Walmart Shoppers & Drive-Thru Culture

The New York Times: “A personal shopper is something you might expect at Bergdorf Goodman or a boutique on Madison Avenue. Not at the Walmart on Route 42 in Turnersville, N.J. But that’s where you will find Joann Joseph and a team of Walmart workers each day, filling up shopping carts with boxes of Honeycomb cereal, Cheez-Its and salted peanuts. The customers select their groceries online, and then the shoppers pick the items off the store shelves and deliver them to people when they arrive in the parking lot. Customers never have to step inside the store.”

“Walmart, which is one of the largest food retailers in the United States, sees grocery pickup as a way to marry its e-commerce business with its gigantic network of stores — a goal that has eluded many other retailers. The company started ramping up the service two years ago, and it is now available in about 1,000 of Walmart’s 4,699 stores across the country … Walmart is betting big on the millions of Americans in suburban and rural areas who drive everywhere. The company is trying to make ordering groceries online and then picking them up in your car as seamless as a fast-food drive-through.”

“Walmart is also showering grocery pickup customers with perks — Easter eggs hidden in grocery bags, a “beauty box” for moms at Mother’s Day, dog biscuits and discounts for recruiting new customers. It’s unclear how the company will be able maintain this kind of dedicated service if a store is inundated with pickup orders, which in many stores are free of charge and require an order of $30 or more. Walmart said it had hired thousands of workers to staff the new service across its many stores.”

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Beer Yourself: Self-Serve Suds

The Wall Street Journal: “When customers make their way to the Williamsburg location of Randolph Beer, a brew-centric bar, they will find an impressive 24 choices on draft, from pale ales to stouts to a seasonal Oktoberfest offering. But if they want to do any drinking at the Brooklyn spot, they will have to work the taps themselves sans bartender. As a sign says, ‘Beer Yourself.’The self-serve aspect is actually a selling point for craft-beer buffs. They say they appreciate not only the sheer novelty of it, but also that they can sample new and unusual brews without having to commit to a full pint.”

“The beer is priced by the ounce, from 50 cents for some of Randolph’s house-made brews to slightly above $3 for extremely hard-to-find varieties. Customers are given a ‘beer ATM card,’ as it has sometimes been described, that records all their pours.” A happy customer comments: “You can try a dozen different beers in a night and only spend $30. It’s amazing.”

Self-serve “can bring down costs—not only in terms of needing fewer bartenders, but also in terms of eliminating waste. In most drinking spots, it is a given that bartenders will ‘overpour, either by accident or because they offer customers the occasional freebie.” Yet, not everybody loves the idea: “At some bars, the interaction between customers and bartender is just as important as the drinking itself.” Jeff Isaacson of Ark Restaurants explains: “When you’re getting your own beer and not talking to anybody, you might as well stay home.”

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How Whole Foods Steals Walmart Shoppers

Business Insider: “When Amazon’s acquisition of Whole Foods formally went through in August, the e-commerce giant immediately made some changes — most notably, significant price cuts … The biggest source of foot traffic for Whole Foods were regular Walmart shoppers. People who visited Walmart at least twice a month accounted for 24% of new Whole Foods customers the week of the price cuts.”

“Across the board, the customers who defected to Whole Foods from grocery rivals were wealthier than the retailers’ average shopper … Walmart’s regular customers’ average income is $59,264, according to Thasos data; the average income of a regular Walmart customer that is defecting to Whole Foods, however, is $71,697 … While Walmart has aimed for more aspirational customers as Whole Foods cuts prices, Thasos data proves that both retailers are competing for the same shopper: the upper-middle class customer who is increasingly important as wages stagnate for much of the US.”

“All of this means that wealthier shoppers are increasingly influential, forcing bargain-centric retailers like Walmart to expand into more aspirational brands … Walmart is gearing up to cash in on wealthier customers, especially as it expands its e-commerce lines. Whole Foods winning over high-income customers could force Walmart on the offensive in this battle — one that both retailers are determined to win.”

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Breath Mints as ‘Social Currency’

The Wall Street Journal: “For makers of breath-freshening mints and gum, there is no such thing as over-sharing. From big candy companies to small artisanal confectioners, the makers of mints are tinkering with product design, packaging, and marketing, all to encourage us to share … A mint is ‘a social currency,’ said Jeff Wurtzel, a marketing brand director for Mars Wrigley Confectionery, which makes Wrigley’s gum, Life Savers, Altoids and other breath-freshening treats. ‘You connect with someone else by offering something small’.”

“This year, the company plans to launch Extra Chewy Mints, which will come in a plastic package with an opening designed for easy sharing … In the early 1900s, Altoids were packaged in a tin to keep the mints fresh, according to Mr. Wurtzel. But the container turned out to have unexpected sociable benefits. ‘It’s literally in your hand and it’s an extension of you when you open it,’ Mr. Wurtzel said of the Altoids tin.”

