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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CVS & The Prescription Experience

Fast Company: “With the profusion of online pharmacies, CVS realized that to give people a reason to come in, it had to design a better service. A new pill bottle system is just one piece of a larger service-design challenge … hinged upon understanding the user end-to-end, rather than one transaction at a time.”

“CVS realized that one lever it had for creating more customer loyalty was the prescription itself—and how often those prescriptions go wrong. About a third of recurring prescriptions never get filled; of those that do, about one third are forgotten after the first couple refills. CVS’s bet is that a better service can improve those figures, and, in doing so, make patients not only more healthy but better customers as well.”

“The new prescription labels are just a start for a number of things CVS has on its roadmap, including ways to bundle together medications meant to be taken at the same time and an in-home delivery service. But perhaps their most user-friendly aspiration is to redesign the role of pharmacists. Today, they typically spend most of their time counting pills … CVS is working to have better service procedures, in which the pharmacists become a front-line in talking to patients—for example, by giving every patient taking five drugs or more an automatic consultation, which includes talking them through the new prescription schedule.”

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Starbucks Shutters Digital Store

The New York Times: “As customers increasingly shift their retail shopping toward e-commerce, Starbucks is bucking the trend: It shuttered its online store … Maggie Jantzen, a company spokeswoman, said that the decision to shut down the online store was part of a push to ‘simplify’ Starbucks’ sales channels … The company’s chief executive, Kevin Johnson, spoke on Starbucks’ most recent earnings call about a ‘seismic shift’ in retailing. To survive, he said, merchants need to create unique and immersive in-store experiences.”

Starbucks chairman Howard Schultz told investors last April: “Every retailer that is going to win in this new environment must become an experiential destination. Your product and services, for the most part, cannot be available online and cannot be available on Amazon.”

“Starbucks said it would continue to sell branded products like coffee through grocery stores and some online sites managed by its sales partners. But it broke the hearts of some fans by ending retail sales of a cult-favorite product line: flavored syrups. The mixes used to concoct drinks like the Pumpkin Spice Latte are generally not for sale in the company’s stores, but Starbucks stocked them on its website … On eBay, a jug of Starbucks pumpkin spice syrup could be had on Sunday for $100.”

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Disney Brings Its ‘World’ To Retail

The New York Times: “Quietly, like a mouse on tiptoe, Disney overhauled its retail store at the Northridge Fashion Center mall in late July. Out went the twisty Pixie Path aisles, the ornate displays, the green walls and the color-changing fiberglass trees. In came a movie-theater-size screen, a simplified floor plan, white walls and more items for fashion-conscious adults … the Disney Store here was a prototype, and the company has been monitoring sales and consumer feedback as it prepares to revamp its 340-store chain.”

“The redesign makes Disney’s stores a bit more like Disney’s theme parks. For instance, daily parades at Disneyland in California and Walt Disney World in Florida will be streamed live to those colossal video screens. During the parades, store personnel will put out mats for shoppers to sit on and roll out souvenir carts stocked with cotton candy and light-up Mickey Mouse ears. The screens could easily be used to stream other events, such as red carpet arrivals for Disney movie premieres. That kind of programming could bolster foot traffic, and thus sales — while also turning the stores into a more potent promotional platform for Disney’s films, television shows and theme parks.”

“As it attempts a new mall strategy, Disney is also remaking its e-commerce operation. ShopDisney.com is replacing DisneyStore.com. The new site will have a less cluttered look and a vastly expanded assortment of designer merchandise aimed at adults (Mickey-themed Ethan Allen furniture and a $350 Siwy denim jacket with Minnie embellishments will be on offer). The site will also stock more items that previously were available only in stores inside Disney theme parks.”

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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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Retail Apocalypse: Fact or Fiction?

USA Today: “In 2017, U.S. retailers have opened, or plan to open, 1,326 more locations than they will be closing, according to IHL Group’s Debunking the Retail Apocalypse report, which was sponsored by several companies. When you add in restaurants, the increase jumps to 4,080 new openings in 2017 with another 5,050 planned in 2018. Or, to look at it another way, between chain stores and restaurants, 10,123 will close in 2017, but 14,239 will open.”

“To compile the study, IHL looked at over 1,800 retailers and restaurant chains with more than 50 U.S. locations across 10 retail vertical segments. It found that for every chain with a net closing of stores, 2.7 brick-and-mortar retailers would be posting a net gain in locations. The research firm also noted that if you add in retail chains smaller than 50 locations (including restaurants) the number of new openings in 2017 climbs to over 10,000.”

“It’s not a retail apocalypse, but how Americans shop is changing. The ease of online shopping means physical retailers need to be about more than the ability to put goods immediately into consumers’ hands. That does not mean that brick-and-mortar retail is dead or dying, it’s simply shaking out the winners and losers.”

