Online Feels ‘Off’ to Most Shoppers

Supermarket News: “Going by the trends in retail grocery, online ordering of groceries and meal kits likely stand near the top. But by the numbers, the vast majority of Americans are doing neither, a new Gallup poll finds. Of 1,033 U.S. adults surveyed, 84% said they never order groceries online and 89% never order meal kits, according to Gallup, which released the study results this week.”

“The small percentage of consumers that do order groceries or meal kits online don’t do it very often. Just 11% reported they order groceries online for pickup or delivery twice a month or less, and 4% said they do so once a week or more. Meanwhile, 9% of respondents order meal kits for home delivery two times monthly or less, and only 1% do so once weekly or more.”

Lydia Saad of Gallup comments: “Services like PeaPod, Instacart, Shipt and Amazon Fresh that cut out the trip to the grocery store appeal mainly to those short on time: parents with children younger than age 18 and employed adults. Higher-income Americans are also bigger adopters of grocery delivery, either because higher income means they can afford more groceries or they have greater access to mobile technology like smartphones and tablets that make ordering online easier.”

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Craft Beer Lightens Up

The Wall Street Journal: “While mega breweries flaunt puny carb counts, microbrew fans tend to assume that ‘lite’ means flavorless. Lately, however, craft brewing has been quietly losing weight, squeezing into macro-brew territory with beers as low in alcohol and calories as mass-made lagers—only deceptively, defiantly flavorful. Small-scale breweries have, historically, produced big, bold brews … But a strange thing happened in 2007 when Dogfish Head Brewery released Festina Peche, a slightly sour, peach-infused wheat that barely tipped the scales at 4.5% ABV and 8 IBUs (International Bittering Units): It sold.”

“While Dogfish still sells truckloads of crushers such as 120 Minute IPA, the brewery’s SeaQuench Ale, a 4.9% gose released in 2016, has been the fastest-growing beer in the company’s history … Lagunitas and other breweries like them are retooling accordingly. Yes, Lagunitas, makers of boozy bruisers like aptly named Maximus (8.1% ABV) and Hop Stoopid (8% ABV) is releasing light beer … Tuning down their brews shifted Dogfish Head‘s source of inspiration, too, from American hop fields to the European grain belt.”

For “Dogfish Head’s latest light beer, Grisette About It! (3.5% ABV and under 100 calories) … the brewers chose grisette, an old-timey French wheat-beer style. To emphasize its grainy character without carb-loading, they used a low-sugar, 17th-century oat variety from Columbia, S.C., granary Anson Mills, along with malted wheat and a little honey.”

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How Text & Chat Gets Satisfaction

The Washington Post: “The biggest shift in customer service since the 1-800 number is underway. Some 20 million businesses now use Facebook Messenger each month to talk with customers. Apple is leading companies as diverse as Lowe’s, Marriott and Wells Fargo into taking service queries, scheduling deliveries and even paying for purchases over iMessage. And Facebook’s WhatsApp, already used by 3 million businesses, including many outside the United States, is building a business around charging companies to better serve us over chats.”

“Business messaging isn’t the same as chatbots, which are programs that try — and often fail — to provide automatic answers to questions. This is about talking to real people, though some companies blend both automation and humans. Messaging a business can bring new kinds of frustrations. Not every company is prepared for 21st-century customer service; some put the newbie employees on chat duty — others rely too much on robots.”

“LivePerson, a company that makes support software used by 18,000 companies, says when given the option, 70 percent of people chose a “message us” button over a “call us” button on a company website or app. And it says customer satisfaction rates are 25 percent higher for chatting and messaging than for calling.”

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Swedish Samosas: Ikea in India

The New York Times: “Ikea’s opening in India — and its subsequent success or failure — is likely to become a case study for other international retailers. India’s retail landscape is complex. With a growing middle class, its 1.3 billion people buy about $30 billion a year of furniture, lighting and household items like bed linens and cookware … But despite the efforts of a few local chains, 95 percent of those goods are sold through small shops that offer custom-built products, usually specializing in one category such as wooden furniture or lamps, and offer free assembly and delivery.”

