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Thursday, June 20, 2019

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FaceTime with the Content Guy: Data Weaponization


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.

I want to refer you to the new Retail Tomorrow podcast that we posted here on MNB a few days ago. Not just for purposes of promoting what I think is a really good discussion - recorded at the United Fresh Marketing Association conference in Chicago - about where fresh marketing is going in the future, especially as it relates to self-care, but because of an exchange - not related to the core subject - that I think is really important.

One of my guests was Michael Stebner, who is in charge of all things culinary at the Sweetgreen fast casual restaurant chain. He told me that he lives in Los Angeles and was a longtime Whole Foods shopper.

For years, because he has a busy live, Michael ordered online from Whole Foods, via Instacart; Whole Foods was an early Instacart customer, and even put some money into the then-fledgling delivery company.

When Amazon bought Whole Foods, as we all know, the Instacart relationship was doomed to end. That was no problem for Michael - he just switched over and started ordering from Whole Foods and Amazon made the deliveries.

Not everybody makes that decision. Last week in my “Innovation Conversation” with Tom Furphy, we discussed a new Barclay’s research paper, “Dissecting The Instacart Addiction,” which made the point that more than four out of 10 Instacart shoppers say they would switch retailers if Instacart stopped being available at the retailer where they’ve been using it. In other words, they essentially think of themselves as being Instacart customers, not customers of the retailers that signed on with Instacart.

But not Michael.

This is where it got interesting.

Michael told me during the podcast that he got an email from Instacart explaining that it no longer had a relationship with Whole Foods - and then the email listed all the purchases that Michael had made at Whole Foods via Instacart, and identified current Instacart partner retailers where those same products could be bought.

That’s right. Instacart basically weaponized Whole Foods’ shopper and transaction data to use against - wait for it - Whole Foods.

Now, I have no idea who or why a contract was signed by Whole Foods that gave Instacart ownership and use of its data. I have no idea how many other retailer contracts give Instacart those same rights … though I’d be willing to bet that more of them do than don’t.

But this is nuts.

It gets even more nuts. I totally believe the rumors that Instacart plans to open dark stores in certain markets, which will give it the ability to serve shoppers who see themselves as Instacart customers without the participation of any local retailer.

Instacart, in other words, isn’t a service provider. It is a competitor … at least based on the scenario that Michael Stebner sketched out for me.

Why would any retailer essentially sign away its customers?

In this case, Instacart made retailers an offer they could not refuse - an inexpensive and easy way to get into the e-commerce business and to compete with the likes of Amazon. Lots of people took this offer - Instacart has said that it was almost a godsend when Amazon bought Whole Foods, persuading even skeptics that they had to do something, and Instacart was standing there with an accessible and attractive solution.

Remember the line from Mark 8:36…

For what does it profit a man to gain the whole world and forfeit his soul?

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

Thursday Eye-Opener: Milk Run

by Kevin Coupe

Good piece in the Portland Business Journal about Milk Run, a new company that is seeking to help the troubled small farmer community, using the slogan, “rad farmers equals a rad future.”

According to the story, founder Julia Niiro, herself a farmer, conceived of the idea while driving her truck to Portland, when she realized that she was passing the homes of people who eventually would be eating her food; she also was painfully aware that 90 percent of farmers in the US are struggling, 85 percent are 65 years old or older, and that small farms are being overtaken by big companies.

“MilkRun connects local farm food to Portland customers through a grocery-delivery service,” the Journal writes. “Since MilkRun came out of beta in December 2018, the company has over 3,500 online sign-ups and completes over 500 deliveries per month — a 300 percent increase in monthly revenue from when they started … Customers can purchase locally made food — such as baked-fresh-to-order bread, dairy products, meat and vegetables — on MilkRun’s website. The farmers then drive the produce to one of three MilkRun micro-depots in Portland and make deliveries to coolers on customers’ doorsteps.”

The story says that “MilkRun plans to soon expand to Seattle for a pilot program. They’re also looking to bring the service to Austin, Detroit and Denver in the next few years.”

Niiro says her goal is simple - to make “buying direct from local farmers as easy as shopping on Amazon, but with the impact and quality of the farmers market.”

I know this isn’t exactly a new concept, but I like it a lot, and Portland in so many ways seems like an ideal market for it to work. It is a place where people seem to like as thin a layer as possible between the farm and the fork, and it has a vital farmers market culture.

I’m looking forward to testing it out when I get to Portland in about a week for my annual Portland State University adjunctivity. I think it’ll be an Eye-Opener.

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From GMDC...

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Walmart Sees Middle Miles As Fast Lane For Autonomous Vehicles

Bloomberg has a story about how Walmart is testing autonomous vans for what are called the “middle miles,” traveling “fixed routes from warehouse to warehouse or to a smaller pickup point, transporting packages to get them closer, but not all the way, to consumers.”

