We always hear about "Pet Parents," but several years ago I conducted a groundbreaking research study that identified three distinct segments within the high-bonded pet owner macro-segment -- and of the three, Pet Parents are NOT the most doting or the ones who spend the most money on their pets. No doubt spending on pets will continue to increase, driven by both demand and supply: 1) consumer need/desire to provide for their pets, 2) more and better premium options for food, services, and accessories in the marketplace, and 3) advances in both traditional and non-traditional medical treatment for companion animals, and 4) the broader availability of consumer knowledge of all of the above via social media. It is definitely here to stay.
Good use of consumer insights -- 90% of population within 10 miles of a WM store. It's a no brainer to try and with the volume running through Jet.com, expect this to become a full time position once they figure out the logistics. Alternatively it could just be a strategic move to create leverage for discount negotiations with FedEx, UPS.
I am going to go with this being a smart promotional event. If Jet were to be trying to gain experience by using STORY, I think we would all have to say the learning would be limited. STORY is not a broadly replicable approach and is in the most unique market on the planet. I have long campaigned that trying to be "cool" over "consumer-centric" is not sustainable in the long run. I trust that Jet is sophisticated and using this option as a strategic play to generate awareness among Manhattanites who may be inclined to use Amazon or Fresh Direct.
Not surprised. (Your move PetCo.) I see this as a perfect opportunity to accelerate retail transformation. A great benefit of Chewy is rapid home delivery. Rather than use the stores as a pick-up point, will they be able to cost-effectively move the origination of shipments to the local store and provide same-day or 24 hr delivery? And of course the companies will now enter into the all-important branding debate ... to combine or not to combine the brands.
Agree that customized packaging is only useful as short-term "buzz," but that can be valuable and drive promos as well as reflect positively on the brand. An exception would be in the case of high-end (think Tiffany's level) products. In this situation the consumer should expect personalization. What would be a greater opportunity for the mainstream is customized products where possible (M&M's, Dove, etc).
I think this one is in the numbers. Amazon web services represents 44% of sales (same as sales from general merch), but the web services EBITDA is 35.9% vs 8.9% for general merch. The more companies that use their web services, the more profitable this company becomes. Infrastructure as a service represents a $9B market and is growing at 35%-40% annually. Amazon web services currently holds a 37% share and is growing at 60% annually. Pushing people to do something that will drive sales of your most profitable business, is just good business.
Consumers are beginning to cut cords everywhere and that includes the cord to the (current) physical store. Over time, the role of the store will transform as options for delivery and pick-up continue to improve -- and this is another example of that.
While many companies are working their way out of the store -- from store, to pick up, to delivery -- Amazon is working their way backward from delivery, to pick up, to store. The difference is Amazon is transforming the status quo, and their model will continue to evolve, so I don't think what we see today is what we will see tomorrow.
A recurring them I would address is quality, and I do not see this as a problem but as a medium for generating loyalty. Quality concerns are well known and because it is, retailers are implementing increasingly higher (zero-tolerance) standards and more impressive accommodations when a problem does arise.
I am going to build on Bob Amster's comments. Hiring people with a genuine passion for the business is a key component of enthusiastic retail employees. For example, an employee at The Vitamin Shoppe or GNC probably did not run around town filling out applications at McD's, Chipolte, and Target. They targeted employers that reflect their lifestyle and it shows in their enthusiasm -- and others with whom they work share that lifestyle.
However, the challenge is higher where involvement is lower (tedium/boredom higher) such as at a general/mass merch retailer, like a grocery store. In those cases, I believe, it is good old managerial motivation that does the trick and making sure employees are working with people that they enjoy being around. Co-workers are so important to attitude.
I would agree that low/minimum wage suppresses enthusiasm, but I respectfully question whether $15/hr will generate actual upsides in enthusiasm vs $12/hr. It may in the short-term, but tedium/boredom is unaffected by a pay raise. IMHO
Without a doubt this changes the role of the physical store as physical traffic transforms into virtual traffic. We started with BOPIS, then home delivery ... this technology enables the consumer to shop at home and have the products delivered. Imagine the next generation on this to preserve the in-store "experience" -- personalized virtual shopping assistants, VR rooms being built into homes, 3-D projection without the use of headsets immersing you in the experience (shopping or entertainment) ... we are just getting started, and what an incredible opportunity it is for retailers.
Lots of great comments. The one I agree with most is from Lyle Bunn: "We should have a roundtable on this" because so many factors play a role. I will add one more factor -- consumer sentiment. We saw marked increases in sentiment going into Christmas. A happier consumer overall may look at things differently ... more optimistically.
On the specific subject, as more small, special interest chains come to market such as Earth Fare, PetPeople, etc, their employees usually have an affinity for the products sold there. Someone who works at The Vitamin Shoppe, for example, is probably not applying to work at Burger King. Health & Wellness are a part of their lifestyle. There are examples in larger stores as well -- Best Buy and Hobby Lobby come to mind. Conversely, if you walk into a Home Depot or Lowe's you may find a master plumber and you may find someone with zero personal interest in home improvement. All this underscores that the "people asset" can be a point of differentiation.
I would respectfully submit that being progressive and having low prices are not in conflict. Additionally, we should consider the McD's version of "upscale" from the perspective of their core consumer/occasion vs comparing it to expectations when entering Five Guys or Shake Shack. I see a greater competitive threat -- at least in the East -- from establishments such as Wawa, Sheetz, and other grab 'n go fuel combos.
Consumers "follow" but do not really follow. They click with the expectation of receiving coupons. There isn't so much a social media affinity (ala Katy Perry) to a grocer as it is a utilitarian connection -- making it all the more important for the grocer to figure out a way to connect to the consumer.
"No plan survives the battlefield." "Adapt or die." YouTube was originally intended to be a dating site, Target used to be Dayton Dry Goods, and on and on ... Branson does a great job of underscoring what is right in front of us everyday, but so often missed, forgotten or ignored. We just need to continually learn from and heed history.
From a consumer perspective, it has the potential to be a huge step forward. Of course execution will determine if it improves the experience. For example, if a consumer orders online, picks up at the store, and delivery at the store is slow, complicated or the wrong product, it will be a net negative. The experience needs to meet expectations.