“Mints can play a communal role in offices and restaurants. At the Minneapolis location of Industrious Office, a co-working space, the community manager, Marie Adrian, keeps a bowl of individually wrapped mint Life Savers on her desk. The mints have become a post-lunch routine for many people, creating a natural ‘touchpoint’ with the space’s members, Ms. Adrian said … All that sharing doesn’t just spark sociability. It means more business for Tic Tac and other mint makers.” Todd Midura, the vice president of marketing of Tic Tac North America, comments: “If you’ve got people sharing, it adds more occasions.Before you know it, you pass around that pack and it’s empty.”

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Crocs: A Divisive Shoe for Divided Times?

The Washington Post: “Crocs, perhaps the most polarizing shoe of our time, is making a comeback. The company’s signature foam clog fell out of favor a decade ago, but now it is a star reborn on Twitter and beyond: On the runway, in the pages of Vogue and on feet of people who feel a little funny about it but can no longer resist.”

“The turnaround is no accident, analysts say, but rather the result of four years of strategic changes, following a $200 million investment by private-equity giant Blackstone Group in 2013. Since then, Crocs has closed hundreds of under performing stores, done away with unpopular styles and shifted its focus back to its classic foam clog, which sells for about $35 and accounts for nearly half of the company’s sales.”

“Crocs now come covered in glitter and emblazoned with Minnie Mouse, Spider-Man and Batman. The company — which markets its shoes as slip-resistant and easy to clean — has also found a niche among medical and restaurant workers. Its Bistro line, for example, includes clogs covered with eggs and bacon, sushi and chili peppers … Company executives recently began noticing that people were buying a dozen pairs of clogs at a time, all in the same color. It turned out, they said, that high school and college sporting teams were buying them to wear before and after competitions. Many of those students had worn Crocs as children, and were now rediscovering them.”

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Cake Ladies: Inside The Box Thinking

The New York Times: “Elsewhere, the American appetite for packaged baking mixes is waning, according to the market research firm Mintel, as consumers move away from packaged foods with artificial ingredients and buy more from in-store bakeries and specialty pastry shops. Yet in the small, mostly indigenous communities that dot rural Alaska, box cake is a stalwart staple, the star of every community dessert table and a potent fund-raising tool.”

“The offerings in village stores often resemble those in the mini-marts or bodegas of America’s urban food deserts, at two and three times the price. Food journeys in via jet, small plane and barge. Milk and eggs spoil fast. Produce gets roughed up. Among the Hostess doughnuts, Spam and soda, cake mix is one of the few items on shelves everywhere that require actual cooking. As a result, tricking out mixes has become a cottage industry, and many villages have a ‘cake lady’ with her signature twist. Some bake as a hobby, while others do a brisk business selling cakes in places where getting to a bakery requires a plane ticket.”

“In America’s northernmost town, Utqiagvik (formerly known as Barrow), the baker Mary Patkotak is an expert at gaming cake economics. She uses Betty Crocker triple chocolate fudge mix for her famous cherry-chocolate cake. In the village store, it costs $4.59 a box. On Amazon, where Ms. Patkotak orders it, it’s $1.29. Alaska’s many weather delays mean the mix never shows up on time, but she doesn’t care because it qualifies her for partial refunds on her annual Prime membership.
‘I can’t remember the last time I paid the Amazon Prime fee,’ she said.”

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Strategic Selection: Less is More for Aldi

The Wall Street Journal: “German discounter Aldi, is betting billions it can win over spoiled American shoppers. How? By offering them fewer choices—way fewer—than rival retailers. The unlikely proposition has worked nearly everywhere Aldi has set foot … It offers a deliberately pared-down selection, sometimes a tiny fraction of the number of items sold by rivals, which helps Aldi cut costs to levels U.S. grocers can only dream of. Among other benefits, fewer items means faster turnover, smaller stores, less rent, lower energy costs and fewer staff to stock the shelves.”

“About 70 years ago, brothers Karl and Theo Albrecht, fresh from military service in World War II, took over their family’s store in Schonnebeck, a mining neighborhood of the bombed-out industrial city of Essen. In the early 1950s, they began rolling out their ascetic concept to other branches throughout the region. Back then, their stores offered just 250 items, the essentials miners’ and steelworkers’ families needed to survive—flour, sugar, coffee, butter, bacon, peas and condensed milk. In the 1950s and ’60s, Germany’s economic miracle took off, and a wave of glitzy supermarkets selling thousands of items sprouted up to serve the newly affluent middle class. Aldi didn’t flinch.”

