Online Feels ‘Off’ to Most Shoppers

Supermarket News: “Going by the trends in retail grocery, online ordering of groceries and meal kits likely stand near the top. But by the numbers, the vast majority of Americans are doing neither, a new Gallup poll finds. Of 1,033 U.S. adults surveyed, 84% said they never order groceries online and 89% never order meal kits, according to Gallup, which released the study results this week.”

“The small percentage of consumers that do order groceries or meal kits online don’t do it very often. Just 11% reported they order groceries online for pickup or delivery twice a month or less, and 4% said they do so once a week or more. Meanwhile, 9% of respondents order meal kits for home delivery two times monthly or less, and only 1% do so once weekly or more.”

Lydia Saad of Gallup comments: “Services like PeaPod, Instacart, Shipt and Amazon Fresh that cut out the trip to the grocery store appeal mainly to those short on time: parents with children younger than age 18 and employed adults. Higher-income Americans are also bigger adopters of grocery delivery, either because higher income means they can afford more groceries or they have greater access to mobile technology like smartphones and tablets that make ordering online easier.”

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The Price is Right — Or is It?

The Wall Street Journal: “A simple mathematical error leads shoppers to make mistakes when evaluating offers that promise to save them money. Sometimes they inadvertently pick the priciest option. Sometimes they overestimate the benefit of a bargain. And sometimes they don’t recognize that competing promotions offer identical savings. The problem involves percentages.”

“Instead of comparing unit prices, shoppers tend to judge offers based on the size of the benefit. Getting 50% more of a product must be better than knocking 33% off its cost, right? Wrong. The savings are identical, but on the fly, even savvy shoppers make mistakes … Consider a pound of coffee beans that normally costs $15. If a shopper receives 50% more free, the price is $5 for each half-pound. A discount of 33% reduces the original cost to $10, which is also $5 per half-pound.”

“One of the most common ploys used to sway consumers is the double discount. A 40% discount on a $1,000 suit drops the price to $600. Marking the suit down twice, first by 20% and then by an additional 25% decreases the cost to $800 before shrinking it to $600. The deals are identical, but the double discount feels more generous … To test responses to offers of discounts or bonuses along with shoppers’ ability (or willingness) to calculate percentage change, .. several experiments revealed that consumers generally favor product bonuses over price discounts, reduced quantities over increased prices and double discounts over single discounts.”

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Yes, The Cow Had a Name: Dinner

The Wall Street Journal: “The menu at chef José Andrés’s Bazaar Meat in Las Vegas notes that its Vaca Vieja steak is made from a “hand-selected working cow.” The beef comes from a meat company called Mindful Meats, where, on the cow’s ‘final day,’ employees ‘look each cow in the eye and say thank you as they load onto the trailer,’ its website explains. Welcome to the final frontier in the discussion about transparency in food: meat … The challenge for restaurants and food providers is to give information without turning stomachs.”

“It’s a fine line between transparency and oversharing. At Blackbelly Restaurant in Boulder, Colo., servers are coached to let customers take the lead in discussing the provenance of the meat, says chef and owner Hosea Rosenberg. On a typical evening, about one-third of customers will want to order without much discussion, says Mr. Rosenberg. Another third is interested in more specifics—like cuts of meat, or particular breeds of animals—before their eyes glaze over, he says. The last third is interested in even more details, such as types of grasses or grains the cow was fed, what it weighed, and what farm it was from. Sometimes they ask if it had a name. (‘We named it Dinner,’ he says).”

“Randy Golding, a retired chemical engineer in Cedar City, Utah, orders steaks, chicken and ground beef every three months from Firefly Farms in North Stonington, Conn. He says he has spoken directly with the farm manager, Dugan Tillman-Brown, for at least an hour, asking questions such as how the animals were treated (‘They have names. They have personalities,’ says Mr. Tillman-Brown) to how they are slaughtered (a quick shot to the head with a steel bolt) … Mr. Golding says those details help him and his wife, Lisa, feel better about eating meat knowing the animal wasn’t mistreated. “

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ConAgra: Fresh in Frozen

The Wall Street Journal: “Last year, Conagra freshened up of three of its frozen brands: Healthy Choice, Marie Callender’s and Banquet. Healthy Choice, a diet brand launched in 1989, rolled out new microwavable meal bowls with trendy ingredients like edamame, kale and quinoa, and exotic flavors like Cuban pork and Korean beef. Banquet, a value-oriented brand with frozen basics like chicken fingers and meatloaf that typically sell for around $1 each, also got an upgrade, including Buffalo Chicken Mac ‘N Cheese bowls that sell for $2 or more.”