“Ikea stores are the polar opposite. Part showroom and part warehouse, they are sprawling outlets that are far from city centers with mazes of giant bins and floor-to-ceiling shelves. Ikea’s brand signals affordable, mass-produced and functional, and its design aesthetic is lightweight and lean, in contrast to the heavier, bulkier furniture traditionally favored in Indian households … All of this has forced Ikea to rethink its product lineup and store operations for India. Although the Hyderabad store has the classic Ikea layout, what’s on display is somewhat different.”

“Given India’s lower income levels, the store features hundreds of products — from dolls to spice jars — priced at less than 100 rupees, or $1.45 … Indian families spend a lot of time together, with relatives frequently popping in, so the company added more folding chairs and stools that could serve as flexible seating … Some items popular in the United States, such as untreated pine furniture, do not endure in south India’s hot and humid climate … Even the cafeteria caters to Indian tastes, with biryani, samosas and vegetarian Swedish meatballs on the menu and 1,000 available seats, more than any other Ikea in the world, to accommodate the more leisurely dining style of Indian families.”

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Lucy Sparrow’s Felt Supermarket

Boing Boing: “UK artist Lucy Sparrow is back with a new shopping opportunity for lovers of her fantastic felt products. Until August 31, at The Standard hotel in downtown Los Angeles, Sparrow is showing her most ambitious exhibit yet: the Sparrow Mart Supermarket. This is her fifth and largest all-felt installation (it features 31,000 handmade products) and her first West Coast one.”

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The Price is Right — Or is It?

The Wall Street Journal: “A simple mathematical error leads shoppers to make mistakes when evaluating offers that promise to save them money. Sometimes they inadvertently pick the priciest option. Sometimes they overestimate the benefit of a bargain. And sometimes they don’t recognize that competing promotions offer identical savings. The problem involves percentages.”

“Instead of comparing unit prices, shoppers tend to judge offers based on the size of the benefit. Getting 50% more of a product must be better than knocking 33% off its cost, right? Wrong. The savings are identical, but on the fly, even savvy shoppers make mistakes … Consider a pound of coffee beans that normally costs $15. If a shopper receives 50% more free, the price is $5 for each half-pound. A discount of 33% reduces the original cost to $10, which is also $5 per half-pound.”

“One of the most common ploys used to sway consumers is the double discount. A 40% discount on a $1,000 suit drops the price to $600. Marking the suit down twice, first by 20% and then by an additional 25% decreases the cost to $800 before shrinking it to $600. The deals are identical, but the double discount feels more generous … To test responses to offers of discounts or bonuses along with shoppers’ ability (or willingness) to calculate percentage change, .. several experiments revealed that consumers generally favor product bonuses over price discounts, reduced quantities over increased prices and double discounts over single discounts.”

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When Small Grocers Get Big Ideas

The New York Times: “DMG Foods, a bright, 7,000-square-foot, nonprofit grocery store … is one of a growing number of experimental grocery stores that have emerged as traditional supermarkets confront a crisis that industry analysts say could surpass the retail apocalypse that pounded shopping malls a decade ago … some of the most radical reinvention is happening at the local level, in both cities and small towns, where a new breed of small community stores use the grocery aisles to fill cultural niches and address social needs.”

“At Nada, everything, including toothpaste and chocolate, is sold package-free. Shoppers can buy scoops of frozen berries, a handful of crackers and just one egg, if that’s all they need. There’s no plastic wrap or paper at the deli counter. Customers bring their own containers, buy reusable ones at the store or take some from a stack that have been cleaned and sanitized, using a digital scale to weigh and tag them before they start shopping … There’s a similar store, Zero Market, in Denver, and one called the Fillery planned for Brooklyn. No-waste stores are already popular in parts of Europe, and are popping up in other Canadian cities.”

“Two thousand miles away in New Prague, Minn., population around 7,600, Kendra and Paul Rasmusson have been inundated with inquiries from people equally enamored with their grocery concept: a store that is largely unstaffed … inspired by a nearby 24-hour fitness center, they had an idea: Why not create a store that didn’t need staff, for shoppers who wanted organic ketchup, gluten-free crackers and vegetables from local farmers? Members pay $99 a year and use a key card to open the door. They can shop anytime they want. Lights are motion-activated, and checkout is done on an iPad. Members can use a space upstairs for community meetings, or hold classes on making kombucha or Spanish for children.”

