business news in context, analysis with attitude

Got the following email about the Walmart-Jet deal:

Having worked at Walmart last year, the Jet acquisition will help Walmart on the technology side, but the impact will be minimal for many reasons, and here are a couple:

More people use Amazon to start a product search (over 30%) than Google.  This is a huge advantage, and a Jet-Walmart combo has no impact on this because as you mentioned, Amazon is operating in a different sphere.

Amazon has a distribution network that Walmart can’t match (for consumer orders).  Yes, Walmart has lots of stores, but they don’t know what their inventory levels are.  A Walmart associate told me their store inventory was 50% accurate, but they don’t know which 50%.  This isn’t only a Walmart problem, as most retailers are in the same boat.  The same thing would happen to Amazon if they opened up their warehouses and had thousands of random consumers roaming through the aisles, picking stuff up and putting it back somewhere else.

I’ve used Jet, and it’s OK, but right now, nothing beats the ease of use of Amazon, not just the app, but the whole experience.  Amazon has earned my trust.  I don’t know what Walmart, or anyone else for that matter, can do to overcome this.

Agreed. And once again, I refer you to the Farhad Manjoo piece in the New York Times about this subject that can be read here.

Along the same lines, we got the following email from MNB reader Maurine King:

I appreciate your comments so much regarding e-commerce which I do follow.  I am a Star Trek fan…and also remember a cartoon from way back called The Jetsons.  It was a family that lived in the sky and worked three days a week.  They had a robot maid called Rosie who was the best!  I remember Mr. George Jetson talking to his boss and looking at him on a screen as he spoke to him.  Who would have ever thought we would be able to do the same thing…which we can now, thanks to Facetime!  What was “futuristic” is here to stay!  Just couldn’t help but share where we once were and where we are headed in the future!

On the subject of the coming Wegmans-Publix battle in Richmond, one MNB user wrote:

This should be very interesting indeed. I’ve visited several Wegmans’ before, but I’ve competed with Publix. I worked for a retailer headquartered in Birmingham several years ago, and when Publix entered that market, we studied them inside and out in preparation for their entry into the market.

Where Publix shines, at least in my opinion, is in their operational execution, their stores are always conditioned, well-staffed and there is a sense of urgency in the way their employees go about their business. Especially on the front end, and they keep all their perimeter shops well-staffed…especially their bakery which sets the stage for the balance of a shopping trip. They don’t blow you away with variety or complex merchandising techniques, so their stores are not visually interesting, or exciting. They just do what they do really, and I mean really well.

And that can win the higher income, well-educated consumer in many markets where competition is leveraged from a labor standpoint, or against those retailers that operate in an operationally restricted mode.
Wegmans is a completely different ballgame. Wegmans’ stores are visually stimulating, their display techniques and variety are complex…which necessitates a great deal of conditioning, therefore labor to maintain. And by all accounts, their customer service is stellar. It will be interesting to see a well-oiled operations driven company like Publix  go up against a merchandising driven company with outstanding operational execution like Wegmans.

It’s a great win for the customers in the Richmond market.

On another subject, from another reader:

Regarding the Hampton Creek mayo story, where people associated with the company may be posing as customers and “hyping” sales by purchasing and requesting the product – am I the only one who recognizes this possible behavior as unsurprising?

I spent many years (pretty good ones, I might add) in the “trenches” of retail 30 or more years ago, and began by working at store and district level in my region doing the kind of hands-on service and store activities that were common in those days. Before there were corporate planograms or easy access to POS data, stores mostly used individual store sales as guidelines for space and trusted both brand and third party supplier reps to keep their shelves up to date with new items. There were rules of behavior, but it was a daily form of trench warfare that was much more local and personal than the headquarters-based systems in place today. And it was common, as a rep for what might be a marginal product at risk of deletion, to buy some to generate movement. If the item was important enough and there was enough invested in its success, there were crude but common efforts to engage friends, neighbors, relatives – all to ask for the product, to raise its visibility, or to buy a couple to hype its movement. Usually there was a goal – a coupon drop, and FSI, a TV campaign – that was scheduled to support the item and we had to work to keep it cut in on the shelf until the media cavalry arrived.

This story sounds like a difference of degree, certainly, and for a different purpose. But the method sounds awfully familiar.

Sometimes I feel like I woke up from a nap with the TV on and the world is running a black-and-white movie from about 1946. The characters are cardboard the plot is simplistic, the action is jerky, there are no special effects – but you can recognize all the devices and maybe even a few actors and you feel like you have seen this before. There are new things under the sun – but also a lot of old ones that keep coming back.

KC's View: