Grocery fulfillment is the new supply chain battleground
Albertsons is living in historic times
The prospect of a ten-fold improvement in the productivity of online order fulfillment is being put to the test by Albertsons at two of its Safeway stores in San Francisco and San Jose. The retailers is working with Takeoff Technologies on micro-fulfillment centers (MFCs) at the stores and has agreed to purchase an undisclosed number of additional MFCs. The robotic solutions provider maintains huge improvements in speed, productivity, accuracy and efficiency are possible. The way to know this is a big deal is by who is quoted in the press release.
“The micro-fulfillment center model is a key element in the store of the future,” said Vivek Sankaran, president and CEO of Albertsons. “It combines the efficiency of automation with the ease of meeting customers when and how they want to shop.”
“We are living in historic times. The grocery industry is transforming its way into the future, and the winners will be the ones getting it right first,” said José V. Aguerrevere, Takeoff co-founder and CEO.
At GreenWise Market, Publix wants shoppers to see how the sausage is made in a full service meat department.
Publix makes a different kind of historic move
The new GreenWise Market stores Publix opened last week in Lakeland and Boca Raton, FL., bear no resemblance to the parent company’s conventional stores and that’s by design. The retailer is looking to create a highly differentiated shopping experience to appeal to the discriminating natural and organic shopper. The approximately 25,000-sq.-ft. stores reflect the retailer’s latest thinking on merchandising that will resonate with a discriminating shopper.
Dollar Tree exec moves mark unified era
Three high level executive moves and one key departure at Dollar Tree, Inc., unify oversight of the combined operations of the company’s more than 15,000 Dollar Tree and Family Dollar stores roughly four years after the companies merged.
Michael Witynski was named president of Dollar Tree, Inc. to oversee the merchandising, store operations and supply chain functions for the combined Dollar Tree and Family Dollar organizations. Reporting to Witynski is Richard McNeely in the role of chief merchant for Dollar Tree, Inc., overseeing merchandising, marketing and global sourcing. Thomas O’Boyle was named COO of Dollar Tree, Inc.. after previously serving as COO of Family Dollar.
Left out of the new enterprise-focused reporting structure was Duncan Mac Naughton. He spent nearly three years at the company as president of Family Dollar. Given his prior background as chief merchandising and marketing officer at Walmart from 2011 to 2014, Mac Naughton was presumed to be among potential successors to CEO Gary Philbin.
INSIGHTS & INNOVATION
Chewy is eating everyone’s market share
Retail history is being made by Chewy.com, the online pet products retailers whose third quarter sales increased at an unheard of rate of 40% to $1.23 billion. Customer engagement metrics show more customers are shopping more often and spending more on a platform that is proving so sticky it will be hard for competitors to win customer back once they enter the Chewy ecosystm. Average sales per customer increased to $360 from $323, the active customer count increased 32.8% to 12.7 million and the penetration rate for auto-replenishment increased to 70.4%. Full year revenues will approach $5 billion.
Speaking of a sticky ecosystem, Costco checks out self checkout
With member renewals rates running near an all-time high, Costco is maintaining a measured pace when it comes to disrupting its business model. A case in point is the checkout experience. Costco generally does a good job of expediting the checkout process when lines start to build at its high volume warehouse, but shoppers increasingly expect a self-checkout option so Costco is complying. CFO Richard Galanti recently told analysts Costco will add self-checkouts at 92 warehouses in early 2020 to complement the 135 locations out of 646 locations in the U.S. and Canada that already offer self-checkout.
Theatro secures more funding to transform customer service
Retail technology start up Theatro’s efforts to transform customer service and retail operations with its voice-driven virtual assistant technology will be aided by an additional $20 million in funding from Sageview Capital. The new investment follows closely after Theatro secured $15 million from Cisco Investments and Honeywell Ventures. Theatro plans to use the fund to more rapidly scale its voice-driven mobile connectivity solution across retail, hospitality, manufacturing and other sectors where hourly employees can benefit from hands free communications.
Aerial autonomous vehicle maker Ehang is facing a backlog for its aircraft which promise to change urban mobility.
A different kind of drone takes flight
The method by which shoppers take a trip to the store could look very different in the future if little known Ehang Holdings Limited achieves its mission to make safe, autonomous, and eco-friendly air mobility accessible to everyone. In furtherance of that mission the company completed a stock offering at $12.50 a share and disclosed it has sold 38 of its passenger-grade aerial autonomous vehicles (AAVs) for testing, training and demonstration purposes and has a backlog for 48 more AAVs.
Retail Leaders on the Move
Sally Jewell will become the third woman on Costco’s 10 person board pending a vote at the retailer’s annual meeting next month. Jewell currently serves as interim CEO of The Nature Conservancy, was Secretary of the Interior under President Barack Obama from 2013 to 2017 and was CEO of Recreational Equipment Inc. (REI) from 2005 to 2013.
Seattle area cannabis retailer Evergreen Market elevated chief strategy officer Shannon Vetto to become the company’s first CEO. The operator of five stores, two of which opened this year, was founded in 2014 by Jeff Anderson, Eric Gaston and Arne Nelson. Vetto has served as chief strategy officer since 2017 and will lead the retailer’s entry into California next year.
Recently retired National Grocers Association president and CEO Peter Larkin is staying busy. He joined the board of sustainability nonprofit Manomet in December following his appointment in September to the board of Park City Group.
Ulta Beauty CEO Mary Dillon will keynote the International Council of Shopping Centers RECon event May 17-19 in Las Vegas. She is also among the all-female slate of speakers participating in Shoptalk March 22-25 in Las Vegas.
Stitch Fix, one of the original disruptors in the subscription space, named Elizabeth Spaulding, head of Bain & Company’s digital practice, as its new president. She joins the company as CEO Katrina Lake noted StitchFix is expanding its personalization capabilities and eyeing international expansion.
Google’s VP of global client partnerships, Torrence Boone, was named to the board of Macy’s. Boone is responsible for Google’s strategy and partnerships with global advertisers in sectors such as technology, health, beauty and CPG.
Former longtime Macy’s CFO Karen Hoguet has joined the Kroger board of directors following her retirement from the department store chain earlier this year. Hoguet served as Macy’s CFO for 21 years.
Michael Castagnetto was named president of the Robinson Fresh division of C.H. Robinson, filling a position previously held by Jim Lemke who retired.
The Produce Marketing Association named Dr. Max Teplitski chief science officer to lead since, technology, supply chain and sustainability efforts. Dr. Teplitski most recently served as the acting director for the divisions of food safety and nutrition at the USDA National Institute of Food and Agriculture (NIFA).
Shoppers are even lined up at Sears this year.
In Case You Missed it
A November retail sales increase of 2.1% may seem puny, but National Retail Federation chief economist Jack Kleinhenz said the figure was to be expected because the late timing of Thanksgiving will push sales into December. “With strong employment and higher wages, we’re on track for a strong holiday season,” Kleinhenz said. NRF predicts combined November and December sales will increase roughly 4%. One indicator that holiday sales will be strong is when even the few remaining Sears stores have shoppers lined up to spend money as they were at the location shown here on Saturday, Dec. 14, in Brandon, FL.