The Walmart Goliath

Quartz: “Walmart isn’t a unicorn, and it’s no longer sexy. But it is massive. With $482 billion in revenue, it sells more than Apple, Amazon and Microsoft put together, according to Fortune’s annual ranking of companies by revenue … It’s bigger than the No. 2 company, Exxon Mobil, and No. 3, Apple, combined. Its sales are greater than the GDP of Poland.”

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“The future of shopping may be online, with goods delivered via self-driving cars and drones. But will be a long time before anyone topples the Walmart goliath.”

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Quote of the Day: Tim Berners-Lee

“Ad revenue is the only model for too many people on the web now. People assume today’s consumer has to make a deal with a marketing machine to get stuff for ‘free,’ even if they’re horrified by what happens with their data. Imagine a world where paying for things was easy on both sides.” ~ Tim Berners-Lee, creator of The World Wide Web, quoted in The New York Times.

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Birchbox Unboxes An In-Box Experience

Bloomberg Business: “Birchbox is famous for cutesy cardboard boxes filled with delicate tissue paper and diminutive samples, the stars of countless unboxing videos on YouTube. But that may not be enough anymore … As it seeks a bigger slice of America’s $16 billion prestige beauty industry, Birchbox is struggling to become a full-spectrum retailer rather than just a precious peddler of monthly subscription boxes … The company is looking for an identity somewhere between the online box business and the retail store, a hybrid that can do battle with traditional beauty retailers and the horde of rival beauty boxes.”

Birchbox’s “New York store is a two-story smorgasbord of beauty products … The goods here are organized by type, not brand, unlike traditional cosmetics areas in department stores and even pharmacy chains. The format encourages shoppers to discover new labels, just as the sample boxes are meant to do. Down the light wooden stairs sits the men’s grooming section, a segment Birchbox added four years ago and a testament to its willingness to seek out new customers and one day become a multibillion-dollar brand.”

“Birchbox is still fighting to be profitable, and it hasn’t received new outside funding since a $60 million round in 2014 … Meanwhile, the move to stores has raised doubts among industry observers about the company’s devotion to the sample box. The very existence of Birchbox’s stores goes against its original pitch as the first beauty seller to do online right.” Co-founder Katia Beauchamp comments: “We really want to change the potential customer for the beauty industry. We want to change her relationship with beauty. She doesn’t have to have this boring, errand, I-have-to-do-this experience.”

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Chick-fil-App: No More Waiting in Line

Business Insider: “Chick-fil-A is rolling out a new app that will let customers avoid waiting in line at the register. The app, called Chick-fil-A One, will allow customers to order and pay for their food in advance, then pick it up at a counter designated for online orders. The app will also allow users to customize and save their favorite orders. Michael Lage, a veteran of Facebook and Google who helped develop the app, says it will change how customers, particularly parents with young children, experience and interact with Chick-fil-A.”

“To celebrate the launch of the app, Chick-fil-A is giving away free chicken sandwiches to everyone who downloads it between June 1 and June 11 … The app will continue to give away free food beyond the launch through its built-in rewards program, which will randomly send customers free-food offers based on what they typically order.”

“When customers get free treats from Chick-fil-A, they will have the opportunity to rate them. Those ratings will be factored into the app’s future free-food offers. Customers will typically get a choice of several items for their free-food offers. For example, they will be allowed to choose among a free drink, dessert, or medium fry. ‘We want to make sure the experience is based on personalization and choice,’ Lage said.”

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Consignment Retail: What’s Old Is New Again

The New York Times: “Clothing resellers like Material Wrld, Crossroads and thredUP propose to make ‘refreshing’ your wardrobe more joyful, with their own trade-in kits and cash incentives to shop their wares to keep the cycle going. Ethical elimination is a theme (a corollary to ethical consumption). The manifesto of Crossroads, a favorite of college students who worry that their Urban Outfitter discards may end up in a landfill, is that ‘fashion shouldn’t come at a cost.’ Material Wrld aims to alleviate ‘fashion guilt’ with its own promise: ‘We’ll handle yesterday’s fashion so you can focus on tomorrow’.”

“Tradesy is like a dating site for your old clothes: You can post a photo, tell its story and the site will price your garment (a button invites online shoppers to ‘love’ your listings). Move Loot will do the same for your furniture; if a piece sells, the company will handle the exchange and arrange for pickup. So will Lofty, Chairish and Viyet, which sell high-end furniture, decorative items and artwork; curators from Lofty and Viyet will vet your items in your home. The luxury site the RealReal, a favorite of fashion-conscious New Yorkers, trades in artwork, designer clothing and jewelry.”

