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Friday, June 28, 2019

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Friday Eye-Opener: Flickering Viability For Small Products

by Kevin Coupe

This one comes right from MNB’s Department of Metaphorology…

The Los Angeles Times reports this morning that movie theatre giant AMC “is spotlighting a select set of ‘character- and narrative-driven movies’ through a new marketing and programming initiative in some of its U.S. theaters … The program, dubbed AMC Artisan Films, will seek to boost certain movies that might have trouble gaining traction as moviegoers increasingly choose well-known brands, such as Marvel Studios and Pixar, over midbudget dramas, comedies and quirky independent fare. The dominance of movies such as Avengers: Endgame has made it tough for critically acclaimed pictures such as Booksmart and Late Night to get oxygen at the local multiplex…”

I’m completely in favor of such an initiative, though I’m a little skeptical about its ability to have a sustained impact on the movie business; all these companies are public, and investors will argue that if showing an Avengers movie is best for the bottom line, then show Avengers on as many screens as possible.

But … this is a shortsighted view. Businesses - whether retailers or theatres - are best served by a robust and diverse selection of products that are not always the same as what everybody else is selling. It requires patience and nurturing and some education of the customers.

How about offering a discount ticket to Booksmart to people who buy full-price tickets to the latest Avengers movie? This would be the same as giving a coupon for a new specialty food product to people buying a more traditional version … it allows for the opportunity to trade people up, which theoretically is good for everybody.

I hope AMC gets it done, and that it works. It may prove to be an Eye-Opener to a lot more businesses.

Instacart Exec Defends Company’s Priorities, Strategies

Modern Retail has an interview with Nilam Ganenthiran, chief business officer at Instacart, in which he talked about how his company “has been adding new capabilities to its business model and diversifying revenue streams as it seeks to ‘bring all of the grocery store online’.”

Some excerpts:

• “Nothing has helped us more than the brick and mortar grocery industry realizing that their customers need e-commerce. There have been multiple inflection points in the journey of Instacart, and one of those inflections was the Amazon-Whole Foods acquisition. That was a tipping point that forced innovation in e-commerce. Instacart’s role in that journey was to be the technology leader and innovation partner for our 300 grocers. Walmart and Amazon’s moves have shown us and our retailer partners that the customer needs things like pickup.”

• “We’re currently in the process of making sure our retailers will know exactly what the customer wants, when she wants it, and how she wants to get it. It sounds simplistic but it’s all solving different technical and product problems that require different levels of understanding.
Today, we are a late-stage private company. We’re in a position where the business works on a unit-economic basis, and we can be considerate about an IPO. We’ve been consistent that we intend to be an independent company. That’s the only path. We can stay private as an independent company, but at some point, an IPO is on the horizon.”

Responding to a question about whether Instacart wants to become a grocer and not just a technology provider, Ganenthiran said:

“I want to be unequivocal and direct about this, because it’s been speculated about for a long time: Instacart will not be in the grocery business in terms of owning our own merchandise or launching our own brands. We work in partnership with our retail partners. Our reason for being is to be a software and logistics layer for the grocery industry. We have no interest in backward integrating into the category.

“At the highest level, it’s not the business we want to be in. We don’t want to be grocers. Digging deeper, it makes no sense practically or economically for us. Our hack on this system was proximity: We have access to 22,000 retail stores today that are located next to the consumers with the exact assortments that the customers in that area want to shop for, at the price point and with brands that matter to that area. The reason Instacart has pioneered in the industry was that original insight, that proximity matters. Not just for logistics and getting stuff to customers cheaply, but because these grocery brands grew up in these communities. We think it’s a fool’s errand to try to build another company to compete with that.”

KC's View: I’m not buying it. No way.

If this is in fact the case, why is Instacart actively looking to open so-called dark stores that would allow it compete in markets where it does not have retail partners, or with the retail partners it has in certain markets?

We know that Instacart has weaponized data that is has accrued from retailers against those retailers when it served its own best interests.

We know that there are places where Instacart is being identified by consumers as being their grocer, as opposed to the retail brands that are supplying the merchandise and the technology.

Yes, Instacart is doing everything it can do drive reach and profitability so it can drive up its IPO price. This is good for Instacart and its investors, but I would argue that while Instacart can be an effective short-term solution for retailers looking to quickly get into e-commerce, it is a long-term nightmare in the making, undermining retailers’ value proposition and their relationship with their shoppers in ways that may be irreparable.

Here’s a suggestion to retailers that have a relationship with Instacart. Check your sales data, and look to see how many times Instacart has substituted a private label item that has been ordered by a shopper with a national brand. Then, find out if indeed that private label item was out of stock. I’m not saying that I know this is happening … but I do know that this is of concern in some quarters, and maybe it should be of greater concern to others.