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Meal Kits: The Complexity of Simplicity

The Wall Street Journal: “Meal kits may make cooking easier, but getting a box of pre-portioned ingredients and instructions to a customer’s door is one of the most complicated logistics riddles in the food business. Companies have poured millions of dollars into solving such questions as how to stack fish and fennel in boxes. They’re also investing in systems to reroute shipments during snowstorms and algorithms to predict what customers want to eat during the summer months.”

“Meal-kit spending by consumers has grown three times as fast as spending in established food sectors such as restaurants and grocery stores since 2015, according to Nielsen … But companies that sprang up in garages or test kitchens are getting a close look at just how expensive and complicated it can be to deliver millions of boxes a month to customers’ homes or to supermarkets. Startups have had to devise workarounds for everything from heavy weather to diverting trucks around highway accidents, and company founders have lots of war stories, especially from the early days of their operations.”

“To help keep a lid on costs, Sun Basket, whose meal kits target health-conscious consumers, has gone so far as to set up a Midwestern distribution center in a converted limestone cave—a cheaper way to keep its products cold than spending millions to convert a conventional warehouse in the region for refrigeration. The temperature inside the underground facility remains stable regardless of whether it’s hot or cold outside, so the company spends less on electricity.”

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Store Check: Kitchen Arts and Letters

The New York Times: “Kitchen Arts and Letters doesn’t present as one of the world’s great bookshops. It has no library ladders or espresso bar, no smell of bookworm or brass polish, and nowhere to sit. It has only slightly more bookish allure than the nail salons and hardware stores that surround it on a commercial block of Manhattan’s Upper East Side … What the small storefront does house is a very deep knowledge of a very narrow subject: books about food. And that knowledge is rewarded by the kind of loyalty that induces customers to drop thousands of dollars at a clip, mostly based on the recommendations of Nach Waxman, its founder, and Matt Sartwell, the managing partner.”

“Rarely crowded, the store sees a constant stream of seasoned home cooks who know what they want … Curious culinary novices find their way in, and are tenderly guided through a series of diagnostic questions to a suitable starter book … those who have simple taste and want to cook for sustenance; those who already love to eat but never learned to cook; and those who are recipe-resistant but believe in mastering the kitchen through science.”

“But most of the store’s customers, though not present in the flesh, are the professional and aspiring chefs who routinely order whatever new volumes the owners are stocking, whether from Catalonia or the Carolinas. If they actually use the books, or even read them, is not pertinent; they act as a window into how the world’s most influential chefs are thinking, dreaming and plating … By determining which cookbooks to pull from the torrent of global publishing and send into our kitchens, they might be the most quietly influential figures in American cuisine.”

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How FreshDirect Lives Up To Its Name

The Wall Street Journal: “FreshDirect launched its online-only service in 2002 in New York. Its green and orange trucks now provide next-day delivery to customers across the New York-New Jersey, Philadelphia and Washington, D.C., metropolitan areas, with plans to expand into Boston next … Amazon, Target Corp. and other large companies have invested hundreds of millions of dollars to expand food delivery and build out their grocery e-commerce operations. Supermarket chain owner Koninklijke Ahold Delhaize NV’s Peapod unit, the longest-running online grocery service in the U.S., has expanded to 24 markets and is investing in technology to cut its handling and delivery costs.”

“The grocers are trying to solve one of the toughest problems in home delivery: Getting food to doorsteps in the same condition consumers would expect if they went to the store themselves … FreshDirect’s logistic hurdles start well before delivery. It must get products from its suppliers to the building, process the food, then pick, pack and ship orders before the quality degrades. That is why its new facility has 15 different temperature zones … Software determines the most efficient route for each order, and tells workers which items to pick … The site has shaved the time it takes to fulfill an order by 75%, according to FreshDirect, and doubled the number of items picked per hour, compared with the pace at its old facility in Long Island City, Queens.”

“The stakes in getting the technology right are high. FreshDirect is competing with grocery chains that often fill online orders through their stores, using a mix of staff and third-party services like Instacart Inc .. Online-only operations with centralized warehouses tend to be more efficient than logistics run out of stores, because they use fewer workers and can position goods for faster fulfillment, said Judah Frommer, a food retail analyst with Credit Suisse … FreshDirect says its relatively small scale also can be an advantage since it doesn’t have to be all things for all shoppers.” FreshDirect Chief Executive Jason Ackerman comments: “We focus on being the best local food, fresh food retailer. And a lot of the tech is to support that.”

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