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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Bodega: The Future of Convenience?

Fast Company: “Paul McDonald, who spent 13 years as a product manager at Google, wants to make this corner store a thing of the past … launching a new concept called Bodega with his cofounder Ashwath Rajan, another Google veteran. Bodega sets up five-foot-wide pantry boxes filled with non-perishable items you might pick up at a convenience store. An app will allow you to unlock the box and cameras powered with computer vision will register what you’ve picked up, automatically charging your credit card. The entire process happens without a person actually manning the ‘store’.”

“The idea is to preempt what people might need, then use machine learning to constantly reassess the 100 most-needed items in that community. In a sorority house, for instance, young women might regularly purchase pretzels, makeup remover, and tampons. Meanwhile, in an apartment block, residents might regularly buy toilet paper, pasta, and sugar. When an item is bought, Bodega gets a note to replace it, and regularly sends people out to restock the boxes.”

“In most cases, Bodega doesn’t pay for the retail space, but pitches itself as an amenity or a convenience to property managers. At gyms for instance, McDonald makes the case that having a Bodega stocked with power bars and protein powder might make the facility more attractive to members … The major downside to this concept–should it take off–is that it would put a lot of mom-and-pop stores out of business.”

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Costco Knockoffs: It’s Cruel to Be KIND

The Wall Street Journal: “Kirkland Signature, Costco’s store brand, is challenging manufacturers hoping to earn or retain a coveted spot at the warehouse retailer. Since 1995, Costco has used its Kirkland products to attract shoppers, building a reputation for quality and low prices on milk, toilet paper, men’s shirts and golf balls bearing the unassuming red logo. About a quarter of Costco’s $118.7 billion in annual sales come from Kirkland Signature products, and the percentage is growing, company executives say.”

“Costco often introduces a new Kirkland product when its buyers or executives believe a brand isn’t selling at the lowest possible price.” For example: “Kind Bars sold for about $18 for a pack of 18 … When almond prices dropped in 2016 … Costco developed the Kirkland Signature Nut Bars, made by Leclerc Foods USA, which is owned by Leclerc Group, a Canadian manufacturer, and now sells a 30-pack for $17 in stores.”

“Kind Bars are still carried at Costco, though mostly new varieties, including fruit bars, mini nut bars and a peanut-free bar. ‘We look forward to continuing to grow with them,’ a Kind spokeswoman said.”

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Eataly Regulars: Try Some & Buy Some

The New York Times: “Eataly NYC Flatiron, which opened in August 2010, has become a popular attraction for tourists. They pack the 50,000 square-foot Italian food emporium, cameras in hand, to buy Italian imports and dine at its several restaurants. But in the produce section, there’s nary a tourist in sight. This is where regulars … stock up on their fruits and vegetables. Produce is delivered and restocked twice daily. Some of it, like blood oranges, Italian frisée and radicchio di Castelfranco (a red-streaked, bitter yellow leafy vegetable) is shipped in from Italy while the rest is from around the United States and nearby farms.”

“On the hunt for fresh baby corn or purple baby cauliflower? They’re here. So are about 17 kinds of mushrooms, including lobster and blue foot, and all sorts of radishes like Easter egg and Cincinnati. The staff of 14 is well-versed on the produce, and tasting is encouraged.” Produce manager Lenny Espinal comments: “I’m a big believer in the try-before-you-buy philosophy. If you don’t like it, you won’t waste your money buying it.”

“One of the department’s most interesting features may be the vegetable butcher, Nicole Williams, who stands at a counter with a sink at Eataly’s vegetarian restaurant, Le Verdure. She washes and chops customers’ fruits, herbs and vegetables for free. She also prepares samples. Recent offerings included watermelon chunks and jicama rounds dressed with olive oil, salt and lemon.”

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Blockchain Grocery: How Walmart Delivers Food Safety

Quartz: “Thanks to technology originally designed to monitor cryptocurrency … something that could put a significant dent in the number of foodborne illnesses that occur every year. It’s part of a new program in which IBM is partnering with Walmart, Nestlé, Dole, Tyson Foods, Kroger, and others, to use blockchain technology to track food throughout the complex global supply chain.”

