the three, aimed at creating a store-of-the-future that will be better both for the consumer and the company, with, for example, smart shelves that will make more and better information to shoppers as well as making it easier for Kroger employees to pick products for online orders. There’s also a project in which the two partners are working to develop a Virtual Store Manager, which would alert the human store manager when, say, there aren’t enough shopping carts for customers at the front of the store. (I may be wrong about this, but it sounds like the Doctor hologram on ‘Star Trek: Voyager,” which actually would be pretty cool.)

TF:
The physical store experience is ripe for innovation. Although I would want to make sure they’re applying the technology thoughtfully and not just implementing tech for tech’s sake. If technology can lower costs, save time and improve shopper experience, then it is well founded. Retailers can apply the freed-up cost and additional shopper time to add to the richer, sensory elements of the experience. People only have so much shopping capacity. If we can take the mundane processes of shopping and automate them, we free up shopping capacity to be spent on discovering products, engaging with store employees and overall increasing the utility and emotion of the experience.

KC: Two comments from the companies struck me as fascinating, and I’d love to hear your thoughts. One from Kroger CEO Rodney McMullen, who said, “Together we can create something that, separately, we could not.” The other was from Microsoft CEO Satya Nadella, who said he hoped the Kroger experience would adds “inspire other grocery chains to adopt it in their own stores” … which pointed to the fact that while Kroger may be at the head of the line for this technology, it will not have an exclusive.

TF:
I think that is an important statement from Mr. McMullen. So often we see retailers that think they can do everything themselves. They feel that they are experts in their business and that no outsider can add value. They are guarded to open up with partners, often beating them back while holding on to their own technology roadmaps. That simply is not going to cut it going forward. Amazon invests billions of dollars annually on R&D. Retailers need to invest more heavily while also putting some of the investment burden on partners.

It would be pretty tough for Microsoft to give any retailer an exclusive. I think the tie-up gives Kroger first shot at the things they want to do and an early look at the things Microsoft is working on. As long as Kroger can be nimble in experimenting and implementation, they should be able to stay ahead of the curve, while allowing Microsoft to monetize the innovation across their customer base.

KC: The Walgreens deal was for something different - to design ‘digital health corners’ for its stores that will “promote the sale of health-related devices and help patients manage chronic diseases.” This intrigues me because health care seems to really be at the nexus of a lot of retail and technological innovation these days. I’m sure you’re seeing a lot of this in your VC business … companies looking for ways to disrupt the health care business.

TF:
In our first Innovation Conversation of the year, you asked me to predict where we would see the most disruption in the coming year. I answered with health care. The current system is too broken and too expensive to not disrupt. And retailers are the perfect disruptor. They have wide-scale customer/patient relationships, they are in every neighborhood, they handle prescriptions and sell products that support better health management and they have a knowledgeable staff and partners to deliver the content of medical advisement. Yes, in our business we are seeing lots of innovation in health care both on-Amazon and off. Amazon is going to really shake it up. But there is absolutely a window for other retailers, such as Walgreens in this case, to get out in front of Amazon here. But it’s a small window.

KC: And then Albertsons signed a deal that will apply Microsoft’s artificial-intelligence technology to its business and could lead to the development of checkout-free stores. It seems to me, from my reading of the press releases and a lot of the stories about these deals, that Albertsons actually was a lot more honest about why it was making these moves - Amazon’s aggression simply made them vulnerable and, as a result, more motivated to modernize its infrastructure and in-store experiences.”

I have two thoughts about this. One is that companies have to be ready do do a lot more than just modernize their in-store experiences … in this environment, they have to be willing to make large and fundamental changes to be positioned for the customer of the future. The other is that, as I wrote last week, among the things that Amazon is best at - maybe better than any other company - is reinvention and disruption from within. Amazon has known that as its business grew, competition would become more intense, not less so. What Albertsons - and everyone else - has to do is not aim for where Amazon is now, but where they’re going to be in five years. Which ain’t easy.

TF
The Albertson’s move with Microsoft is nice but will merely allow them to catch up with Amazon’s current capability as a best case. What are they doing to truly improve shoppers’ lives? Using Machine Learning and AI to make stores better is one thing, but are they really truly changing the shopping experience?

Machine Learning and AI are going to transform retail. Amazon has thousands of experts embedded across their teams. It’s engrained in everything they do. They innovate internally well before experiments hit the market. Jeff Bezos often says that Amazon is working on a quarter that is three years out. Imagine how far ahead they are with thousands of experts innovating out in 2022? Amazon’s lead is still expanding, not contracting.

