business news in context, analysis with attitude

Got the following email from an MNB reader:

I love technology, Kevin, I think I was the first to switch to cassettes (from 8 track) and then to CDs (there I go dating myself).
I even adopted Beta format video tapes early too (big mistake).

However, as many retailers are focused on incorporating hi tech on the sales floor they should be glancing at 2 of my most popular shops, Trader Joes and Costco. Is that too simple?  They both have well trained, accessible people that augment the shopping experience in a positive way.  The result, the shopping trip is quicker and I have a more enjoyable experience.  Yes, even Costco.  The lines may be long but they move. In addition, nearly 100% of the time I am greeted by a generally happy person at the register and at the exit. Other retailers need to notice since AI is still a ways away in scale and you still have people in your store today (you are the lucky one) that are just a choice away from switching to someone who cares more about them.

Good point.

MNB reader Dan Jones wrote:

The vast majority of AI applications will not be directly customer facing.  As an example:  AI will be used for better forecasting (by SKU by Store) which will lead to better Warehouse and Store fulfillment.  This will drive a much better customer experience due to better in-stocks, but this AI success will not be apparent to the consumers.

Regarding the new robotic pizza delivery system that is going to be tested by FedEx, MNB reader Carol Schnabel wrote:

FedEx better deliver pizza faster than its packages and no handing off to the post office.


Finally, we had a story last week about how an academic study from the University of Nevada Las Vegas (UNLV) said that “the quality of fruits and vegetables at dollar stores is just as good as regular grocery store produce.”

According to the study, “The findings are especially good news for the 17.3 million people nationwide who live in low-income areas more than one mile from grocery stores — areas referred to as food deserts by the U.S. Department of Agriculture. Dollar discount stores may exist in these areas and be an alternative for residents who currently access fast food or sugary and savory nutrient-deficient snacks found at gas stations which can lead to obesity or other health problems … While there was slightly less variety of produce at dollar stores (for example, none of the dollar stores carried pears), there was no significant difference in quality.”

I commented:

If I were a dollar store, I’d make this study a centerpiece of my marketing efforts. I’m not sure that what the study describes is a national phenomenon - I’ve generally found that the farther west you go, the better the produce tends to be (though I’m sure I’ll get some blowback on that one) - but I’d take these results and run with them.

This prompted one MNB reader to write:

Just how many dollar store executives read your daily news? I think you just love thinking that any new or different concept will put experienced supermarket operators out of business. You might want to think about supporting the base that supports you.

First of all, I don’t think I suggested that dollar stores would put traditional supermarkets out of business. What I did was a) quote an academic study, and b) suggest that if that segment were smart, it would make the study a marketing centerpiece.

This wasn’t meant to “support” the dollar store segment over the supermarket segment. It was to recognize a possible reality … which, by the way, ought to energize the supermarket segment to get better in categories that used to differentiate them.

Same goes for other business models that represent a threat to the traditional supermarket business. I’ve never argued that new business models will put the old model out of business … just that mediocre, undifferentiated stores that do not adapt to new realities are likely to find themselves facing obsolescence.

This seems like a perfectly defensible position to me.

I’ve never seen my job as being supportive, but rather to be provocative, and to get people to think about their businesses within the context of possible tomorrows.
KC's View: