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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Self-Checkout: A Shoplifter’s Dream?

The New York Times: “Self-service checkout technology may offer convenience and speed, but it also helps turn law-abiding shoppers into petty thieves by giving them ‘ready-made excuses’ to take merchandise without paying, two criminologists say.”

“The scanning technology, which grew in popularity about 10 years ago, relies largely on the honor system. Instead of having a cashier ring up and bag a purchase, the shopper is solely responsible for completing the transaction. That lack of human intervention, however, reduces the perception of risk and could make shoplifting more common, the report said.”

“In a behavior known as ‘neutralizing your guilt,’ shoppers may tell themselves that the store is overpriced, so taking an item without scanning is acceptable; or they might blame faulty technology, problems with product bar codes or claim a lack of technical know-how.”

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Simple Products Beget Simple Packages

The Wall Street Journal: “Instead of burying ingredient lists in the fine print on the back of the package, food manufacturers are trumpeting simpler formulas prominently on the label’s front … More people care deeply about what’s in their food and insist on recognizing the ingredients. The litmus test for many consumers is whether those ingredients might appear in their own kitchen cupboards.”

“Simply Tostitos Organic Blue Corn Tortilla Chips boast only three ingredients: blue corn, organic expeller-pressed sunflower oil and sea salt. This past June, General Mills Inc.’s Larabar snack bar line launched Larabar Bites. The bites—available in flavors such as double chocolate brownie and cherry chocolate chip—resemble truffles and contain few ingredients which are prominently displayed on the front of the package.”

“New ads for Haagen-Dazs ice cream in major cities such as New York and Los Angeles show a spoonful of vanilla ice cream. ‘5 ingredients, one incredible indulgence’ read ads, which also list the recipe of cream, milk, sugar, eggs and vanilla … This fall, ConAgra’s Bertolli Frozen Meals is rolling out a new, reformulated line of meals that feature a shorter ingredient list that reads more like a recipe.”

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Grocery Outlet: The TJX of Supermarkets?

Business Insider: “Grocery Outlet wants to be the TJ Maxx of grocery stores … Grocery Outlet says it sells items at a 40% to 70% discount off regular stores’ prices by offering surplus items, seasonal closeouts, and discontinued items. While some of its items aren’t up to manufacturer standards, none of what it sells is past the sell-by date.”

“Like TJ Maxx, grocery outlet says it relies on a ‘treasure hunt’ experience to hook consumers. Because customers don’t know exactly what products they will find at Grocery Outlet, they keep coming back for the thrill. Still, Grocery Outlet executives tell Frozen & Dairy Buyer magazine that they strive to make stores a place where people can do most, if not all, of their food shopping.”

“While Grocery Outlet doesn’t offer amenities like a deli, it tries to excel in customer service. It also sells wine … workers will carry your bags to your car for you … Grocery Outlet is also making a big push into organic, healthy, and specialty food … It plans to open an additional 125 stores in the California and mid-Atlantic region by 2020.”

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Meet the Spuglies: Walmart Attacks Food Waste

Quartz: “Shoppers tooling down Walmart grocery aisles now encounter brands that package and sell ugly produce. The ‘Spuglies’ brand markets misshapen potatoes and the ‘I’m Perfect’ brand offers apples that have gone askew. These companies pushing misfit fruits and veggies into the mainstream give consumers a way to fight food waste with their wallets.”

“Since it began tackling food waste within its own system in 2013, the retailer says it has diverted 82% of food that would have otherwise gone to landfills. That amounts to about 2 billion meals. According to ReFED, a food waste advocacy group, a 20% reduction in waste would reclaim the 1,250 calories per capita that goes into landfills each year. That’s enough to feed America’s food-insecure population three times over.”

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Direct Disruption: The Tide Wash Club

The Wall Street Journal: “Blindsided by the success of the upstart Dollar Shave Club, an online subscription service that chipped away at the dominance of Gillette razors, P&G executives say they are focusing not only on what consumers buy but on how they buy … P&G is experimenting with … the Tide Wash Club, an online subscription service for the dissolvable Tide Pods capsules that are the company’s highest-priced laundry detergent. The company offers free shipping at regular intervals.”

“Another new offering: Tide Spin, an undertaking P&G is calling the ‘uberization of laundry,’ in which customers in parts of Chicago can use a smartphone app to order laundry pickup and delivery from Tide-branded couriers. With the ventures, P&G is delving deeper into the business of connecting consumers directly with the products it makes, especially a new generation less loyal to the company’s big brands.”

“Privately, P&G executives acknowledge the company was caught off guard by the success of Dollar Shave Club, which started in 2011 and says it now has 3.2 million subscribers. ‘It was probably on the radar but we weren’t necessarily having the right conversation around what might disrupt us,’ said a person familiar with the company’s thinking.”

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