These routes, the story says, are seen as offering the opportunity to save money and improve efficiency. “Many of these routes are already established using human drivers today, so there’s little need to map new paths and create infrastructure to load and receive the goods,” the story says, adding, “This may be the least glamorous part of the driverless delivery business, but the market for these monotonous ‘middle miles’ could reach $1 trillion and may provide the fastest path to prosperity, analysts say.”

“This area has the least number of obstacles and the most certain return on invested capital in the near term,” Mike Ramsey, an analyst with consultant Gartner Inc., tells Bloomberg. “If you’re looking to start a business where you can actually generate revenue, this has fewer barriers than the taxi market.”

KC's View: Seems likely to me that the real savings, especially in the short term, probably will come from the non-sexy, least glamorous stuff. It also seems likely to me that Walmart is well-positioned to know where these pockets of opportunity are, and go after them relentlessly.

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From The Organic Produce Summit...

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Martha Stewart Gets Into The Pot Business

Style doyenne Martha Stewart has long been a friend of marijuana enthusiast Snoop Dogg, with whom she also co-hosts a cooking show. That partnership now has led to Stewart herself getting into the pot business.

Bloomberg reports that Stewart is “working with pot giant Canopy Growth Corp. to develop cannabis-related animal care, cosmetic and food products.”

According to the story, “Stewart revealed some details of those products for the first time at the World Cannabis Congress in Saint John, New Brunswick. ‘We’re working in animal care, we’re working in cosmetics, body care,’ she said. ‘I’ve been experimenting little bit with some of the good products that are available now, I find them very useful and really good for your skin, and I think the anti-inflammatory qualities of some of them are very good’.”

She also plans to get into edibles: ““We have so many recipes,” she said. “Martha Stewart Living has 30,000 or 35,000 original recipes, and those can be adapted with cannabis or CBD or whatever we’re going to use.”

Stewart urged the broader cannabis industry to follow a simple strategy: “Make the best product at the best price and distribute it as widely as possible.”

KC's View: The first thing that occurred to me whether getting involved in the cannabis business might create problems for Stewart because of the terms of her parole from prison. (She went to prison in 2004 on charges related to securities fraud and insider trading. In retrospect, this strikes me as a travesty - not that she went to prison, but that she was virtually the only person of any note who has gone to prison for such things.) But her parole ended logo ago, so I’m sure she’s fine.

It is a reflection of how mainstream the cannabis business has gotten that people like Martha Stewart are getting into it.

One other note, just as a public service. Once you’ve consumed Martha Stewart cannabis-based products, here is a recipe for her soft-and-chewy chocolate chip cookies. Y’know. Just in case.

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Judge Blocks CVS Exec From Working For PillPack

Reuters reports that a federal judge has issued a temporary injunction preventing John Lavin, a former Senior Vice President, Provider Network Services at CVS, from taking a job at Amazon-owned PillPack, which is a full-service online pharmacy that sorts and packages medications and delivers them to consumers in dated and labeled packets.

The judge said that “allowing him to take a job where he would help drive its ‘disruptive strategy’ would violate a non-compete agreement, and that PillPack is “a CVS competitor and that his job there would be substantially similar to his old one.”

The Providence Journal writes that “Lavin, an Arizona resident, was CVS’s senior vice president for provider network services until his resignation on April 19. Lavin and CVS had signed an agreement in 2017 that would bar him from working for a competitor for 18 months in exchange for shares of CVS stock worth $157,500.”

Lavin has 30 days to appeal.

KC's View: Hard to imagine that Lavin can go back to work for CVS, and it doesn’t look like he’ll be going to PillPack until October 2020 at the earliest … because there’s no question in my mind that PillPack is an enormous potential competitor to CVS.

I kind of feel bad for the guy. I hope the $157,500 was worth it.

LL Bean Hails An Uber

Marketing Daily reports that outdoors retailer LL Bean “is teaming up with Uber in major cities to offer free, on-demand rides to the ‘L.L.Bean Backyard Campsite,’ a pop-up destination that will debut Thursday from 10 a.m. to 6 p.m. in New York’s The Battery.  More campsites will follow in Buffalo, NY; Madison, Wis.; and Boston throughout June and July.”

According to the story, “The effort is part of the ’S’more Out of Summer’ campaign, under the brand’s ‘Be an Outsider’ platform. Consumers also can enter to win the ‘Ultimate Backyard Campout,’ which includes a tent, sleeping bags, fire pit, camping attire, and L.L.Bean experts to set it all up.”

KC's View: It is a good model for other retailers to take a look at, I think. LL Bean has done an excellent job of translating its position as a purveyor of outdoors clothing and products into an even more active position, going to consumers (and not just through its stores-website-catalog businesses) rather than waiting for consumers to come to it.

This is part of the LL Bean transformation … which, as it happens, will be the subject of a podcast that I’ll be recording next month with Stephen Smith, LL Bean’s CEO, at GMDC’s Retail Tomorrow immersion conference in Boston. I’m really excited about it - I think that LL Bean, faced with some challenges like many tradition-laden companies, has been exceptional in navigating and transcending them.