For me, the Amazon DRS (Dash Replenishment Service) exhibit at CES was mind blowing. It showed the connected home creating demand signals all over the place, and Amazon receiving and fulfilling them. Goldman predicts Amazon will have $160 billion in packaged good sales by 2027. Over half will be driven by subscription, prediction and IoT. I also recently spent some time with the Amazon Key team. The strides they are making in bringing goods directly to your refrigerator, cupboard or pantry is amazing. What are other retailers doing in these areas?

The Conversation will continue…

Wednesday Eye-Opener: Laughs First


by Kevin Coupe

I mentioned yesterday how much I like Amazon’s Super Bowl commercial for its Alexa-powered system, which featured Harrison Ford … I said I liked the idea that it showed a sense of humor about the company’s products, which I found appealing.

But in reading more about the commercial’s development, I found that numerous commentators made a similar - and salient - point, that the commercial (which you can see at left) also reflects a core cultural paradigm at Amazon.

Things fail. Deal with it, and move on.

We all know that voice recognition technology is a work in progress - last year, less than one half of one percent of all e-commerce sales came through so-called smart speaker systems. But I don’t think there is much doubt that this is only going to grow.

But growth brings with it all sorts of failures, which are anathema to most companies, which seem them as a cost. Amazon seems to see them as a necessary investment … that’s the subtext of the commercial.

So yeah, it is funny. But it also teaches us an Eye-Opening lesson … about which Jeff Bezos may end up having the last laugh.


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From the National Grocers Association...

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Why Online Grocery Shopping Is All Upside

Barron’s has a story about how “online grocery sales are going to be the future of the supermarket,” even though it hasn’t caught fire - “even among tech-savvy millennials” - yet.

The story quotes Loop Capital’s Anthony Chukumba, who “took a look at the online grocery space Monday, writing that while sales are projected to reach $100 billion by 2020 and account for 12% of total food and grocery revenues in the U.S., tech-loving millennials haven’t fully embraced this option.”

At the same time, Fortune has a story about a new Bain & Co.-Google survey saying that “just 3% of grocery spending in the U.S. takes place online, compared to much higher levels of e-commerce penetration in areas such as footwear (20%) and consumer electronics (40%). Only 25% of those surveyed tried an online grocery service in the last year and just 6% have consistently ordered groceries monthly online.”

Consumers say that the slowness in this segment comes because “some shoppers are concerned about determining the best prices when shopping online, while others complain about items being out of stock or delivery drivers being late.” Plus, “while grocery delivery is intended to save time for consumers, only 42% of those surveyed said the service did so.”

However, despite the to-date performance issues, “Bain expects that groceries will be part of e-commerce growth, which in total is expected to at least triple in the next decade,” though “online grocery retailers will need to become even more convenient and incorporate features such as shopping lists and price comparison to convert consumers.”

In the Barron’s story, Chukumba argues that “millennials are a key group to watch … given that the cohort’s collective annual spending will reach $1.4 trillion by next year, reflecting 30% of all retail sales. At the moment, though, more than 80% of the millennials he surveyed reported never ordering groceries online, a sign that the returns on retailers’ investments in the area are low.”

KC's View: But that also means that there is an enormous upside, especially as millennials’ behavior in the grocery sector begins to catch up to their behavior in every other retail segment. It also is going to be driven by the increased competitiveness among a bunch of companies not named Amazon, as they improve their strategies and tactics.

Improved technology and expanded adoption will only give the trend greater momentum. As we see companies focus on things like automatic replenishment at the consumer level and the Internet of Things, as well as improving their delivery of services like BOPIS (Buy Online, Pickup In Store) in addition to sharpening and embracing the delivery component … I think all these things will dovetail with consumer priorities and experience in other segments, and add up to nothing but upside.

Study: As E-Commerce Grows, It Is Seen As Value Proposition

IRI is out with its Consumer Connect survey, saying that “e-commerce sales for the latest 52 weeks ending Dec. 30, 2018, were $58.9 billion, a 35.4 percent increase from a year ago. These sales account for only 11 percent of total CPG retail sales; however, e-commerce accounts for 64 percent of total omnichannel growth.”

