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Monday, September 16, 2019

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Monday Eye-Opener: Stealing Home

by Kevin Coupe

Normally, stealing from a retailer is frowned upon. But according to Fast Company, Chipotle has decided to embrace it.

The problem was that too many people were stealing the small Tabasco bottles that the fast feeder kept in its stores so people could add it to their burritos. But they were so small - and people liked them so much - that they were disappearing at an alarming rate, especially at Chipotle units near college campuses.

Rather than fight it, Chipotle now has decided to make available “Things You Borrow” kits that include a pile of napkins, some forks, and two Tabasco sauces … all given to people who place digital orders at its stores, and in some cases to people who actually come into their stores.

It is an Eye-Opening approach. “Chipotle seems to recognize that there’s only so much you can change consumer behavior,” Fast Company writes, and so it may be better off just accepting the fact that people are going to steal its condiments.

In fact, after a period of time during which people stopped going to Chipotle because of a series of food safety problems, maybe it ought to be thankful that people are coming it at all … losing condiments may just be part of the price of remaining in business.

Walmart Goes Deep With New Health Center Concept

Forbes has a piece about the opening of Walmart’s first health center, featuring “an array of primary medical services, dental care, and behavioral health services as part of a new model expected to eventually be replicated in other markets,” offering things like optometry, counseling, laboratory tests, X-rays, hearing, and wellness education.

“We are creating a super center for basic healthcare services,” says Sean Slovenski, senior vice president and president of Walmart Health and Wellness.

The 10,000 square foot center, in Dallas, Georgia, is said to be about six times the size of the more limited Care Clinics that Walmart has used in other stores; another, similar center will open in Calhoun, Georgia, next year.

In its assessment, Forbes writes that “Walmart’s new Georgia location opening comes as rivals CVS Health and Walgreens Boots Alliance push further into outpatient healthcare services through various models. The retailers see 10,000 baby boomers aging into Medicare coverage each day and are also looking to fill emptying space in their brick and mortar stores in the face of changing consumer shopping habits driven by online retail giant Amazon, which is also exploring new ways to get into the healthcare business but has yet to offer face-to-face personalized healthcare services for customers.”

One interesting thing about the Walmart Health center - Forbes points out that the physicians and dentists working there “are providers already in the community.”

KC's View: The growing focus that so many companies have on healthcare would, in my estimation, be at least partly a reflection of the fact that a) they believe the current system is not working as well as it should, and b) they believe that political polarization has gotten to the point that nobody actually is going to fix it.

Retailers are smart to push into this direction - if people are disgusted with the system, they’re going to embrace self-care to a greater degree, and these initiatives will enable them to take greater responsibility for their own well-being. It is all about seeing a need and responding to it.

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Math Plus Chemistry Add Up To Kona Coffee Fraud, Farmers Say

The Los Angeles Times reports that three Hawaiian farmers are suing Amazon, Costco, Walmart and 18 other companies, accusing them of selling bogus Kona coffee.

The suit is seeking “unspecified damages, a halt to sales and a national advertising campaign setting the record straight, hope to qualify the case as a class action representing all Kona growers.

“Challenging the retailers to disclose where they get their Kona coffee, the lawsuit claims that while 2.7 million pounds of authentic Kona coffee beans are grown each year, more than 20 million pounds labeled ‘Kona’ are sold at retail.”

It isn’t just that the math doesn’t seem to add up in terms of how much Kona coffee is sold. The farmers also say it is chemistry; according to the story, “The growers’ attorneys said in the suit that some of the tested samples labeled as blends might contain Kona, but so little as to be deceptive. Hawaii requires that Kona blends contain at least 10% of the real stuff, but the law only covers sales within the state.

“The findings are not peer-reviewed and the lawsuit does not identify the scientists, whom attorneys for the growers declined to make available for interviews.”

KC's View: I’m fascinated by this, for a number of reasons.

First, the courts have to buy into the farmers’ definition of how math and science add up to counterfeit coffee. It sounds cut and dried, but I would imagine that there will be lawyers and scientists coming out of the woodwork to challenge it.

I have to be honest - the idea that a product identified and sold as Kona coffee only has to be on-tenth Kona coffee strikes me as a pretty crappy approach to regulation. I wonder how many people shelling out money for Kona coffee know about this regulatory sleight of hand. I’d bet not many.

