Walmart & The Nexus of Hi-Tech and Hi-Touch

Walmart CIO Karenann Terrell: “We’ve observed that online customers have a very, very high level of satisfaction—above 90%—while for those shopping in the store, it isn’t nearly at that high level. We wanted to dig underneath and find out why. The convenience of online ordering, coupled with the special treatment online customers get when they come in person to pick up their orders, leads to a more satisfying experience.”

“We’ve hired dedicated personal shoppers to pick these online grocery orders for customers. They see these customers regularly and know their preferences and begin to know them personally. That has been a huge learning for us in how we will manage stores. One associate wrote a Happy Mother’s Day card to a single mom who visits every week and has a son with Down syndrome.”

“I’m so fascinated with the Internet of Things. It could make a huge difference operationally and with the improvement of the experience for customers … It’s real-time data about goods on the shelf at the time that the customer shops. On-shelf availability means what the customer wants is fully available to them. They don’t say, ‘I wanted Crest Pro Health toothpaste but they were out.’ The Internet of Things is going to rock the world of operational effectiveness.”

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Grass-Fed Beef: Not a ‘Luxury’ Anymore

The Wall Street Journal: “Grass-fed beef, once a niche luxury, is now sold at ballgames, convention centers and nearly every Wal-Mart in the U.S. Beef labeled as grass-fed connotes much more than cattle that were raised in a pasture, say grocers and restaurateurs. Many consumers perceive grass-fed beef as a healthier, higher-quality alternative to conventional beef and are willing to pay more for it, no matter that labeling—and flavor—can be inconsistent.”

“Not every retailer is onboard. Costco Wholesale Corp., the country’s second largest retailer after Wal-Mart, doesn’t sell grass-fed beef, though it sells organic ground beef in every U.S. store. The definition of grass-fed beef is still too ambiguous, the taste too inconsistent and Costco consumers gravitate most to an ‘organic’ label for now, says Jeff Lyons, Costco’s senior vice president of fresh foods.”

“Theo Weening, Whole Foods’ global meat coordinator, expects demand for grass-fed beef to grow well beyond human appetites. ‘When a customer likes grass-fed beef and they have a dog, they want the dog to have grass-fed beef, too,’ he says.”

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Rural Retail Joins Digital Age

The Wall Street Journal: “E-commerce hasn’t just reached rural America, it is transforming it by giving small-town residents an opportunity to buy staples online at a cheaper price than the local supermarket. It also provides remote areas with big-city conveniences and the latest products. Contemporary fashion, such as Victoria Secret bathing suits or Tory Burch ballet flats—items that can’t be found at Dollar General—are easily shipped.”

“According to Kantar Retail, about 73% of rural consumers—defined as those who drive at least 10 miles for everyday shopping—are now buying online versus 68% two years ago. Last year, 30% were members of Amazon Prime, up from 22% in 2014 … A Wal-Mart built in 1982 in Altus, Okla. … brought residents choice, convenience and low prices. Now, online shopping is creating another retail revolution here that doesn’t require a half-hour drive to Wal-Mart or roughly 2½-hour drive to Oklahoma City … ”

“E-commerce has provided new opportunities for area residents to earn money. In Willow, Okla., Anneliese Rogers, a mother of three, raised $1,500 in one sitting by selling items from her closet on Facebook. Nearby, Kassandra Bruton mails up to 100 packages a week from her clothing store Trailer Trash … E-commerce has changed life for Flowers Unlimited, the last remaining Mangum, Okla. florist and gift shop on the town’s square. While it has lost much of its bridal and baby registry business to online retailers, it has one big advantage: There is still a need for last-minute gifts, says owner Darla Heatly. ‘They can’t do e-commerce if they don’t plan ahead,’ she adds.”

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Joy Makers: How Driscoll’s Brands Its Berries

The New York Times: “Its strawberries have been bred for a uniform shape … while Driscoll’s raspberries are pinker and shinier, made to meet desires expressed by consumers … Driscoll’s is betting that once consumers know why its berries are distinctive they will demand them by name … Driscoll’s plans to build awareness methodically, by starting with digital outreach. The company’s website, which largely offered recipes, has been changed to explain more about Driscoll’s berries and what makes them different.”

“The public will get an introduction to the people Driscoll’s calls its Joy Makers — agronomists, breeders, sensory analysts, plant pathologists and entomologists who will explain how the company creates its berries. The company’s YouTube channel will feature stories told by consumers about why berries make them happy. Facebook, Twitter and Instagram will be used to send traffic to the website and YouTube.”

“Labels on the company’s berries have been changed, too, to ‘speak’ more to consumers, using a scriptlike font for the Driscoll’s name with the dot over the ‘i’ colored to match the berries inside the box … Since margins on produce are razor-thin, most companies elect to spend the few dollars they have for marketing to woo buyers for supermarket chains rather than consumers.”

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Clarence Saunders & The ‘Piggly Wiggly’ Revolution

Jerry Cianciolo: ” … Self-service was a game-changer when Clarence Saunders opened the first Piggly Wiggly in Memphis, Tenn., 100 years ago this month … The 35-year-old Saunders set out to ‘ the demon of high prices’ … He reasoned that shoppers would gladly hand-select their own merchandise, and pay upfront, in exchange for lower prices and faster shopping. Coin-operated cafeterias had demonstrated as much with self-service sandwiches and desserts.”

