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Derek Lee

Product Manager, Lithia Motors
  • Posted on: 07/18/2022

    Should Amazon ax its private labels to appease regulators?

    I think the article prompting this discussion post is mistaken. The controversy isn't whether Amazon used customer data, but it's that Amazon used "proprietary" third-party seller data. Amazon is both a direct seller and a quasi-two way marketplace, and they've said that the marketplace data is not theirs to use, and especially not use to produce a cheaper white label product. The 2nd and 3rd paragraphs from an April 2020 Wall Street Journal article: "The online retailing giant has long asserted, including to Congress, that when it makes and sells its own products, it doesn’t use information it collects from the site’s individual third-party sellers—data those sellers view as proprietary. "Yet interviews with more than 20 former employees of Amazon’s private-label business and documents reviewed by The Wall Street Journal reveal that employees did just that. Such information can help Amazon decide how to price an item, which features to copy or whether to enter a product segment based on its earning potential, according to people familiar with the practice, including a current employee and some former employees who participated in it." I don't think that each of these actions in a vacuum would be grounds for anti-competition. But taken together and with Amazon's track-record, this is a legitimate concern, and I side with the regulators. If Amazon's response is to take the ball and go home with Basics, so be it.
  • Posted on: 04/19/2022

    Will Albertsons smell success with its Philadelphia Cream Cheese promo?

    Scent marketing has proven effectiveness, but I'm wondering if Kraft will see the ROI that they're seeking here. Famously, Disneyland has been using the scent of fresh baked cookies on Main Street USA to increase sales, and it works. But I ask myself, if I smell cheesecake, would I be inclined to buy a package of Philadelphia cream cheese? No, I'd be a lot more likely to buy a pre-made dessert in the bakery, in the same way others have cited fresh bread or the rotisserie chicken at Costco. I'm skeptical that this promotion would do anything for CPG, especially an ingredient like cream cheese. Unless Kraft is sponsoring the ready-to-serve cheesecakes in the bakery section, I don't see how they're coming out ahead on this one.
  • Posted on: 04/14/2021

    Is e-grocery killing or inspiring impulse buys?

    I think this is a really good point to focus on: what has been the use-case of online shopping for the past 13 months, versus what do we expect the reality of post-pandemic online grocery to be? In a world where online grocery shopping has become the primary form of grocery shopping, there are plenty of people for whom this will only be part of their wallet spend. I can see a future where I would use online for relatively-fungible staples, such as cooking oil, canned goods, and snacks, while using in-store shopping as a treat mechanism: artisanal cheeses, fresh seasonal produce, and breads and pastries. Does impulse buying groceries play as critical of a role in all futures?
  • Posted on: 04/14/2021

    Can own brand credit cards drive loyalty for Instacart and DoorDash?

    "With its DashPass program, DoorDash offers free deliveries for about $10 a month while Instacart Express offers free delivery on orders of $35 or more, also for $10 monthly." I wouldn't underestimate the power of this benefit. If it's paired with a $0 annual fee, this could be a very-compelling card for a large swath of Millennials. The Uber Card launched in late-2017 and was an instant hit. Granted, part of it was a generous 4 percent back on restaurants and $0 international transaction fees, but I think it's clear that strong benefits appeal to a large segment of customers in the sharing economy.
  • Posted on: 04/13/2021

    Does GameStop’s next CEO need brick & mortar retail experience?

    Is there still brand equity with GameStop? Sure, with the "GME Stonks" memes there's been a resurgence in talk for the GameStop days coming out of the woodwork, but for plenty of Millennials such as myself, GameStop's reputation is not good. Before the Wall Street Bets madness, the memes were more about how little GameStop would offer on trade-in value for games. I'm very suspicious of GameStop's reputation among video game buyers. There might be nostalgia for what GameStop was circa 2005, but will that actually lead to consumers coming back? Whoever leads GameStop into this pivot won't be able to ignore the negative connotations that they've earned over the years, and need to recognize that prominence = positive brand sentiment.
  • Posted on: 04/13/2021

    Does GameStop’s next CEO need brick & mortar retail experience?

    Something I haven't seen discussed is the retail-OEM relationship in digital, and how it's gearing to strangle GameStop's ability to pivot. If the market continues to move towards digital video games, GameStop won't be able to compete in its traditional space, digital or physical. Both video game publishers (EA, Ubisoft) and platform providers (Xbox, Sony, Valve, Epic) are competing to capture a bigger slice of margins by selling digital directly to consumers. When video games were primarily physical, OEMs had little say in the actual retailing of the games. But with digital, GameStop has practically zero reason to exist under its current model. Why would I, as a consumer, go to GameStop's website for a video game, when Steam offers the game directly from indie publishers for $20, and Xbox offers a Game Pass subscription service for AAA titles? If GameStop continues to exist as a going concern, I agree with the panelists that there needs to be a radical shift in their business model. This is not a simple pivot to digital - it is leveraging their physical store network, their rapidly-decaying reputation among consumers, and their franchise model flexibility to some end that actually gives "Power to the Players."
  • Posted on: 04/12/2021

    Why are McDonald’s restaurants leaving Walmart stores?

    What is the primary objective for this upfront space at Walmart, from Walmart's POV? Is it a footfall generator, a tool to keep customers in the store for longer, or to offer a fuller suite of services to customers? What has been the experience at other stores with a similar model (e.g. in-store Starbucks at Safeways and Targets)? My suspicion is that QSRs have made sense at Walmart (historically), because they don't cannibalize sales too badly and serve as a way to keep customers in the store, rather than as a footfall generator. I personally would love the UPS Store concept, but I don't think it would serve the objectives for Walmart as much as it would for the customer. When I drop off a package at a UPS Store, I want to get out of there ASAP, not linger to look at a new shirt. It's hard to beat chicken nuggets as a reward for getting through an hour of shopping as a kid.
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