It’ll also be interesting to see if the courts hold the retailers responsible for selling counterfeit Kona, or if the retailers will be able to get away with arguing that it isn’t their fault, that they’re just selling products manufactured by others, and that those are the culprits in this case. There’s a part of that that buys that, but I also think that at some point retailers have to take responsibility for what they sell. That also seems to be the way the courts are trending, as in a recent case in which Amazon was held responsible for the safety of a product sold on its Marketplace site.

This case has the potential for challenging a number of assumptions that, in my view, deserve to be challenged. Somebody has to stand up for the consumer, and that probably has to be the courts.

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New Commandment: Thou Shalt Not Make It Easy To Adhere To Food Restrictions

Fascinating story in the Washington Post about how food technology is making it difficult for theologians and religious believers to know what is forbidden and what isn’t.

The story notes that “dietary restrictions are woven into religious texts, the Old Testament and the New, the Koran, the Vedas and the Upanishads.” But, “in this era of plenitude and choice and disruptive technology, what is permissible, what is forbidden and what is flouting the letter of religious law? The food system is in flux, the rise of plant-based meats and the promise of cell-cultured meats bending categories such that legislation, ideology and theology are scrambling to keep up.”

For example, Tyson “is investing in a company that will launch plant-based shrimp early next year, raising a curious question. Will it be kosher? The short answer is its ingredients — which mimic the verboten crustacean with a proprietary algae blend — could well be both kosher and halal. Once the product launches, the company will seek certification so that Jews who keep kosher and Muslims — certain Muslim groups avoid shellfish — can enjoy a shrimp cocktail, scampi, a po’ boy or ceviche.”

But: “If God says no pork, how does He feel about a very persuasive forgery? And if only beef from the forequarter is permitted, how will observant Jews parse meat grown in a lab, no bones and no quarters at all? How do you bleed an animal with no blood or slaughter an animal humanely if there’s no slaughter? And if you give up meat for Lent, what constitutes a cheat?”

KC's View: File this in the “problems that just a few years ago we never thought about” folder.

It is an interesting moral dilemma. If you’re not supposed to eat meat for religious reasons, and someone gives you a plant-based burger replacement, is it a violation of the spirit of the law, as opposed to the letter of the law, if you eat it?

I suppose it depends on how religious or devout you are, and how to define such matters as being important to how you practice your faith. But I do love a good moral dilemma … especially other people’s moral dilemmas.

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How One Disruptive Retailer Seeks To Avoid Falling Asleep At The Switch

The New York Times has a story about how the Casper mattress company, having successfully contributed to the disruption of the traditional mattress business, is trying to take the next step and continue its disruptive ways.

Here’s how the Times frames the story:

“Casper has quietly acknowledged that it’s not enough to be a mere foam-slab company. The start-up needs a bigger market, and the concept it’s embracing is sleep itself.

“Five years ago, the start-up started slinging compressed mattresses in cardboard boxes straight to buyers’ homes — an alternative to cluttered mattress chains that tried to baffle consumers with jargon. Casper’s basic proposition, that going to a mattress store is a drag and no one should have to do it, made sense to fans of other retail start-ups trying to cut out middlemen, such as Warby Parker.

“But in the years since, Casper has had to shift positions. Dozens of mattress-in-a-box competitors crowded the market. Realizing the limitations of an entirely virtual business model, Casper began opening storefronts and selling products like pillows and sheets. All the while, the wellness industry rose up, with companies attaching their wares to a sense of higher, healthful purpose. While businesses devoted to optimizing most of the core bodily functions abound — start-ups that promise more healthful eating, more holistic hydration, etc. — no company has yet established itself as the clear leader of the sleep space.

“It’s a slightly absurd concept, until you consider that humans spend about one-third of their lives sleeping, and that the potential market is enormous.”

Enormous as in being an $85 billion business by 2021, says one analyst.

Whether it is “bed frames (starting at $365), duvets ($250), dog beds ($125),” or even Glow, described as “a cordless bedside light designed to expedite the wind-down process, a somewhat oxymoronic proposition … Glow gradually dims for 45 minutes and turns on or off with a simple shake,” Casper is trying to position itself as “the Nike of sleep.”

KC's View: Regardless of whether Casper is in the end successful in this effort, I have to say that I think it is smart to realize that if it is going to have a sustainable business model, it needs to be in the business of enabling and promoting sleep, not in the business of selling mattresses and various accoutrements. Just as food stores ought to think more about being nourishing, not selling boxes and bags and cans of stuff.