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5 Ways Best Buy Beats Amazon

The New York Times: “Best Buy’s rebound has been surprisingly durable. Revenue figures have beaten Wall Street’s expectations in six of the last seven quarters … How do they do it?” Highlights from a conversation with Best Buy CEO Hubert Joly: 1) Price. “Price-matching costs Best Buy real money, but it also gives customers a reason to stay in the store, and avoids handing business to competitors.” 2) Humanity. “The associates in our stores are much more engaged now, much more proficient,” Mr. Joly said.

3) Showcase & Ship. “Mr. Joly realized that with some minor changes, each of Best Buy’s 1,000-plus big-box stores could ship packages to customers, serving as a mini warehouse for its surrounding area … Best Buy also struck deals with large electronics companies like Samsung, Apple and Microsoft to feature their products in branded areas within the store. Now, rather than jamming these companies’ products next to one another on shelves, Best Buy allows them to set up their own dedicated kiosks … Even Amazon has set up kiosks in Best Buy stores to show off its voice-activated Alexa gadgets.”

4) Quiet Cuts. “Under Mr. Joly, Best Buy has used the scalpel as quietly as possible … he has never announced a huge, public round of layoffs, which can crater employee morale and create a sinking-ship vibe.” 5) Luck. “It’s lucky that the products it specializes in selling, like big-screen TVs and high-end audio equipment, are big-ticket items that many customers still feel uncomfortable buying sight unseen from a website. It’s lucky that several large competitors have gone out of business, shrinking its list of rivals. And it’s lucky that the vendors who make the products it sells, like Apple and Samsung, have kept churning out expensive blockbuster gadgets.”

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Houzz & Poshmark: Killing It Against Amazon

Axios: “How can you do something different from Amazon, like having professionally-generated content? Houzz is a perfect example, offering expert-curated products and help for people looking to remodel part of their home. Amazon just isn’t geared to build that sort of community. Or a company like Poshmark, where you have lots of users sharing and selling what’s in their closet. A lot of them have become influencers because other users like their style.”

“It’s what Pinterest should have done with commerce but didn’t. Amazon sells clothes, but it sells them like it sells a PC or a phone. Fashion is about having different parts that go well together, which means curation.” [Excerpts from an interview with Venture capitalist Hans Tung]

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Stores as Experiences: Back to the Future

The Atlantic: “The funny thing about stores-as-experiences is that, even as a notion that is shaping retail’s future, it also represents a return to its past.” Tracey Deutsch, a professor of history at the University of Minnesota, comments: “Apple might be interested to know that the first post-WWII malls often used similar rhetoric about public squares. Victor Gruen, who designed Southdale (the first indoor mall) and who really created the look for many of these shopping centers, saw himself as creating new public space.” Gruen based his vision on “the ancient Greek Agora.”

“In the 19th century, the creators of early department stores, too, were attuned to the experiences of shoppers, particularly the middle- and upper-class women they catered to. Deutsch notes that these stores had cafes and tea rooms in which customers could rest, along with plenty of attendants to help carry any purchases.”

“The journalist and historian Marc Levinson offered another historical precedent for experiential retail … the Great American Tea Company, which set up a coffee-roasting plant in Manhattan’s Greenwich Village in 1865, aimed to dazzle people walking by with its sights and smells. (Levinson says the idea was inspired by the spectacle of P.T. Barnum’s nearby American Museum, which displayed live animals and freak shows.) Levinson comments: “A few years later, the company … played up its supposed connection with Chinese tea growers by painting its stores in vermillion and gold leaf, adding Chinese wall hangings and oriental lanterns, and turning the cashier’s station into a pagoda. Customers were meant to experience a bit of China as they bought their tea.”

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J. Press Store Revives Its Yalie Roots

The Wall Street Journal: Preppy clothing retailer J. Press said it is trying to ignite U.S. sales by opening a store in the Midtown Manhattan building that houses the Yale Club this October … The proximity to the Yale Club represents a homecoming of sorts for J. Press, which began by selling ties, belts and odd trousers near the school’s New Haven, Conn., campus in 1905. The brand is known in preppy circles for its embroidered collegiate logos and cocktail-themed accessories such as needlepoint martini-themed cuff links.”

“The move near the Yale Club is one of the biggest investments for the brand in a long time, according to Jun Murakami, chief executive officer of Japanese company Onward USA, whose parent owns J. Press. He added the Midtown space is expected to generate 25% of total U.S. sales. Mr. Murakami also said he forecasts 30% of J. Press’s sales will be generated online in the near future, and the company hopes to increase that number to 50% by relaunching its website and boosting its presence on social media.”

“Marshal Cohen, chief retail analyst at NPD Group, believes J. Press has a ‘tremendous opportunity’ because the brand is still strong with U.S. consumers.” He comments: “The challenge is that they’re climbing up a hill selling tailored clothing in a casual environment. But there are times when the younger generation needs to get that job or go to a wedding, even in a less dressy world.”

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