The report goes on:

“Millennials and Gen Xers, the two generations most likely to find value in shopping online, are also the generations that report having the most difficulty affording needed groceries (34 percent of millennials, 36 percent of Gen Xers). More than half — 54 percent — of millennials and Gen Xers report they are less likely to make impulse purchases when buying online. With this in mind, e-commerce should be touted as a tool for helping shoppers stick to their budget. Overall, 50 percent of total respondents report they are less likely to make impulse purchases online, including 49 percent of boomers and 44 percent of seniors.

“It’s no surprise that 38 percent of all consumers like ordering online and picking up in the store, because it is convenient and is a good way to avoid shipping fees. In fact, 49 percent of millennials, 48 percent of Gen Xers, 38 percent of boomers and 24 percent of seniors feel the same.”

Specifically, the report says, “Q4 Consumer Connect survey respondents say buying online allows them to find lower-priced beauty and personal care product options — 29 percent of total U.S. consumers, 45 percent of millennials, 35 percent of Gen Xers, 27 percent of boomers and 14 percent of seniors. These results closely mirror thought on home care products, with 30 percent of total consumers, 43 percent of millennials, 36 percent of Gen Xers, 27 percent of boomers and 19 percent of seniors saying they find lower-priced options online.”

The survey also says that nearly 55 percent of surveyed consumers “report their households were in good financial shape in Q4 2018, up 4 percent from Q3 2018 and 2 percent from Q4 2017.”

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Amazon’s Disruptive Influences Veer Away From Retail

Bloomberg has a story about how it appears that Amazon’s focus moving into the future is “the turf of other tech companies,” and not the turf of traditional retailers.

It makes sense, Bloomberg writes, “that when Amazon thinks about where to allocate its dollars to grow, it would focus more on its under-penetrated, higher-margin digital-services business lines rather than its more-mature, lower-margin e-commerce operations.”

The story suggests that “perhaps Amazon’s dominance of all e-commerce and physical retail isn’t as inevitable as some think, and there comes a point where shipping low-cost goods isn’t economical, particularly for middle-class consumers for whom price can matter more than convenience. Barring big acquisitions like Whole Foods, maybe the competitive position of Walmart, grocery stores, and 21st-century shopping malls and mixed-use developments is pretty good.

“On the other hand, it’s tech companies that have to watch their backs when it comes to Amazon. If Amazon grows its advertising business from $10 billion to $50 billion over the next several years, it’s likely that some of that growth will come at the expense of the current digital advertising duopoly of Google and Facebook. And the continued rapid growth of Amazon Web Services is probably bad news for other large companies in the enterprise technology market.

“This may turn out to be a welcome development for Main Street, USA, which may no longer bear the brunt of job losses as Amazon shifts its growth focus elsewhere. But for tech companies and local economies in the San Francisco Bay Area, the Amazon disruption may be just beginning.”

KC's View: I think it would be an enormous mistake for retailers to ever think that Amazon ever is going to step away from retail in any sort of meaningful way. Its business model may evolve, moving toward a greater focus on its Marketplace, but that day-to-day retail connection to consumers is a critical part of Amazon’s ecosystem.

But Amazon is capable of walking and chewing gum at the same time … while simultaneously doing complicated mathematical computations, calculating space flight investments, making journalism profitable, and doing about a thousand other things. Including, as it happens, investing in the film business - Amazon went to the Sundance Film Festival and spent an unprecedented $45 million to acquire distribution rights for a number of films that it obviously hopes will continue to drive people to become Prime members.

Amazon has lots of dollars and isn’t afraid to use them.

Inside H-E-B’s Joe V’s Strategic Positioning

The Houston Chronicle has a story about H-E-B’s Joe V’s Smart Shop chain of nine stores, which was designed to “serve low-income people who struggled to find affordable, fresh and healthy food.

Roxanne Orsak, who runs the division, says, “I grew up like our customers … we had no money. I wore my brother’s hand-me-down clothes until the eighth grade. I have a passion for studying what’s important to them. Food is an important part of their social lives and the moms who shop here take great pride in providing for her family and finding the best deals. Planning a great dinner is her value.”

According to the story, “These customers need low prices, but they also expect fresh, quality ingredients. The trick, Orsak said, was to squeeze costs out of the store, not offer second-rate items.