This attitude adjustment changes the way you think about the business challenge, and changes the way you think about your relationship to the customer - and all for the positive.

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Worth Reading: The Taco Editor Speaks

Last week MNB took note of the fact that Texas Monthly had hired its first-ever “taco editor.” In fact, José R. Ralat may be the first ”taco editor” anywhere.

Now, The New Yorker has an interview with him that is a hoot - he talks about the beauty of breakfast tacos, why a burrito actually is a taco, and why tacos may be “the perfect food.”

I agree with him on all counts … and you can read the story here.

Note: For some reason, as I post this the link seems not to be working. If you’d like to read the story - and I think you should, or else I wouldn’t have brought it up - just go to https://www.newyorker.com and scroll down a bit to find it.

E-conomy Beat

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

• The New York Times reported over the weekend that the House Judiciary Committee, “which is investigating the market power and behavior of the companies, sent letters directly to Jeff Bezos of Amazon, Tim Cook of Apple, Mark Zuckerberg of Facebook and Larry Page of Google” asking to see internal communications to and from “eight executives at Amazon, 14 at Apple, 15 at Facebook and 14 at Google … The lawmakers are looking for signs of executives’ intent when they made decisions that harmed competitors.”

The Times writes that “with the request, which was posted on the committee’s website, the lawmakers sent a not-so-subtle message that executives would be held responsible for the replies, and that the investigation would continue to play out publicly.”

The big tech companies are being hit from all sides - by state and federal regulators, as well as by Congressional committees - by challenges that hinge on the increasingly prevalent position that all of these companies are acting in ways that are anti-competitive.


• The Washington Post reports that Amazon has begun outsourcing skills for its Alexa-powered smart speaker system to the general public.

According to the Post, “Amazon made its Alexa Answers program available to the general public this week after several months of beta testing, opening up its artificial-intelligence assistant to crowdsourced recommendations for unprogrammed questions.

“The process is relatively simple. Anyone can go to the Alexa Answers site, where questions frequently posed to the smart assistant are published in under 300 characters. The answers — which do not require a citation — are fed into Alexa’s algorithms. The responses are rated by other Alexa Answers users via a star system on the site, and by Alexa users via a ‘Did that answer your question?’ audio prompt.”

The story makes a fair observation - that in addition to being a way to make Alexa smarter, it also is a way to perhaps assuage folks concerned that Alexa has taken on a kind of Big Brother quality, listening to conversations into which it has not been invited. This makes it all seem more collaborative and collegial.

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FastNewsBeat

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

• Kroger last week announced that Dallas, Texas, will be the site of its fifth planned robotic warehouse - or Customer Fulfillment Center - being built in conjunction with Ocado.

The announcement says that “Kroger has committed to building up to 20 CFCs, powered by Ocado, to accelerate its ability to provide customers with anything, anytime, anywhere. The CFC model – an automated warehouse facility with digital and robotic capabilities, also known as a "shed" – will be replicated to serve customers across America. In June, Kroger broke ground on its first CFC in Monroe, OH and in July, broke ground on its second CFC in Groveland, FL. Kroger has also announced plans to build CFCs in Forest Park, GA and in the Mid-Atlantic region.”

At the same time, the Cincinnati Business Courier quotes Kroger CEO Rodney McMullen as saying that he expects it to take 2-3 years for each of the robotic warehouses to become profitable.


• Target this week is rolling out “eggs, milk and even beet hummus and avocado toast salad under a new label that will become its flagship food brand,” as it introduced more than 600 SKUs that are part of its new Good & Gather food and beverage brand in all of its 1,800-plus US locations, USA Today writes.

According to the story, “By the end of 2020, the brand will include more than 2,000 products and will be Target’s largest store brand launch, said Stephanie Lundquist, a Target executive vice president and president of food and beverage. The move is part of the company's business strategy to increase sales and distinguish the retailer from its rivals.”

The increased emphasis on private brands by retailers, which is in synch with a greater reliance on them by consumers, is seen in this story. Proprietary brands can be a strong differentiator, and there’s no question in my mind that these days, retailers are most likely to find success in the products and services where they are different from, instead of similar to, the competition.


Variety reports on the shutting down of theatre subscription service MoviePass.

The story says that the service had become financially unsustainable, though management continues to seek “financing to fund its operations.” For the time being, however, they are refunding members for service they’ve paid for that will not be available.