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Industry Drumbeat

From GMDC...

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Activist Group Calls For Probe Of Walmart On Anti-Competition Grounds

CNN reports that the Institute for Local Self-Reliance, described as “a nonprofit group that criticizes Walmart, Amazon and other large companies,” is calling for a federal probe into whether Walmart is anti-competitive by dint of its size and influence, and that it should be “forced to sell off some of its stores.”

The story says that because “Walmart is the nation's largest grocer,” controlling “around a fifth of the grocery industry nationwide,” its strength “in some corners of America is overwhelming and has stifled competition.”

CNN writes that the Institute for Local Self-Reliance “'challenges concentrated economic and political power’ and advocates for widely-dispersed responsibilities in local communities.” It is calling on the Federal Trade Commission “to review the 203 markets where Walmart controls 50% or more of grocery sales, and, ‘in as many as is feasible, compel the retailer to divest stores’.”

KC's View: Is Walmart huge? Sure. Crushing sometimes? Absolutely. Anti-competitive? Certainly, especially if you happen to be the competition.

But I also think that sometimes Walmart has achieved its preeminence in some markets because other stores there didn’t compete effectively. They did thins the way they’d always done them, rather than looking for Walmart’s weaknesses and exploiting them.

What happens if Walmart sells a couple of hundred stores, and the retailers that buy them don’t offer a competitive shopping experience? Who is that serving?

Besides, even if Walmart were forced to sell stores, it could effectively market to shoppers in those markets through its e-commerce business, which could hit the competition equally hard. Unless, of course, the Institute is interested in also banning e-commerce companies from serving certain markets. None of which seems productive in my view.

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From The Organic Produce Summit...

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How To Make Vegetables Out Of Meat

While all the energy these days seems focused on creating plant-based foods, including some that emulate the look and feel of meat, Fast Company has a story about how Arby’s has in development something called a “marrot” - a carrot made out of meat.

According to the story, “Specifically, the marrot is a seasoned, marinated turkey breast, cut and rolled into the shape of a carrot. It’s cooked sous vide. Then it’s rolled in dehydrated carrot juice and oven-roasted. The marrot is finished with a brûlée of maple sugar and a sprig of parsley on top.” Arby’s chief marketing officer, Jim Taylor, says that it is high in protein and vitamin C.

Taylor says, “So we said, ‘If they can make meat out of vegetables, why can’t we make vegetables out of meat?’ We’re going to introduce to the world a category we call ‘megetables’—we’ve applied for trademark.”

Fast Company writes that “for now, the marrot is nothing more than a concept out of the Arby’s test kitchen. Depending on public response, the company may or may not bring it to market as a limited-time promotion. If it does, the promotion will be similar to how the Arby’s featured venison on the menu in 2016 (which sold out in just two hours given eager demand and extremely limited quantities).”

But mostly, the story says, “The move is a gleeful troll by the carnivorous fast food chain that recently announced it’s never going to sell fake meats like the Impossible Burger. While some fast food chains - White Castle, Burger King, and KFC - are doing so as a way to appeal to “woke, flexitarian consumers,” Arby’s essentially is just saying, “Not us.”

KC's View: I’ll buy this as trolling, but not so much if it is a serious effort to create a “megetable” market. But maybe I’m being excessively skeptical.

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Sobriety Gets Its Marketing Moment

The Washington Post reports that sobriety is having a moment:

“here are sober nightclubs, sober early-morning dance parties, Instagram influencers who anchor their online identities with an eschewal of alcohol. The number of alcohol drinkers in the world has decreased by nearly 5 percent since 2000, according to the World Health Organization. The Beverage Information Group reports beer sales have slumped for five years in a row.

“Alcohol brands are paying attention: Diageo (the world’s second largest distiller and parent of Guinness, Smirnoff and Johnnie Walker) recently funded a nonalcoholic spirits company called Seedlip. In cities like New York and Los Angeles it is routine for restaurants to have separate nonalcoholic drink lists, online searches with the word “mocktail” are up significantly, and online magazines like the Temper have debuted to defiantly tout the benefits of a sober lifestyle.”

The moment seems to have less to do with concerns about addiction and more about the “burgeoning wellness movement” and a desire to be more temperate in personal behavior.

The Post writes that the movement is creating “ongoing ripples among distilleries and breweries as the industry figures out whether this is a blip or a movement with staying power.”

KC's View: Once again, I have my finger on the pulse of the culture. I’ve recently cut back on my consumption of beer, but I’ve added in vodka (mostly Tito’s, with club soda and lime) and, during the colder months, bourbon. So, as the culture is embracing not drinking, I’m for the first time in my life drinking the hard stuff.