Orsak starts with a metal building, not fancy architecture. There is no pharmacy, seafood service counter, massive bakery or butcher service. Space at the front of the store is rented out to banks and other vendors to share real estate costs. A grocer can also reduce costs by narrowing the selection. A typical H-E-B sells 37,000 to 40,000 items in 100,000 square feet or more. Her new store would sell only 6,500 items in 55,000 square feet. Instead of offering 1,200 produce items, she’d offer the 250 fruits and vegetables her customer really wants, saving on labor and spoilage.

“To lower labor costs, she stocks the store with pallets to minimize hand-stacking. Customers bag their own groceries. There are no store coupons because Orsak spreads the savings year-round.”

The pricing rule is firm - Joe V’s stores are expected to have prices that are 15 percent lower than the competition’s, and “if the wholesale cost rises, Orsak expects store managers to reduce costs, not raise prices.”

KC's View: All of which explains why H-E-B, which also operates Central Market, one of the best formats in the country, is a company that continues to thrive even in tough competitive markets.

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From The Organic Produce Summit...

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Target Expands New Loyalty Program Test

CNBC reports that Target is expanding the test of a new loyalty program to five new markets - Charlotte, North Carolina; Denver, Indianapolis, Kansas City and Phoenix - after almost a year’s pilot in Dallas.

The story notes that “the program is free to members and doesn’t require a Target credit card to sign up. It offers perks like 1 percent back on all Target purchases to redeem later on, and will give out rewards on customers’ birthdays — something Target hasn’t tried before but brands like Starbucks and Panera Bread have. The rewards will be customized based on shopping behavior, with Target determining if the recipient would be more likely to want clothes, a DVD or maybe more groceries … The loyalty program also lets shoppers choose which local nonprofits Target should donate toward.”

CNBC writes that “other perks of Target’s new program, called Target Circle, include free next-day delivery via its Restock service, where customers can place up to 45 pounds of everyday essentials like paper towels or shampoo in a box, and 50 percent off a one-year membership to Target’s same-day delivery service Shipt.”

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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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Lunar New Year Brings Eclipse In Maine Lobster Sales

In Maine, the Press Herald reports on how “lobster dealers are struggling to manage the fallout from the U.S.-China trade war. Before the tariff, China was the second biggest importer of U.S. lobster, buying $128.5 million worth of it in 2017. The U.S. was on track to double its lobster sales to China before the tariff initiated by President Trump hit in July, according to trade data. Since then, U.S. lobster exports have all but dried up.”

The story goes on to point out that “at no time is the loss of the China market felt more keenly than at Lunar New Year, when China’s appetite for U.S. lobster had been strongest. Lobster is often served on Lunar New Year’s Eve, when families make elaborate feasts full of food that represents what they seek in the coming year, such as wealth and good fortune.

“In 2018, China imported $23.5 million of U.S. lobster in February — more than at any other time of the year, and more than most countries buy in a calendar year. Stephanie Nadeau, a live lobster dealer from Arundel who used to sell $100,000 of lobster a day to China, has not sold a single holiday lobster to China this year.”

One approach to dealing with the Chinese trade war - build business in other Asian markets, such as Hong Kong, Korea and Vietnam.

KC's View: Yikes. Have to feel sorry for these businesses having their legs cut out from under them. The question is whether this is short-term pain, or a new normal … and I’m not sure anybody has the answer to that one, or whether the pain will be worth it.

Worth Reading: What John Wanamaker’s Can Teach Us

Smithsonian has a piece focusing on a new book, “Wanamaker’s Temple: The Business of Religion in an Iconic Department Store,” by Nicole C. Kirk, which “delves into how John Wanamaker’s religious and political beliefs shaped his retail empire, which at its peak included 16 stores around the mid-Atlantic region. At a point in time where retail and politics seem inexorably connected, the saga of Wanamaker offers numerous parallels to the ways we think about shopping today.”

An excerpt:

“Kirk’s book describes Wanamaker’s 1871 visit to London, where he took in London’s Annual International Exhibition, which brought together art, commerce and technology. It was there, she notes, that he got the idea to expand the boundaries of what was possible for an American retailer to accomplish.

“The business world had become too dishonest, too greedy and too eager to prey on the consumer, thought Wanamaker. Haggling over prices was a part of the practice, as was being suspicious of any customer just browsing the wares, rather than immediately making a purchase. Wanamaker was moved by his religion to change all that by infusing his establishment with what he saw as more moral, and therefore Christian, business practices. As a young man, he found religion when he heard singing coming from a First Independent Presbyterian Church and unwittingly arrived in the midst of a prayer meeting. At the church, he listened to a speech about morality, faith and business and became even more devoted to his religion, which he saw as working in tandem with his business acumen.”