MoviePass allowed members to pay a set fee to get into a number of theaters - at first, to see one movie a day for an entire month, and then, when that became unviable, three movies a month.

The shutdown may be the least of the owners’ problems, since they also are being investigated “by the New York Attorney General, which is looking into whether the company misled investors. The company also is the target of a class-action lawsuit by MoviePass subscribers claiming the change in the ‘unlimited’ plan was a deceptive ‘bait-and-switch’ tactic.”


• The Associated Press reports on a convenience store in Greenwood, Mississippi, where ownership has gotten some notoriety after banning some customers from entering the store.

The reason: they apparently smell bad. Really, really bad.

The story says that “Anurag Randive, who manages the Greenwood store, says the sign was posted about three months ago after customers complained about the odor of employees from the Express Grain oil mill across the street … Randive says he hasn’t received any complaints.”

Man, that’s gotta be a tough day when the owner of a c-store says that you stink too bad to enter.

Your Views: Bunk

Weighing in on the open carry debate, one MNB reader wrote:

Living in Missouri I must say how disappointed I am in our state legislature. Several years ago they passed the law that openly carry weapons is lawful. (We already had a concealed carry law on the books, which I am fine with) All that does is push retailers to enforce their own set of rules, and potentially run customers off. At the very least it puts them in a bad spot.

I own guns, so I am not a gun hater. What I am is a hater of legislators who pander for votes. Passing laws without  thinking about unintended consequences is not real forward thinking. In today's world, allowing people to carry weapons like it is the wild west will have consequences. Intended or unintended.




Responding to the Whole Foods survey concluding that millennials are willing to spend more for food, MNB reader Mark Boyer wrote:

What consumers say in response to a research questionnaire and what they actually do is too often not the same. Is sometimes better to measure actual behavior.

And from another reader:

This survey is bunk. Nobody wants to pay more especially Millennials since most don’t have money and some who are still living at home don’t pay the grocery bill. As for Organics, everyone is buying more since they are more readily available in all stores. Whole Foods / Amazon relationship has not made the chain better. If anything, it’s made us realize that the other chains have become better offering the same for less!



And, on another subject, from MNB reader Tom Murphy:

I have enjoyed reading of your BOPIS experience at Walmart and the related comments and experiences from your readers.

I was intrigued by one reader who thought that maybe the Norwalk, Connecticut, store catered more to a customer base of in-store shoppers…surmising that this might be why the poor service and obvious lack of investment in pick-up services/experiences. It reminds me of my father’s words when I was in high school sports, “if you are going to do it, do it right or don’t do it at all”. In fact, it reminds me of why I won’t drive certain American brand cars, I always figured if they couldn’t make the marks on the heater knob line up with one of the settings, it was unlikely they could do the major things right…like engineering a reliable engine! Sort of the automaker equivalent of dirty bathrooms in a grocery store!

So in short, Walmart (and other retailers), do it right, or don’t do it at all! And that is an Eye-Opener!

From The MNB Sports Desk

In Week Two of National Football leAgue action…

Arizona 17
Baltimore 23

LA Chargers 10
Detroit 13

Kansas City 28
Oakland 10

New Orleans 9
LA Rams 27

Chicago 16
Denver 14

Philadelphia 20
Atlanta 24

Indianapolis 19
Tennessee 17

San Francisco 41
Cincinnati 17

Jacksonville 12
Houston 13

Minnesota 16
Green Bay 21

Dallas 31
Washington 21

Seattle 28
Pittsburgh 26

Buffalo 28
NY Giants 14

New England 43
Miami 0

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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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Inside LL Bean’s Disruptive Leadership Model: A Retail Tomorrow Podcast

This special podcast, recorded in front of a live audience at the recent Retail Tomorrow Immersion conference in Boston, goes inside the evolving world of LL Bean, the iconic catalog business that has engineered a dramatic and highly successful shift into omnichannel retailing through transformational leadership and a willingness to disrupt from within.

Our special guest is CEO Stephen Smith, the first outsider to ever run the company, who offered a unique perspective on how a legacy retailer - founded in 1912 - has been transformed into a model of 21st century marketing savvy.

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

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

This edition of the Retail Tomorrow podcast is brought to you by the Global Market Development Center (GMDC), connecting people & companies to opportunities for growth.

Pictured, left to right: Kevin Coupe, Stephen Smith






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