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Friday, March 01, 2019

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Friday Eye-Opener: Chickening Out

by Kevin Coupe

We got a vivid illustration yesterday about how important food safety education is, in a story that also reminded New York Mets fans, who tend to be depressives, of how early the baseball season can end.

Brandon Nimmo, an outfielder for the Mets, is at spring training in Florida, and his family is back home. Nimmo decided to make himself a chicken breast dinner, and Yahoo Finance writes that “he was so proud of his skills in the kitchen that he took a photo of his meal and sent it to his wife.”

All good … until about 1 a.m., when he started to vomit. And vomit. And vomit some more. He missed an entire day of spring training, and lost “about four pounds off his 6'3" frame as a result.”

Nimmo told reporters that it was “chicken and sweet potato with a garlic herb thing over the top, and I cooked it in olive oil with aluminum foil, 400 degrees at 20 minutes … apparently that wasn’t good enough.”

Apparently not.

Nimmo joked that he might have to buy a meat thermometer. He could also, as the story points out, just cut open the chicken breast before eating it.

The first Eye-Opening lesson may be that retailers have to do a better job of providing food safety information to consumers. Nimmo seems to be cheerfully (now) accepting responsibility for undercooking the chicken, but a lot of shoppers will blame the store, even if that is unfair. You can’t compensate for every person who is ignorant about basic food safety procedures, but this story illustrates that some smart labeling in the right place might be able to make a difference.

The second lesson - and the one that fellow Mets fan Michael Sansolo and I took for this incident, is that it always is something. We’re only surprised that Nimmo didn’t have the whole team for dinner that night, and poisoned everybody.

Because that’s how things work for our New York Mets.

How A.I. Changing The Supermarket Shopping Experience

The Wall Street Journal has a piece this morning about how “A.I. is turning in-store experiences into equally seamless transactions - no lines or registers, no ‘chip malfunction,’ no wait.”

It goes beyond the checkout-free Amazon Go stores, which are the most celebrated examples of how technology can reshape the shopping experience.

Other examples:

“At less intelligent stores, you might soon be able to grab a cart that lets you checkout and bag items without a wait. That’s the promise of Caper, a smart shopping cart with a barcode scanner and card swiper built in, as well as mounted cameras that use image recognition and a weight sensor in the basket. The goal: to help Caper’s A.I. learn to be scanner-free.”

“Some supermarkets have introduced bionic assistants onto their floors. Tally, the Simbe Robotics-powered bot that recently started roving around Schnuck’s stores in St. Louis, uses computer vision to autonomously inventory shelves and keep popular items like my vanilla creamer stocked. Fellow bot Marty, who alerts humans to spills and other hazards, is making its debut at more than 150 U.S. markets this year.”

KC's View: These technologies will illustrate the difference between ambitious and progressive retailers, and those that are complacent about their competitive situation. Not that the use of technology will determine who is best and has the most sustainable business model … but what will determine it will be retailers’ willingness and ability to deal with its existence. Maybe you don’t have AI … but you’d better compensate for that with outstanding HI.

Editorial continues after a word from our sponsor...

Industry Drumbeat

From FMI...

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Study: Dollar Store Fresh Produce As Good As Supermarkets’

Researchers from the University of Nevada Las Vegas (UNLV)is out with a study saying that “the quality of fruits and vegetables at dollar stores is just as good as regular grocery store produce.”

According to the study, “The findings are especially good news for the 17.3 million people nationwide who live in low-income areas more than one mile from grocery stores — areas referred to as food deserts by the U.S. Department of Agriculture. Dollar discount stores may exist in these areas and be an alternative for residents who currently access fast food or sugary and savory nutrient-deficient snacks found at gas stations which can lead to obesity or other health problems.”

The research study says that “UNLV’s study compared the color, cleanliness, freshness, and firmness of fruits and vegetables in 14 dollar-discount stores to 40 traditional food outlets across the Las Vegas metro area.