You can read the entire story here.

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From City of Hope...


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From FMI...

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NGA Announces Creative Choice Award Winners

The National Grocers Association (NGA) has announced this year’s winners in its Creative Choice Awards contest, sponsored by Kellogg’s and Unilever, culled from more than 500 entries submitted from supermarket operators throughout the country. Entries were judged on the criteria of creativity and effectiveness by a panel of thirty industry experts (including MNB’s own Michael Sansolo).

The full list of 2019 Creative Choice category winners include:

Marketing…

Category 1: Connections Through Social Media and Digital Marketing

- 1-15 Store Winner: NuNu’s Cauliflower Boudin, NuNu’s Markets
- 15+ Store Winner: $100,000 Treasure Hunt, K-VA-T Food Stores

Category 2: Connections Through TV Radio
- 1-15 Store Winner: Cecil K’s First Annual Christmas Tree Decorating Contest, Cecil K’s Hometown Market
- 15+ Store Winner: Coborn’s Delivers TV Spot, Coborn’s Inc.

Category 3: Connections Through Print
- 1-15 Store Winner: Fresh Grocer Local Vendor Sale, Burns Family Neighborhood Market
- 15+ Store Winner: ShopRite Celebrates Chinese New Year, ShopRite

Category 4: Integrated Marketing Campaign
- 1-15 Store Winner: App Launch, Macey’s
- 15+ Store Winner: Festival Foods Fresh is Art Integrated Marketing Campaign, Skogen’s Festival Foods

Category 5: Grand Opening or Remodel
- 1-15 Store Winner:  Doc’s Country Mart Grand Re-Opening, Doc’s Food Stores
- 15+ Store Winner: PriceRite Innovation Stores, PriceRite/Wakefern

Merchandising

Category 6: Single Manufacturer Event

- 1-15 Store Winner: Nutrition Smart and Ancient Nutrition Presents: Dr. Josh Axe & Jordan Rubin, Nutrition Smart
- 15+ Store Winner: Roche Bros. Launches One Mighty Mill into Retail, Roche Bros. Supermarkets

Category 7: Store Event
- 1-15 Store Winner:  Prime Rib Dinner for 2!, T.A. Solberg, Inc.
- 15+ Store Winner: SHOP ‘N SAVE FY’19 Free Turkey Promotion, SHOP ‘n Save

Category 8: Public Service or Charitable Cause Event
- 1-15 Store Winner:  Pets Need Food Too, Walla Walla’s Harvest Foods
- 15+ Store Winner: Food for A Cause Campaign, Coborn’s Inc.

Category 9: Center Store/GM/HBC
- 1-15 Store Winner:  DLM Savings on the 7th Anniversary Sale, Dorothy Lane Market
- 15+ Store Winner: ShopRite Celebrates Chinese New Year, ShopRite

Category 10: Perimeter Departments
- 1-15 Store Winner: Turkey Red Wheat: Our Field of Dreams, Dorothy Lane Market
- 15+ Store Winner: Chicken Shack, Coborn’s Inc.

The overall winners will be announced at The NGA Show on Tuesday, February 26 at the Super Breakfast Session … hosted by our own Michael Sansolo.

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FastNewsBeat

…with brief, occasional, italicized and sometimes gratuitous commentary…

Reuters reports that private equity group Ares Management Corp. is exploring options for its Smart & Final Stores business, including a possible sale of the company.

According to the story, “An outright sale would allow Ares to cash out on its majority stake in Smart & Final. It acquired the company in 2012 from fellow buyout firm Apollo Global Management LLC for $975 million, including debt … Smart & Final, based in Commerce, California, is working with investment banks on a sale process, and has reached out to private equity firms that could be potential acquirers.” However, a sale of the chain is said to be by no means certain.


CNBC reports that Ikea is getting into a new business - it will “start leasing furniture as it moves to develop ‘scalable subscription services’ to prolong the life of its products … Customers will be able to return their furniture at the end of the leasing period and, if they want to, pick something new.”

The first test of the leasing business is scheduled to take place in Switzerland later this month.

The move comes as Ikea “is opening smaller stores in downtown areas and working to improve customers’ delivery and online sales experiences. Ikea plans to open its first smaller, ‘city center’ store in Manhattan this spring.”