E-conomy Beat

DigitalCommerce 360 reports that Amazon, has launched the Amazon Professional Beauty Store, designed to appeal to hair stylists and barbers as “an online source for products ranging from hair-coloring supplies and barber shears to storage carts and massage tables … Amazon is restricting its sale of ‘professional-use’ products to buyers with a license to practice their craft, such as state-issued cosmetology, barber or esthetician licenses. Buyers can upload images of their licenses to set up an online account and gain access to products.”

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From Webstop...

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From Ideoclick...

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The MNB Walmart Watch

Bloomberg reports that Walmart “is expanding its next-day delivery service to more than a dozen new states as the world’s biggest retailer girds up to battle Amazon.com Inc. for back-to-school shoppers … The offer, which debuted in May for customers in Phoenix, Las Vegas and Southern California, is now available in the South and Midwest, including in parts of Florida, Georgia, Illinois and Wisconsin.”

Walmart has said it would like next-day delivery to be available in about three-quarters of the U.S. by the end of the year.


Business Insider reports that “Walmart is offering thousands of deals to counter Amazon Prime Day,” hoping to “steal some fire” from the promotion that last year reportedly generated some $4 billion in sales for Amazon.

This year, when Amazon decided that it will have two Prime Days - July 15-16 - Walmart “is planning to release thousands of ‘special buys’ and ‘rollbacks’ - which is Walmart's term for discounts - between July 14 and 17, a Walmart spokeswoman told Business Insider. Deals will include discounts of more than $100 on items like the HP 15.6-inch HD Touch Display Laptop and the Dyson Multifloor Bagless Upright Vacuum, the company said.”

According to the story, “This isn't the first time that Walmart has offered discounts to rival Amazon Prime Day. The company, along with hundreds of other retailers, including Target, eBay, and Macy's, now offers discounts every year around the annual shopping event. Analysts have started referring to this widespread promotional activity as ‘Black Friday in July’ … About 70% of consumers plan to shop Amazon during the July sales events, while 44% plan to shop Walmart, 40% plan to shop Target, and 24% plan to shop Best Buy, according to a survey by Bazaarvoice, a retail consulting firm.”

FastNewsBeat

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

• Publix Super Markets has opened its third GreenWise Market, which it describes as “a specialty, natural and organic store featuring a curated selection of unique, local and organic items,” in Mountain Brook, Alabama.

The company says that “the first new-concept GreenWise Market opened in Tallahassee, Florida, in October 2018, and the second location opened last month in Mount Pleasant, South Carolina. Seven additional locations have been announced, and three of those are expected to open this year.”


CNN reports that all is not venti for Starbucks in the UK.

The story says that as Starbucks is closing stores there, it is losing money in its sixth largest global market - it lost the equivalent of $22 million (US) there during the last fiscal year. It blames the red ink on “costs including store closures and higher wages.”

CNN writes that “the American chain is the latest in a series of restaurants and retailers to come under pressure in Britain, where many businesses have struggled with the transition to online shopping and uncertainty about Brexit.”


• The New York Times reports that PepsiCo plans to start test-marketing its Aquafina brand of water “in aluminum cans at some retailers and food-service providers.”

Stacy Taffet, the Pepsi vice president who oversees the company’s water brands, acknowledges to the Times “that while many kinds of fizzy water already came in aluminum containers, drinking still water from a can would be ‘a newer behavior’ for many people.”

The Times notes that “in recent years, public sentiment has turned against single-use plastic items, which can end up accumulating in landfills or floating in oceans. Across the world, only 9 percent of all the plastic ever made has been recycled; by contrast, 67 percent of the aluminum bought by consumers every year is reused.” However, “there’s a limit to how much environmental good Pepsi’s new packaging can achieve. While putting water in aluminum cans and recycled plastic is a step forward for the industry, the best way for consumers to protect the environment would be to give up packaged water entirely, said Peter Gleick, the author of a book about bottled water.”

I ordered some Liquid Death, a spring water packaged in aluminum, and asked my kids to drink it. They hated the taste and the can. My daughter brought it to work, and the reaction to the packaging was equally hostile. I’m not saying that they can’t get past these reactions, but their work is cut out for them.

Executive Suite: Retirement Edition

• Jony Ive, who is seen as second only to Steve Jobs in terms of influencing the unique design aesthetic that has defined Apple’s products for the past two decades, announced yesterday that he is stepping down from his role as chief design officer at the company. He will set up his own design company, called LoveFrom, with Apple as its first client.

The Financial Times writes that “news of another leadership change so soon after retail chief Angela Ahrendts left in April, at a time when trade tensions between the US and China have destabilised iPhone sales, brings yet more uncertainty for Apple investors after a tumultuous first half of 2019.”