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TJ Maxx Defies E-Commerce Trends

The Washington Post: The success of TJ Maxx “offers some insight about what is — and isn’t — proving enticing to customers in the current shopping environment. For starters, TJX’s strength is evidence that the recent woes of traditional retailers can not simply be chalked up to the rise of online shopping. Marshalls has no e-commerce offering at all, nor does HomeGoods, another fast-growing TJX-owned chain … T.J. Maxx, Marshalls and HomeGoods offer hard-to-ignore evidence that customers are still plenty eager to shop in physical stores if the merchandise, price and service are on point.”

“The booming sales at TJX also underscore the extent to which shoppers generally are embracing off-price shopping, with its promise of name brands at low prices and a treasure hunt-like shopping experience … So far, TJX’s strategy is proving quite productive, with research firm eMarketer estimating that its stores generate about $309 in sales per square foot.”

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Half of Americans Fear Shopping Online

Boing Boing: “A study by the Department of Commerce’s National Telecommunications and Information Administration found that half of American Internet users are ‘deterred’ from engaging in online transactions because of fears over privacy and security breaches … The survey’s respondents cited the risk of identity theft as their main source of anxiety, followed by privacy concerns over data collection by online services and the US government.”

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There’s Nothing ‘Illegal’ About Retail Subscriptions

Bloomberg: “Adore Me is among a group of buzzy Internet retailers accused of sometimes placing customers into unwanted and hard-to-cancel retail subscriptions. Several of these companies have been hit with lawsuits alleging unfair business practices, including JustFab (apparel), Blue Apron (food delivery), and Birchbox (beauty samples). Adore Me is currently facing a lawsuit from a disgruntled subscriber.”

“There’s nothing illegal about retail subscriptions, of course, and many businesses with automatic renewals make the billing process crystal clear. Some services are transparent in their mission and describe themselves primarily as pay-each-month subscriptions, like razor seller Dollar Shave Club.”

“But weak and misleading disclosures are pervasive among subscription e-commerce businesses, says Francisca Allen, the deputy district attorney of California’s Santa Clara County. Allen pursued the JustFab and Stamps.com settlements, both of which included reforms to the companies’ websites. Consumers are losing tens or even hundreds of millions per year on unwanted automatic-renewal subscriptions, she says, and there’s not enough regulatory muscle to monitor and stop unfair practices.”

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Late & Great: Philip Kives

The Guardian: “The late Philip Kives is “hailed as having invented the infomercial, producing a live, five-minute TV ad for a Teflon non-stick frying pan … the format stood him in good stead when he diversified from homeware and into music in 1966 … At the time, the idea of a multi-artist compilation was a rarity, because record companies were not keen to have their artists on the same LP as artists signed to competitors.”

Few were the households in the 1970s that didn’t have some sort of K-tel release propped up beside the stereo in a manner that makes the supposed ubiquity of an act like Adele today pale in comparison … For Kives … music was just another product like the Patty Stacker, the Bottle Cutter, the Veg-o-Matic food cutter and the Miracle Brush … While artists might bristle at the idea of being sold in the same way as a tool for chopping vegetables or cleaning suede, for Kives it was still the boardwalk and he was gripped by the thrill of sell, sell, sell.”

“Today, marketing executives like to regard themselves as super-sophisticated, guiding what they do with endless data, market research and analysis; but they are still working on many of the same principles that Kives perfected half a century ago. Except he was arguably much closer to the audience, understood them better and respected them more.”

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Tractor Supply: It Has What Amazon Does Not

Forbes: “The typical Tractor Supply customer owns land, keeps pets, raises chickens and drives a pickup … Tractor Supply has approached retail’s cardinal rule of ‘Know Your Customer’ as both mission statement and math problem, and in the process has become an (albeit unlikely) lifestyle brand, famed for an in-store experience so satisfying that its rustic-chic brick-and-mortar operations are well fortified against the onslaught of consumers who want to buy everything on their smartphones.”

“Tractor Supply has 1,500 locations spread across 49 states; the company plans to open around 115 stores in 2016 and about 120 stores per year after that until 2,500 are in operation, mostly in rural or exurban areas … Roughly 15% of store merchandise is tailored to each ‘hyperlocalized’ market: One Kentucky store may cater to equestrians while another mere miles away carries products for life in coal country … the average 16,000-square-foot Tractor Supply store is manned by a team of 12 to 15 local ‘lifestylers’–the type of people who would shop at Tractor Supply even if they didn’t work there.”

The store’s “exclusive lines ensure that customers can’t find an item cheaper on Amazon … Not that Amazon is a big concern. Less than 1% of Tractor Supply’s revenue comes from e-commerce, and increasing that number isn’t a top priority. Physical stores and a deep connection to the countryside remain at the company’s core.”

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