Executive Suite

…with brief, occasional, italicized and sometimes gratuitous commentary…

9to5 Mac reports that Angela Ahrendts, who five years ago left her job leading Burberry and went to Apple to become senior vice president of Retail, leading a “dramatic redesign of the company’s retail stores,” will step down in April for “new personal and professional pursuits.” She will be succeeded by Deirdre O’Brien, the company’s VP of People, who will become SVP of Retail + People.

In its coverage, the Wall Street Journal writes that “Ms. Ahrendts presided over a sizable retail expansion that punctuated the company’s luxury-brand appeal and, more recently, close observers say she was a capable caretaker of Apple’s successful retail strategy but that little changed radically under her tenure.” The story also points out that Ahrendts pushed for “an expansion of Apple’s retail business that increasingly thrust Apple stores into prestigious locations in the world’s fashion capitals, including the Champs-Élysées in Paris and Piazza del Liberty in Milan. Ms. Ahrendts pushed for flagship stores in Seoul, Thailand and other locales outside North American and European markets. She also championed the idea of refashioning Apple stores as ‘town squares,’ gathering places in local communities where people could work with Apple’s staff to learn how to better use their iPhones, iPads, Macs and other products.”

Perhaps it is inevitable in any chain, but for my money - and I am an enormous Apple fan and user - the Apple Stores can be just as inconsistent now as they were when Ahrendts started. There tend to be too many employees talking to each other, and one can wait way too long to get help. But, when you get someone great, especially at the Genius Bar, it can be as good an experience as in any retailer. Often better. But I think that they’ve spent a little too much time and money trying to be upscale and too little time being deeply relevant. Just sayin’…


• North Carolina-based organic grocery chain Earth Fare has named Dr. Angela Hind to be its new Chief Medical Officer, charged with working “across all departments to enact and oversee a corporate health and wellness strategy that informs our guiding principles of new product selection and merchandising to ensure we only provide the healthiest assortment for the communities we serve.”

The announcement notes that “Hind practiced Internal Medicine for nearly 20 years. After witnessing the growing number of chronic illnesses in patients, Hind sought additional training in molecular toxicology and Functional Medicine as a way to create an integrative approach to prevent and treat disease through diet, toxin avoidance, and stress reduction.”

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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. See a sample at left…




Here’s what Lori Stillman, Executive Vice President - Analytics, Insights and Intelligence, Advantage Solutions, has to say about a recent appearance:

"Kevin joined us as a moderator and facilitator for a two-day client executive event we hosted. His role in the success of the event went far beyond his time presenting and sharing his great wisdom and content. From the moment our planning process began and we selected Kevin as a key part of our program, he dove in and worked with our team to review session topics, ideate on programming and help ensure our overall event delivered on the goals we had established. His quick wit, deep industry knowledge and ability to synthesize conversations into key take-aways enabled us to hit a home run!”

And, from Joe Jurich, CTO of DUMAC Business Systems:

”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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Your Views: Value Propositions

We had a story the other day about disruptive changes in the hotel business, from which we drew business lessons for retailers. It prompted one MNB reader to write:

What if more hotels offered actual in-room coffee makers and not crappy coffee, Kuerigs pods, or none at all - forcing you to buy room service? What if there was an actual room fridge that fit more than overpriced mini bar beers?

What if more hotel, even chains, were more unique and reflected the community, and offered unique dining options that were out of the ordinary? What if room service didn’t incur a ridiculous surcharge?

I seldom stay at hotels anymore unless it’s just for a night or two as a quick getaway or on the way to somewhere else. And even then we look for small, quirky boutique hotels or inns. (and I’m no Millennial - LOL) I want a place with a kitchen or kitchenette so I can make my own coffee and buy delicious foods from the area to enjoy for breakfast, at a minimum - sometimes dinner too. I want a place to spread out and lounge, away from crowds. Most hotels, even upgraded suites, don’t offer much in the way of in-room coffee or comfortable lounging areas. Plus, it’s hard to beat the price of VRBO and Air BnB even for luxury stays. I can travel with friends, stay in a neighborhood, and have a unique experience far below what it would cost for even a middle-of-the-road hotel - but even if it cost more or the same, it would be worth it.