Your Views: Wedding Bells

Got several emails responding to yesterday’s FaceTime, which drew a metaphor from the changing priorities of young people about to get married; rather than housewares and fine china and flatware and bedding for which young people used to register, these days engaged couples are asking for things like TSA Pre-Check … tickets to Harry Potter World … snorkeling lessons … gifts from places like REI … fertility treatments … or money they can put toward college loans or down payments on homes. They are either being practical or seeking experiences, which I argued offers a good lesson with broader implications - the next generation of consumers has a different set of priorities than their elders, and retailers have to be prepared to cater to them.

MNB reader Clint R. George responded:

Enjoyed the FaceTime this morning.  I was married nearly 20 years ago, 1999, and we were also registered at REI.  I am not sure if that was the first year they made this available but it was great as our honeymoon consisted of camping (part time only) in Banff and at the time we needed an update to our camping equipment.  We were able to get people to go in on a tent, sleeping bags, pads, etc.  
It was great to find this gem of a registry at the time which fit our lifestyle.

Keep up the great work!


And MNB reader Gary Harris wrote:

Small world. We have family friends getting married who have a wishlist of camping gear, with the option of just sending a gift card from REI. Refreshingly new idea! Hopefully there’s some common sense coming into this, too.

I’ve seen lots of planning (and expense) in preparing for upcoming nuptials only to have the marriage collapse before the wedding is paid for.  It’s heartening to see some thought go into starting a new life together which looks beyond the event to the time after, which is what really matters. Oh, and my daughter had a doughnut cake at her wedding. Just sayin’.


It is a pretty good rule of thumb to understand that the marriage is a lot more important than the wedding.

OffBeat: Food Enthusiasms

I’ve been continuing my live theatre run, and went with my daughter last weekend to see the musical “Waitress,” based on the movie of the same name. And we found it to be utterly delightful. The good news is that “Waitress” currently has a national tour, so it may be coming to you.

“Waitress” is the story of Jenna, a young woman living in the southern US, struggling to make ends meet as a - yup - waitress, and enduring an abusive relationship with her husband, Earl. One of her few pleasures is baking pies - and it happens to be something at which she is extraordinarily proficient and innovative.

Life gets even more complicated when she ends up pregnant … and then engages in an affair with her obstetrician. As unlikely as this may seem, the play - as did the movie - turns it into something lovely and charming …. the music and lyrics by Sara Bareilles manage to capture Jenna’s desperation and yearning.

It is instructive to note that “Waitress” had four women were at the helm in leading creative roles - reportedly the first time this had happened. It also is worth pointing out that “Waitress” has all the instincts of a really good retailer - when you enter the theatre, you can smell pies baking, and it is entirely immersive. And, they have waitresses wandering the aisles before the show and during intermission, selling slices of pie.

“Waitress” is terrific - frothy and fun and yet offering some positive lessons about both life and business. If it comes to a city near you, make the effort.



One of my favorite movies of the past few years is Chef, which was written and directed by Jon Favreau, who also starred as a high profile Los Angeles chef, Carl Casper, who finds himself the unexpected subject of critical ridicule on a foodie website; he ends up redeeming his career and personal life via a food truck in which he recaptures his passion for cooking.

Favreau apparently hasn’t lost his enthusiasm for the subject, because he now has produced a new eight-part series for Netflix, “The Chef Show,” which is sort of a cooking show/travelogue/talk show that, in the end, celebrates all sorts of cuisines. From barbecue in Austin, Texas, to the small yet innovative restaurants that were the beat of now-deceased Los Angeles Times food critic Jonathan Gold, “The Chef Show” will make you hungry and anxious to hit the road and sample many of the dishes featured on the series.

Trust me on this - “The Chef Show” is so good that you can almost smell the food through the screen. And it benefits enormously from the presence of Roy Choi, a Korean-American chef who has been enormously influential in the nation’s food truck movement; Choi was a consultant on the movie Chef, and his unfussy enthusiasms and considerable expertise bolster Favreau’s approach in the series.

The bonus - in the first episode, they teach us how to make the Cuban sandwich and the grilled cheese sandwich that were the soul of the movie. (And make sure you pay attention to the beignet sequence … which is the moment you always wanted to see on a cooking show.

Great stuff.



As the days get hotter, it is great to find a wine cold and crisp and refreshing. And so, I submit for your consideration the 2015 Château de Lardiley Sauvignon, which is a Bordeaux Blanc from France. It has a slight citrusy thing going for it, and is absolutely delicious.

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Industry Drumbeat

HOW TO BE A RETAIL PIRATE: Authentic, Relevant, Resonant, Rapid, Revolutionary (ARRRR!)

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.’’

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!”

To book Kevin for your upcoming event, click here , or call him at 203-253-0291.


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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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