“The results have been clear. Comparable sales for Conagra’s refrigerated and frozen-food segment went from declining sharply last fiscal year to rising for three quarters in a row, reaching 2.6% growth in the quarter ended Feb. 25. Conagra Chief Executive Sean Connolly summed up his approach at a Goldman Sachs conference in May: ‘When you take legacy, well-known brands and bring modern elements into the food and packaging, you will have a winner’.”

“Consumers are shying away from carbohydrates and processed foods, preferring fresh meat and vegetables. But these take more effort to cook and can look less than fresh by the end of the week. For busy, health-conscious families, picking up proteins and vegetables from the freezer aisle makes sense. Perceptions of the health properties of frozen vegetables have also improved after studies showed they can retain nutrients better than vegetables that have sat for days in delivery trucks or grocery shelves.”

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Decibel Diet: Loud Music is Fattening

The New York Times: “Behavioral scientists who ran a series of lab studies and real-life field experiments found participants selected more unhealthful or calorie-laden items like red meat and cake when the ambient music was loud, and were more likely to choose healthful items when softer music was played in the background. The genre of music did not appear to influence the choices, the researchers said: They found the same effects whether the background music was classical; a mix of pop, rock, soul, R&B and alternative music; or heavy metal.”

Dipayan Biswas, a professor of business and of marketing at University of South Florida in Tampa and lead author of the paper, comments: “High-volume music is more exciting and makes you physically more excited, less inhibited and more likely to choose something indulgent. Low music makes us more relaxed and more mindful, and more likely to go for the things that are good for us in the long run.”

“Loud background music in a supermarket similarly nudged customers toward less healthful purchases, compared with softer music … Dr. Biswas, whose earlier research found that patrons are more likely to order healthful items when restaurants are brightly lit and more likely to indulge in dimly lit restaurants, said the findings can help consumers be aware of unconscious factors affecting their choices.”

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Retail Math: Ladder of Causation

The Wall Street Journal: “Suppose, for example, that a drugstore decides to entrust its pricing to a machine learning program that we’ll call Charlie. The program reviews the store’s records and sees that past variations of the price of toothpaste haven’t correlated with changes in sales volume. So Charlie recommends raising the price to generate more revenue. A month later, the sales of toothpaste have dropped—along with dental floss, cookies and other items. Where did Charlie go wrong?”

“Charlie didn’t understand that the previous (human) manager varied prices only when the competition did. When Charlie unilaterally raised the price, dentally price-conscious customers took their business elsewhere. The example shows that historical data alone tells us nothing about causes—and that the direction of causation is crucial.”

“Machine-learning systems have made astounding progress at analyzing data patterns, but that is the low-hanging fruit of artificial intelligence. To reach the higher fruit, AI needs a ladder, which we call the Ladder of Causation … To reach the higher rungs, in place of ever-more data, machines need a model of the underlying causal factors—essentially, a mathematics of cause and effect.”

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Ordering Anxiety: The High Stress of Fast Food

The Wall Street Journal: “As menu choices multiply—and multiply and multiply—diners are suffering from option paralysis. Especially troublesome are assembly-line-style chains in “fast casual” restaurants where diners have just seconds to answer rapid-fire questions such as whether they want tahini or aioli sauce on their chicken shawarma, or prefer the turmeric almonds or pickled ginger on their beet falafel bowl.”

“People who get nervous at the counter say they worry about being judged for stumbling through their order, or feel pressured by having customers waiting behind them in line. They fret that their food will come out wrong, or that if they try something new they won’t like it. Others simply buckle under the pressure of too many choices. Sarah Anderson hates it when she gets to a restaurant counter thinking she knows what she wants, only to be asked ‘like 20 questions’ … Restaurant executives know this. They feel it themselves, sometimes.” Scott Gladstone, vice president of strategy at Applebee’s, admits: “I usually end up finding one thing on the menu I like and order it every time, because of the anxiety of the ordering process.”