“King Piggly Wiggly … stocked 1,000 products, four times the variety of a typical market. Customers entered through a turnstile and, basket in hand, followed a path through the aisles. Goods were neatly arranged with clearly marked prices, something heretofore unseen. There were even scales for shoppers to weigh sugar and other staples. The grand opening was a spectacle, featuring a beauty contest … Each woman entering the store received a flower and every child a balloon. A brass band played.”

“By 1923 … more than 1,200 Piggly Wiggly stores across dozens of states were doing $100 million annually (about $1.4 billion in today’s dollars). The company hit 2,600 stores by 1932 … Saunders didn’t integrate circuits or sequence the human genome. An observer once noted that coming up with a self-service grocery was ‘as simple as looking out the window or scratching your ear.’ Still, it was Saunders who gambled on the unconventional approach, doggedly spread self-service across the nation and shaped the grocery industry we know today.”

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Shoparazzi & The Kmart Shopping Experience

The Wall Street Journal: “Kmart … recently overhauled one of its stores in a Chicago suburb. The Des Plaines, Ill., outlet introduced a modest grocery section with meat and fresh produce … Lowered aisle heights allow customers to see new department signs from across the store, and the layout was made to look more spacious by widening the aisles. On a recent Saturday, a filled the store to take advantage of giveaways and to admire a face-lift that includes new paint, brighter lights, less clutter and the wider aisles.”

Dan Macaluso, a shopper, comments: “It’s amazing what cleaning the floors and turning the lights on can do … It suddenly looks like they want to be in business.” Kmart CMO Kelly Cook explains: “We’re starting here … In the next couple of weeks we’re really going to drill down to understand every single aspect.”

The branch is testing a free personal shopping program called Shoparazzi. Through it, customers can place an online order for pickup—even asking for items Kmart doesn’t stock but which a personal shopper could acquire … Tricia Perrotti, a Kmart spokeswoman, said the Des Plaines renovation is part of a plan to better align marketing and the store experience.”

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Walmart: Neighborhood Markets Crush It

Business Insider: “There’s a retail business with 700 stores nationwide that has 22 straight quarters of positive comparable sales growth and 11 straight quarters with comps up 5% or more. It’s not Kroger or Costco, but a division of Walmart that has been quietly crushing the competition — the Neighborhood Market.”

“There are a number of reasons why Neighborhood Market has found success … Grocery now makes up the majority of WalMart’s U.S. segment, and it’s been its best performing one in recent years … Grocery is also one of the few retail categories that rivals like Amazon.com have struggled to penetrate … delivering perishables to your doorstep remains difficult and expensive.”

“Wal-Mart began its life catering to rural customers and has long struggled to penetrate markets … The Neighborhood Market concept, however, has given it the ability to open up in dense cities where real estate may not be suitable for a Supercenter … Wal-Mart’s Neighborhood Markets can also take advantage of food deserts in such environments, neighborhoods where residents have little access to fresh food.”

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Cool Beans: America’s New Favorite Snack?

Christian Science Monitor: “Once relegated to the canned food aisle and the far reaches of the salad bar, the bean suddenly is becoming a star. These days, it’s popping up in the most unexpected places: in pasta and chips, and even as a centerpiece of dishes at the world’s best restaurants. And it’s no wonder, considering beans are packed with protein and a plethora of other nutrients, say nutrition experts. They’re also inexpensive and among the most environmentally benign agricultural crops.”

“Last year in the United States, sales of pulses – which are the seeds of legumes that are used as food, including peas, beans, lentils, chickpeas and fava beans – grew by 8 percent. By comparison, sales of meat grew by 3 percent. Global demand is also rising, especially for foods with green or yellow split peas and coral-colored lentils, reports market researcher Mintel.”

“Pepsi has launched a bean chip under its Tostitos brand, as has General Mills, under its Food Should Taste Good brand. The Good Bean chips are now available at many conventional grocers, including Costco. Its sales doubled in 2015 and are expected to do the same this year, says the company. Even 7-Eleven has signed on to carry the chips.”

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Grocery Spoils Target’s Profits

The Wall Street Journal: “Target Corp. has a problem in its grocery aisles: Shoppers aren’t visiting often enough to buy the retailer’s fresh meat, fruits and vegetables before they spoil … The issue, in part, is that Target’s supply chain wasn’t built to transport items with a short shelf life … Perishable foods, which usually are the big traffic drivers at most grocery stores, have been a drag on Target’s profits.”

“Shifting more control to a third-party vendor would move Target in the opposite direction of its biggest competitors. Wal-Mart Stores Inc., which gets more than half of its U.S. revenue from grocery, has invested in infrastructure to transport fresh foods on its own.”

“Target has made an aggressive push to add organic and gluten-free brands … Target also has spent more than $1 million per store to improve the look and inventory management of 25 locations in Los Angeles. The refurbished grocery area features new lighting and signage that highlights the organic and fresh products. The stores now get more frequent deliveries and carry more localized products. But rolling out those changes to all 1,800 Target stores nationwide would require a massive investment, analysts say.”

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