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From Webstop...

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From Ideoclick...

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Worth Reading: Food From Food Waste

Fast Company has a story about startup companies are developing technologies that will be able to turn what used to be wasted food into food products that can be sold to consumers. It is, the story says, “an increasingly crowded space.”

Here’s the context:

“In the U.S.—where Americans now waste 70% more food than they did in the 1970s—food waste is responsible for roughly the same amount of greenhouse gas emissions as 37 million cars. Globally, if food waste was a country, it would be the third-largest polluting country in the world. When food rots in landfills, it releases the potent greenhouse gas methane. But the largest source of emissions comes from growing the food; even if it’s composted, food waste also wastes the fertilizer, fuel, and other resources that went into producing it. Agriculture uses nearly half of U.S. farmland and two-thirds of its freshwater. Waste happens at every stage of the process, from farm fields—where food may be abandoned if a farmer has a surplus or the food has imperfections—to distribution centers, supermarkets, restaurants, food processing plants, and homes. Consumers throw out the majority of the food wasted in the U.S., or roughly $450 of food each year. At the same time, more than 40 million Americans struggle with hunger. The problem is smaller in most other countries (Australians waste more, per capita) but still significant.”

You can read the entire story, and learn about some of the more interesting startups, here.

E-conomy Beat

• Amazon announced this morning that it is expanding its AmazonFresh offering to Las Vegas. The company says that “starting today, Prime members in Las Vegas can shop tens of thousands products from meat and seafood to fresh produce and everyday essentials for ultrafast one- and two-hour delivery from AmazonFresh.”

FastNewsBeat

Delish reports on new rankings saying that Chick-fil-A, now the third-ranked fast food chain in the country in terms of annual volume ($10.5 billion), is on pace to pass Starbucks ($20 billion) to become number two.

McDonald’s is number one at $38 billion in annual sales.

The story suggests that while it will take some time, Chick-fil-A reported 16.7 percent sales growth in 2018 … and if it maintains that pace, getting to the number two position seems at least a reasonable expectation.


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From Zucchi...

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Report From The Grass Roots

CNN reports that online natural/organics retailer Thrive Market is at least temporarily getting out of the business of selling hemp extracts and topicals, which it had been selling online for 18 months.

The reason? According to Thrive CEO Nick Green, the company that processes its customer payments demanded that Thrive stop selling the products if it wanted to continue doing business with it. Which, the story says, shows “how businesses remain uncomfortable dealing with hemp -- and, specifically, hemp-derived extracts rich in the non-psychoactive cannabis compound cannabidiol (CBD) -- even though the plant gained more legal footing late last year.”

CNN writes that “Thrive is not alone. Earlier this month, third-party payment processor Stripe dropped the US Hemp Authority, a nonprofit organization developing a certification program and label for hemp, as a client because it thought it was too much of a liability.”

Green said in an email to its customers that “the company believes “that ethical and sustainable hemp is another cause worth fighting for, so rest assured that we will be working behind the scenes in the coming weeks to get hemp products back on Thrive Market. In fact, we're already in conversations with a new processing partner to try to make that happen."

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A NEW PRESENTATION BY KEVIN COUPE

Steve Jobs once said, “Better to be a pirate than join the navy.” In today’s cutthroat retail environment, that attitude needs to be at the core of every business’s strategic, tactical and operational approach - challenging the status quo, doing the unexpected, creating customer-centric business initiatives and then disrupting them internally … appealing to people’s hearts and heads and aspirations … acting with piratical verve and always moving forward. In this brand new, lighthearted, illuminating and uniquely pertinent presentation, filled with examples and anecdotes and lessons, MorningNewsBeat’s Kevin Coupe brings a passion for storytelling and a unique perspective on business that will entertain and energize audiences.’’

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Your Views

…will return.

Harvesting Opportunities Beyond Four Walls: A Retail Tomorrow Podcast

In this new episode of the Retail Tomorrow podcast, recorded on the exhibit floor at the annual United Fresh Produce Association show in Chicago and produced by GMDC, we focus on the the opportunities and challenges that the self-care movement creates for companies looking to take advantage of it, how retailers can go beyond their four walls and develop an “outpost marketing” strategy, and the degree to which information can be the most compelling marketing tool.

Our guests:

• Michael Stebner, director of culinary for Sweetgreen, the salad-centric fast casual restaurant chain

• Peter Steinbrick, director of national sales at Melissa’s, an importer and distributor of exotic and specialty fruits and vegetables

The host: Kevin Coupe, MorningNewsBeat’s “Content Guy.”

You can listen to the podcast here, or on iTunes and GooglePlay.

This edition of the Retail Tomorrow podcast is sponsored by Hillphoenix, shaping the future of retail through technology and design innovation.





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