Regarding some of the new problems being encountered by Instacart, MNB reader Tracy Lape
wrote:

The Instacart situation brings to mind the third party installation/delivery for big box stores like Home Depot, Lowes, carpet companies, etc.  They are the last phase of the consumer purchase and can enhance or ruin the customer experience. And they don’t even “work for the company” that the product was purchased from.  My experience is that the last phase is typically NOT enhanced.  In an effort to save money, the companies put their reputation on the line and hope for the best.  Down the road the companies that will come out ahead will need to find a way to motivate the “third party” to represent them well.  Or someone needs to develop a third party company that excels in customer service and sells that service to multiple companies.  Higher pay for better customer satisfaction?

MNB reader Karen Shunk chimed in:

I saw your item on Instacart employees taking to social media, and I wholeheartedly agree with your comment regarding the risks to retailers who may end up being tarred by the brush of a labor dispute they are only peripherally involved in.
 
I shop for groceries in a store that is a hub for Instacart activity. I have been concerned about this for two reasons: one is that having what amounts to a lot of warehouse pickers in the store degrades my experience as a shopper. (Anyone who has been in a grocery DC knows to stay out of the way of a determined picker.) Second, the Instacart employees *always* seem to be under the gun, so they must be under a lot of pressure from the company to fill orders. It just doesn’t seem like a great gig, so I am not surprised many of the employees feel as though they are treated poorly.
 
If retailers wish to do online order fulfillment from stores (the new holy grail), it shouldn’t diminish the experience of people who actually come into the stores, and they should strive to do business with partners who treat their employees well.




One MNB reader had some observations about Amazon Go:

OK, I admit it . . . I’m an old guy and I don’t buy into a lot of “current forces” going on around me culturally/societally. I see them, but I just choose NOT to participate. Case in point . . . Smart Phones. Yes, I have one. And the only reason it gets updated is when I change carriers/plans. And I consciously try NOT to use it because it’s an invasion into how I have lived my 71 years. I resent it, actually. I’m only saying this because I want to comment about the new AmazonGo location at the Ogilvy Transportation Center in Chicago.

How could I not notice? They carved out a space where a Bath and Beyond and a GNC once stood, and built their store. I walk past it every morning. It’s in the path of a stream of anywhere from 500 to 900 commuters advancing and narrowing specifically towards a pedestrian bridge over Canal Street heading into the Loop. I know, it’s a daunting challenge to walk in the opposite direction, as I do. So there it is, right in their path.

I rarely see anyone in it. I admit, I don’t stop and analyze it’s functioning. But it truly puzzles me. Could it be because it doesn’t have a checkout that people just move in like “Stealth Shoppers,” grab their stuff and split? Kind of like shoplifters . . . But honestly, with all the hubbub . . . wouldn’t there be more activity? I mean, I’ve never seen more shoppers than there are helpful staff standing around. I was anticipating at least a small crowd of people looking over merchandise. But nothin’! I just see rows and rows of stuff . . . and those employees, whatever they’re called, Retail Assistants, Clerks, maybe even Security . . . because it all happens so fast I don’t even see what goes down.

Or is that the object? In and Out. (Maybe that should have been the name, except it’s already taken). I see their orange posters all over for “Sign Up for the Amazon App!” So what’s the message? “I dare ya’?”

Finally, a word from our sponsor...

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A Freshly Crafted ‘Retail Tomorrow’ Podcast

Some call it BOPIS (Buy Online, Pickup In Store). Some call it click-and-collect. No matter what you call it, this segment of e-commerce, while it presents challenges, also is an enormous opportunity for retailers that want their bricks-and-mortar stores to remain relevant, and who want to satisfy an established consumer need. (And when you put two things together, it can do magic, believe it or not.)

In this special Retail Tomorrow podcast, recorded at Google’s New York City offices during the recent National Retail Federation (NRF) Show, we convene a panel of experts from a wide range of fields to open our eyes to the possibilities.

This Retail Tomorrow podcast is sponsored by the Global Market Development Center (GMDC).

Pictured below are our panel members, from left:

• The Content Guy.
• Lee Peterson, EVP of Thought Leadership at WD Partners.
• Ben Conwell, Senior Managing Director & National Practice Leader of the E-commerce Fulfillment Group at Cushman Wakefield.
• Jeff Baskin, EVP, Global Partnerships at Radius Networks.
• Dror Cohen, Chief Of Staff of Waze Ads at Waze.
• Chris Lydle, Retail innovation Lead for Google.

Enjoy!



PWS 52