“While there was slightly less variety of produce at dollar stores (for example, none of the dollar stores carried pears), there was no significant difference in quality … Eighty-four percent of produce and 89.5 percent of non-produce items were significantly less expensive at dollar stores. The only items that were more expensive at the dollar stores were whole wheat and white bread.”

KC's View: If I were a dollar store, I’d make this study a centerpiece of my marketing efforts. I’m not sure that what the study describes is a national phenomenon - I’ve generally found that the farther west you go, the better the produce tends to be (though I’m sure I’ll get some blowback on that one) - but I’d take these results and run with them.

Editorial continues after a word from our sponsor...

Industry Drumbeat

From WAFC...

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CEO: Whole Foods Has New Formats On Drawing Board

A month before Amazon-owned Whole Foods opens its 500th store in Atlanta, company co-founder and CEO John Mackey tells the Austin American-Statesman that there are new formats in the company’s future. However, Mackey did not provide any details; Whole Foods is currently converting its 12 “365 by Whole Foods” stores to the company’s regular banner.

In the interview, Mackey says that the “marriage” between Amazon and Whole Foods has been a positive one.

“Amazon has integrated its Prime rewards program at Whole Foods stores, which has also created an avenue for grocery delivery and pickup options,” the story says. “It’s also helped streamline Whole Foods operations and tried to lower prices, although price checks by the American-Statesman and other research entities on Whole Foods products have shown only a marginal decrease in costs.

“During the past year and a half, Whole Foods has also centralized its buying procedures with suppliers, which has made its operations more simple but also made getting products onto shelves harder for some startup food companies. ‘We’re changing because we want to change,’ Mackey said. ‘Amazon does not want to destroy our culture’.”

KC's View: It is interesting that Mackey sort of adopts a “fake news” attitude in the interview, saying that “everything Amazon gets blamed for are lies, and pretty much everything they get credit for is also not true … Whole Foods is pretty much calling all of the shots for Whole Foods.”

He doth protest too much, methinks.

Look, unlike some folks, I haven’t see a huge falloff in terms of Whole Foods service and availability … the store within walking distance of my house, where I shop a couple of times a week, seems to be working pretty well.

But let’s not forget that one of the reasons that Whole Foods was bought by Amazon is that things weren’t going so well, and it was vulnerable. Amazon is a simpatico owner, but it also likely is imposing some disciplines that did not exist before.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

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.

Now back to regularly scheduled editorial...

Tesla Detours From Bricks-and-Mortar Sales Model

Someone once told me that in this time when so many of America’s malls are facing potential obsolescence, you can tell the ones that are likely to have sustained success - they have an Apple Store, a Starbucks, and a Tesla dealership.

I think the observation was less about the fact that such malls clearly have a clientele with plenty of disposable income, and more about these shopping centers have invested in creating experiences that differentiate them and attract shoppers. (The disposable income helps, I’m sure.)

Well, now there may be one less metric, as Tesla has announced that it is going to shift all of its sales online, a move that the Wall Street Journal reports is “an extraordinary step aimed at cutting costs so the company can offer its Model 3 compact at a long-awaited starting price of $35,000.”

Tesla will close an unspecified number of its more than 300 stores, but the ones that remain open will just be places for people to look at the vehicles, not actually buy one; if you want a Tesla, you have to buy it on the internet.

KC's View: It isn’t the first time that Tesla has challenged conventional sales methods. Unlike virtually every other car company in America, which depends on third party networks of dealerships, Tesla always has owned its own showrooms; traditional dealerships, rather than accepting the competitive challenge and working to improve their experience and service, often have gone to courts and legislatures to stop Tesla from operating this way. (Tesla seems to have won most of these battles, but their very existence is a vivid reminder of how traditional ought not approach competition.)

Of course, Tesla seems to be making this move as a defensive play - high costs, high prices and its cofounder’s public antics all have created questions about the sustainability of the company’s business model. This doesn’t seem to be Tesla challenging automobile sales orthodoxy because it can, but rather because at this particular moment, it must.