“So, why do restaurant chains offer so many choices? Tom Ryan, the founder and chief executive of Smashburger, says if he didn’t, he would lose customers who yearn for new experiences.”

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Short Staff + Long Lines = Retail Meltdown

The Wall Street Journal: “Over the past 12 months, 86% of U.S. consumers say they have left a store due to long lines, according to a survey conducted by Adyen, a credit-card processor and payment system. That has resulted in $37.7 billion in lost sales for retailers, Adyen estimates.”

“Retailers typically set staffing as a percent of sales, but a growing body of research suggests it should be based on foot traffic. The problem is twofold: Many retailers don’t track traffic and even if they do, they are reluctant to add labor, which is already among their biggest costs.”

“After installing cameras last year, Cycle Gear Inc., a 130-store chain that sells motorcycle apparel and accessories, noticed sales dipped during the afternoon at its Orlando, Fla., store even though it was packed with shoppers. ‘That told us the salespeople were overwhelmed,’ said Rodger O’Keefe, a vice president. ‘We added two more salespeople during those hours, and sales have been up since then’.”

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Dept. of Social: Community Shopping

The Wall Street Journal: “Going to a department store might seem like simply shopping, but it’s also a chance to practice civil behavior, to appreciate beautiful things, to feel a connection to others. In the 1970s, Bloomingdale’s was considered a New York City attraction on par with the Metropolitan Museum of Art, which, according to Robert Hendrickson, author of ‘The Grand Emporiums,’ was Bloomie’s only real competition when it came to meeting a possible romantic partner.”

“Last spring, inspired by memories of the excitement of shopping in New York in the 1980s, Bergdorf Goodman’s fashion director Linda Fargo opened Linda’s at BG, an in-store boutique stocked with her personal picks in everything from high heels to Squirrel nuts. ‘Online is efficient,’ Ms. Fargo said, ‘but nothing can replace touching things, looking in people’s faces. Sensuality—that’s what we can offer people’ … Nordstrom executives appeared to be thinking along similar lines in 2013 when they hired Olivia Kim, formerly of New York-based Opening Ceremony, to make the store more relevant to younger customers.”

“As Nordstrom’s vice president of creative projects, Ms. Kim has initiated a series of pop-up boutiques and brought in buzzy, Instagram-friendly designers like Marine Serre and Jacquemus. But her proudest achievement, she said, is seeing Nordstrom used as a hangout space by customers: ‘Not everything needs to be transactional. I’m more interested in that they’ve learned something, that they feel energized and excited’ … As Harry Gordon Selfridge, founder of Selfridges, once said, ‘a store should be a social center.’ Department stores are taking note.”

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We Never Close: 24/7 Adventures

The Wall Street Journal: “Apparently short of actual adventures, teens and 20-somethings are sneaking into chain stores and restaurants, including McDonald’s, Walmart , Chuck E. Cheese’s and IKEA, staying all night and posting videos online as evidence. A YouTube search for 24-hour overnight challenges turns up 1.6 million results. A closer examination of the phenomenon reveals something thrill-seekers didn’t expect—spending extended periods inside an empty chain store can be really, really dull.”

“The craze appears to go back to 2016, when Belgian youngsters hid inside an IKEA after it closed and then posted the video online. The fad soon spread to the U.K., where a boy slept overnight in an IKEA furniture store, worrying his family, who didn’t know where he was … Indiana college student Christian Perry said he was determined to finish the challenge at a Walmart Supercenter, however dull things got. Last May, he and a friend decided to spend a full 48 hours in one of the stores in Indianapolis. The Walmart is open around the clock. The pair needed a secret place to slumber and a way to stay sane.”

“Just minutes into the outing, Mr. Perry, who is 21 and studying computer science, realized he couldn’t bear Walmart’s music and needed a distraction. ‘I started reading labels after that,’ he said … The 13-minute video the friends posted on YouTube shows highlights of their itinerary. They looked at fish in the aquarium section. They read magazines, played games at the arcade and dribbled balls in the sports aisle … After hunkering down in the toilet-paper section the second night, the duo quietly slipped home. ‘It was one of the worst experiences of my life,’ Mr. Perry said.”

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