Today: “Aldi is gambling it is more in tune with the American tastes, rolling out small, nimble stores instead of sprawling warehouses and supermarkets that take longer to navigate … One of Aldi’s strengths that has eluded many discounters is its ability to draw middle-class shoppers—those with more money to spend—despite its limited array of goods. It did this by cultivating the image of a company focused on quality rather than pinching pennies … There too, executives say, the limited assortment played a central role. The small number of items ensured that staff could carefully choose, taste-test and quality-control each item.”

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Public Hotel: Ian Shraeger’s Airbnb Killer?

The Wall Street Journal: “Stroll into Public, a full-service, 367-room hotel that opened this summer on Manhattan’s Lower East Side, and it quickly becomes apparent that certain features are nowhere to be found … Guests check in via a series of self-service tablets along a wall, where they can find their reservations, create their own room keys and proceed up an elevator to their rooms. If questions arise, they’re answered by a handful of roving, jack-of-all-trades staffers known as ‘Public advisors’.”

“These cost-cutting efficiencies are all part of an attempt by Ian Schrager, the veteran hotelier and night life impresario who owns Public, to fight back against Airbnb Inc. on behalf of the hotel industry, which he believes hasn’t properly assessed the challenge posed by the tech upstart … he aims to better compete with Airbnb on nightly rates and offer superior amenities such as bars and other places to socialize … Mr. Schrager’s new concept fuses a sprawling bar and restaurant operation onto the property, deriving revenue and profits from amenities that are meant to attract a much larger crowd than just the hotel’s guests.”

“Bjorn Hanson, a clinical professor at New York University’s hospitality program, said Mr. Schrager’s concept flips the traditional role of food and beverage in hotels. Rather than being a less-profitable service that a hotel must provide as an amenity to guests, Public’s food-and-beverage offerings are meant to be a centerpiece that can ultimately drive more room occupancy, he said … The hotel’s rates officially start at $150 and increase during high-demand times, such as fashion week. In early August, rates started at $250, with some last-minute online rates as low as $180—well below the rates of upscale, full-service Manhattan hotels, which typically range higher than $500.”

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Late & Great: Lotfi Zadeh

The New York Times: “Lotfi Zadeh, the computer scientist and electrical engineer whose theories of “fuzzy logic” rippled across academia and industry, influencing everything from linguistics, economics and medicine to air-conditioners, vacuum cleaners and rice cookers, died on Wednesday at his home in Berkeley, Calif. He was 96 … Emerging from an academic paper Mr. Zadeh published in 1965 as a professor at the University of California, Berkeley, ‘fuzzy logic,’ as he called it, was an ambitious effort to close the gap between mathematics and the intuitive way that humans talk, think and interact with the world.”

“If someone asks you to identify ‘a very tall man,’ for instance, you can easily do so — even if you are not given a specific height. Similarly, you can balance a broom handle on your finger without calculating how far it can lean in one direction without toppling over … Rather than creating strict boundaries for real world concepts, he made the boundaries ‘fuzzy.’ Something was not in or out, for example. It sat somewhere on the continuum between in and out, and at any given moment a set of more complex rules defined inclusion.”

Fuzzy logic “could provide a way for insurance companies to assess damage after an earthquake, for instance. Is the damage serious, moderate or minimal under company rules? Fuzzy sets could help … The method could also help build machinery and electronics that gradually move from one state to another, like an automobile transmission, which shifts smoothly from first gear to second, or a thermostat, which flows just as smoothly from hot to cold. Hot and cold need not be precisely defined. They could exist on a continuum.”

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Perennial Seller: Make Connections, Not News

The Wall Street Journal: In Perennial Seller, Ryan Holiday “emphasizes the value of low prices and word of mouth over press coverage. Raymond Chandler, he writes, became the ‘quintessential detective author’ because he encouraged his publishers to sell his books as pulp paperbacks, for 25 cents a copy. Suddenly his books went from selling a few thousand copies in bookstores to hundreds of thousands in gas stations, train stations and cigar stores. Humphrey Bogart as Philip Marlowe followed.”

“Likewise, the comedian Drew Carey’s long run on network television began with an invitation from Johnny Carson to appear on “The Tonight Show.” Validation by one person whose opinion is valued, Mr. Holiday argues, is worth all the press coverage in the world.”

“Iron Maiden has never relied on hit singles or frequent radio play, since its songs often run to 10 minutes, with solos from each of its three guitarists. Instead, the band has toured almost nonstop, building close connections with thousands of fans who now buy almost anything it puts out, from albums to beer to belt buckles. Its core of hard-core fans, Mr. Holiday writes, has allowed Iron Maiden to ‘endure through fads, technological shifts, and the fact that their music was never mainstream’.”

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