And yet … that doesn’t change the fact that one of the accepted benchmarks for a mall’s viability may be going away.

Editorial continues after a word from our sponsor...

Corporate Drumbeat

From The Organic Produce Summit...


Now back to regularly scheduled editorial...

New York Officials Ask Amazon For A Second HQ2 Chance

The Wall Street Journal reports that New York Gov. Andrew Cuomo “has been in contact with Amazon.com Inc. executives, urging them to rethink their decision to abandon plans for a headquarters campus in Queens … A person familiar with the matter said Mr. Cuomo spoke with Amazon Chief Executive Jeff Bezos after the company abruptly told state officials it was scuttling the new development on Feb. 14.”

“I’ve had many conversations with Amazon. I hope that they reconsider,” Cuomo told the Journal.

However, he also says there is no sign that they will.

According to the story, “The overture shows the lasting reverberations of Amazon’s reversal of its plan to come to New York. Mr. Cuomo and Mayor Bill de Blasio offered up to $3 billion of state and city incentives to bring it to the Long Island City neighborhood. In return, Amazon promised to invest $2.5 billion and create 25,000 jobs.”

KC's View: Good luck.

This whole omnishambles has only served to highlight the chasm between Cuomo and the Mayor of New York City, Bill di Blasio - both Democrats, but di Blasio has blamed Amazon while Cuomo has blamed city politicians.

It sounds like Amazon is rethinking a number of its real estate strategies, including in Seattle. I’m not sure that investing a lot of time and money in the quagmire of New York politics is a smart idea.

E-conomy Beat

• Amazon announced yesterday that it is bringing what it calls “a new level of delivery convenience and predictability to Prime members with the launch of Amazon Day, available today to all Prime members in the U.S. This new delivery innovation enables Prime members to choose a day of the week to be their delivery day, which makes it easier to get purchases grouped and delivered together and, in many cases, in fewer packages. Members can also choose from Prime’s fast, free shipping options for any item they don’t want to include as part of their Amazon Day shipment.”

Amazon described the program as “one of many sustainability initiatives to help achieve Shipment Zero, the company’s vision to make all Amazon shipments net zero carbon, with 50% of all shipments net zero by 2030.”

Editorial continues after a word from our sponsor...

Corporate Drumbeat

From Webstop...

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The MNB Walmart Watch

• Greg Foran, president and CEO of Walmart U.S., reportedly has sent an email to store managers outlining changes inn the stores’ greeter position, and how they should take “specific steps to support" disabled employees affected by the change.

Walmart has been hit with a lot of negative public relations since it was reported that it was turning greeters into “customer hosts” with greater physical responsibilities that could rule out a number of disabled employees who have worked as greeters. Customers have taken to social media excoriating Walmart for its new policy.

"As can sometimes happen, this change has created some conversation both externally and internally, specifically where associates with disabilities are concerned," Foran wrote, saying that the company has "extended the current 60-day transition period while we explore the circumstances and potential accommodations that will make sense for each person."


• Walmart has announced a partnership with Affirm, described as a “financial technology company that provides transparent and consumer-friendly payment alternatives to cash and traditional credit,” giving its shoppers “the option of using Affirm to pay for their purchases over time at nearly 4,000 Supercenters nationwide.”

Once approved, the companies say, “shoppers select a repayment term of 3, 6, or 12 monthly installments and are shown the exact repayment amount they’ll owe each month, with interest displayed in simple dollars rather than as a hard-to-calculate interest rate. There are no hidden or late fees, so users will never pay a dollar more than they agree to.”

FastNewsBeat

USA Today reports that “JC Penney plans to close 15 additional full-line stores and nine home-and-furniture locations as the retailer struggles to get its footing amid significant challenges for department stores.” The stores - which so far have not been identified - are said to either be underperforming or representative of “a real estate monetization opportunity.”

The story says that “JC Penney had been reviewing its locations for potential closures as it seeks to cut costs amid a downturn in sales. The retailer had 864 department stores as of Nov. 3, according to a public filing. The latest move comes after the company had already announced three full-line store closures in January, bringing the total closures for 2019 to 27.”