“Under the new system, if a consumer falls ill from E. coli traced to a batch of lettuce, a food-safety investigator could conceivably scan a barcode on the packaging to quickly learn where it came from and where other lettuce from the same batch went. Retailers will be able to quickly remove contaminated products from shelves, thus stopping the spread of illnesses.”

“Walmart has been using a pilot version of the technology, showing how blockchain can be expanded beyond the financial, health care, and natural resources sectors to be applied to the foods that consumers interact with every single day. Coupled with companies’ efforts to stop food-borne illnesses early on, this could signal a major moment in how humans keep the food system in check.”

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Quote of the Day: Stew Leonard, Jr.

“I’ve been in retail since I was a kid, and I’m always nervous. Costcos were opening, then Walmarts, then Whole Foods. But at the end of the day, you just have to try and get the freshest corn out there on the sidewalk.” ~ Stew Leonard, Jr. CEO of Stew Leonards, in The New York Times.

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Quote of the Day: Rishad Tobaccowala

“The way I think about advertising is it’s in secular decline and I need to think about products and services much more than I need to think about communication.” ~ Rishad Tobaccowala, chief growth officer for the Publicis Groupe, in The New York Times.

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Meal-Kit Meltdown: DIY Meals Are Cooked

The Wall Street Journal: “The promise of meal kits was to finally make cooking easy enough that Americans would actually do it. Proponents hoped that a cooking revival also could ease the nation’s obesity crisis—a way to reclaim control of what we eat from the big food manufacturers and restaurant chains … the amount of cooking required has apparently been too much, even for the farm-to-table crowd. (So much chopping!) Industry analysts believe that meal-kit purveyors are having trouble retaining customers.”

“The companies are only now starting to acknowledge the truth about the American home cook. Blue Apron recently introduced recipes that are faster to prepare. Amazon and other more recent entrants such as FreshRealm, Gobble and Terra’s Kitchen are going further, dialing back the prep work to almost zero.”

“Americans talk a good game about the importance of home cooking and family meals, but we still want convenience above all. To succeed, meal kits won’t just have to be easier than starting from scratch; they will have to be as easy as takeout.”

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Cut-Throat: Lidl vs. Walmart, Kroger & Aldi

Axios: The German discount grocer Lidl made its United States debut this June, opening 20 stores in the Carolinas and Virginia just weeks after its compatriot Aldi announced its own expansion plans in the U.S. earlier this year … Lidl entered the market aggressively, with prices in its Winston Salem, NC, store that were 9.1% lower than the local Walmart, according to a study conducted in June by Jefferies analyst Christopher Mandeville. Given those results and Lidl’s ‘enjoyable’ shopping experience, he says Lidl could be ‘highly disruptive’ to incumbents like Walmart.”

“But the tide may be shifting, as it appears Walmart has cut the price differential to just 2%, according to a survey by Oppenheimer that looked at prices roughly a month after Jefferies visited the same locations … Oppenheimer analysts Rupesh Parikh and Erica Eiler write, ‘pricing appears dynamic and cut-throat’ at the Walmart and Lidl locations they visited in Winston Salem. ‘During our visit in the afternoon at Walmart, [a gallon of] milk was priced at $2.08. When we went back in the evening, milk dropped to $1.95. Lidl had its own deals, with a carton of eggs on offer for just 52 cents’.”

“Parikh and Eiler think that Kroger (rather than Walmart) is more threatened by German upstarts. Aldi has been in the U.S. longer than Lidl, and has big plans to become the third-largest grocer in America. But Parikh and Eiler were unimpressed, calling Lidl ‘a bigger and nicer Aldi,’ which had ‘wider aisles, enhanced lighting, and a bit more upscale feel,’ they write … No doubt the grocery shoppers of Winston Salem and other markets are enjoying the ongoing price war.”

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