• In Minnesota, the Star Tribune reports that Best Buy had “a robust holiday season … yet another indication that even in a time when Amazon has threatened to dominate the consumer electronics business, Best Buy has figured out an online and instore business model that seems to be competitive.

Editorial continues after a word from our sponsor...

Industry Drumbeat

From City of Hope...


Now back to regularly scheduled editorial...

Executive Suite

• CVS Health has elevated Roshan Navagamuwa, who over the past year served as interim CIO, to be its CIO and executive vice president, responsible for integrating the various technologies used by CVS and its recent acquisition, Aetna.

Report From The Grass Roots

Fox Business reports that style doyenne and business magnate Martha Stewart said yesterday “that she has partnered with marijuana grower Canopy Growth to develop a new line of CBD-based products for both animals and humans.

“Stewart is expected to play an advisory role in the development of the new products along with Sequential Brands Group, a consumer brands company that works with the homemaker.”

Editorial continues after a word from our sponsor...

Industry Drumbeat

“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.

Now back to regularly scheduled editorial...

Your Views: The Real News

Got the following email from an MNB reader describing a recent interaction - or lack of one - with Walmart:

Last summer I wrote a two page letter – highly constructive – in  how they could improve their on line ordering system – my wife had ordered an item online to be picked up at our local store – it took two typed pages to describe the not so comedic missteps.  In the last paragraph I commended the efforts by the store personnel who did their best to quickly remedy the situation only to be thwarted by the Walmart computer systems and persons on the other end of the phone lines they called.  I sent the letter one copy each to the Walmart leaders.  Never got a response.  Not sure I expected them to answer personally but thought someone would.  One letter lost, maybe, two???



Regarding the cannabis market, my friend Dr. Russell J. Zwanka wrote:

Your reader response Thursday shows the amount of information we need to ensure customers understand in the food industry.  In the absence of information, there is a void filled with innuendos and assumptions.

CBD is not THC, but treats your Endocannabinoid System (ECS) with the same beneficial properties without the "high".  Your ECS is the part of your body constantly fighting to maintain, or regain, homeostasis.  The three parallel streams of CBD, recreational THC, and medical THC are naturally causing confusion- but that's what our industry is supposed to help solve for our customers.  

CBD is the most impactful sales trend, category-wise, we're going to see the next few years.  The pent-up demand is water popping holes in the dam!  We're out of fingers and it's cracking!  

One bit of advice for anyone selling CBD, have a category approach to the various forms of introducing CBD to the body: 
Sublingually avoids the digestive system and starts to work immediately.  These are the tinctures.  

Topically enters the blood stream almost as quickly as sublingually, and is seeing a solid trend in use!  These are the salves and roll ons.
Ingesting must go through the digestive system, so takes longer to impact the body.  But, it does last longer.  These are the infused foods and gummy bears, etc.  A warning on infused foods is being careful not to just source everything.  Serving sizes are out of whack for impact (you need a ton of gummy bears to have any impact!).
And, the one with the most stigma attached....vaping.  Vape oil is the one most retailers will have difficulty wanting to sell, for obvious reasons.  Vape works almost immediately.

And, as a category you should not ignore, you have got to be involved in the Pet CBD.  CBD for pets is off the charts, especially dogs!  

Confusion and opportunity are high for CBD....had to do that, sorry.


I want to recommend to you Russell’s new book, “CBD Dreams: A Retailer’s Case for Cannabidiol Sales,” which is available on Amazon.



Finally, I wrote yesterday:

For the record, when Amazon stops innovating, I’ll stop reporting on it.

Prompting my old friend Gregory Grudzinski to write:

Love this line.

Thanks. Though, now that I think about it, when Amazon stops innovating, that’ll be the REAL news…

OffBeat

…will return next week.

Have a great weekend, and I’ll see you Monday.

Sláinte!!

PWS 53