Tuesday, July 10, 2018

Amazon, Whole Foods sweeten the Prime Day deal

Amazon, Whole Foods sweeten the Prime Day deal

Prime members shopping at the chain get $10 credit for Amazon.com
Amazon is giving Prime members more reason to shop at Whole Foods Market over the next week.
The e-tail giant said Tuesday that it’s offering Prime customers $10 to spend on Amazon for Prime Day when they make a purchase of $10 or more at Whole Foods between July 11 and 17. Prime Day launches on July 16 at 3 p.m. ET and runs through July 17 — a total of 36 hours this year versus 30 hours in 2017.
The promotion works as follows: Prime members spend $10 in-store, scan their Prime Code in the Whole Foods or Amazon app at checkout and get a $10 credit that will be automatically applied to their Amazon account for use on Amazon.com during Prime Day. Customers also can provide their linked phone number at checkout to receive the $10 credit.
Whole Foods is tied into other Prime Day offers as well. Prime members new to grocery delivery from Whole Foods stores via Amazon’s Prime Now program get $10 off their order when they shop before July 17 plus receive $10 to apply to a future order. Also, AmazonPrime Rewards Visa cardholders with an eligible Prime membership receive 10% back, which is double the rewards, on up to $400 in purchases when shopping at Whole Foods from July 14 to 17.
“This is Whole Foods Market’s first Prime Day, and we’re taking the shopping experience to the next level,” said John Mackey, co-founder and CEO of Austin, Texas-based Whole Foods. “Between our exclusive deals and special Prime Day offers, you’re not going to want to miss out on these savings.”
Whole Foods is also serving up exclusive offers on groceries and select seasonal items from July 11 to 17. The deals include organic strawberries (1 lb.) at two for $5; boneless chicken breasts (animal welfare rated and air-chilled) at $3.99/lb., a savings of 40% or more; Icelandic cod fillets (sustainable, wild-caught) at $8.99/lb., a $6/lb. savings; Allegro bagged coffee (sustainably sourced) at buy one, get one free; MegaFood vitamins and supplement at 30% off; RxBar protein bars (1.83 oz.) at two for $3; a 12-pack of Waterloo sparkling water (12 oz. cans) at two for $7; Honey Nut Cheerios at buy one, get one free; Lesley Stowe Raincoast Crisps (3 oz.) for $4.99; and self-serve tea cookies by the pound at 40% off.
“This year, Prime members will experience a special flavor of Prime Day in every Whole Foods Market store nationwide,” added Cem Sibay, vice president of Amazon Prime. “Prime members will also save big, from earning $10 to spend on Amazon for Prime Day when they spend $10 at Whole Foods Market, to 10% back when shopping Whole Foods Market using their Amazon Prime Rewards Visa card.”
Prime member savings and benefits became available at all 467 Whole Foods U.S. stores on June 27. Grocery delivery in as soon as an hour from Whole Foods via Prime Now is currently offered in 19 cities. Amazon, which acquired Whole Foods last August, plans to roll out free two-hour grocery delivery via Prime Now nationwide during 2018.

Robot Wars


Ocado: robot wars Online grocer’s global ambitions require special attention

The Singularity in grocery shopping is edging closer. Ocado’s robotic warehouses have transformed the British online grocer’s fortunes, humiliating short sellers in the process. Hints that it might find new customers for its technology were enough to quell concerns about a profit dip on Tuesday. Shares rose 8 per cent. So far this year, shares are up 150 per cent. That means the company’s market value now exceeds the UK’s Wm Morrison, one of the supermarkets with which it has signed a deal. The company’s enterprise value is close to four times expected sales. Across Europe’s grocery sector the average is closer to 0.5 times. However, transforming into a global technology provider is expensive. Extra investment meant a £9m pre-tax loss for the half year to June. Fixed costs are going to rise again in the second half of the year. Ocado needs to speed up its coding capabilities to fulfil the contracts it has signed. Some 300 extra software engineers are due to be hired in the next six months. All of which means its negative cash flow will not turn positive any time soon. Analysts forecast more than £100m in free cash outflow this year alone, and almost the same in 2019. Ocado has net cash of £165m (less including nearly £100m in lease commitments). But this cash is due to its equity raising efforts. The retail side of the business does not make enough to cover the investment needed in the division that provides robotic warehouses. If Ocado sticks to its planned rollout it will not need to raise additional funds in the next two years. But those plans are ambitious. Ocado has four automated warehouses, all of which are in the UK. In the next five years it plans to have 23 spread around the world. There are still no hard details on the fees or costs of those international deals, which means no guarantee that further funding will not be needed. Shares trade as if the company’s conversion to a tech stock is complete. New, clearly profitable deals will be needed to lift its market value further. 

Interest Brewing In Kombucha As Healthy Beer, Soda Alternative

 1,412 views #GettingBuzz

Brew Dr. KombuchaBREW DR. KOMBUCHA
By Dayna Fields
Boasting a variety of brands and flavors, kombucha—the probiotic-rich “brew” made by fermenting sweet tea—is likely to soon rival craft beer and, eventually, the slumping soda category.
Offered with alcohol or as a soft drink typically in glass bottles, kombucha is currently a tiny segment of the beverage market, but it is seeing tremendous growth. In 2017, the global kombucha market generated $1.5 billion in sales, according to research firm Mordor Intelligence, and is projected to grow at a compound annual growth rate of 23% over the next five years.
In comparison, the $80 billion canned soda category has shrunk by 3% compound annualized over the last five years, according to Mordor. Overall U.S. beer sales were down 1% in 2017, according to the Brewers Association.

Molson Coors clearly sees potential in the nascent category, having announced the acquisition of Fairfield, California-based Clearly Kombucha on June 8, making it the first alcohol strategic to stake claim in this space.
Anheuser-Busch InBev may be next, according to both Matt Thomas, founder of Portland, Oregon-based Brew Dr. Kombucha; and GT Dave, founder of Los Angeles-based GT’s Living Foods (formerly GT’s Kombucha).

In 2016, AB InBev's venture arm, ZX Ventures, acquired New York-based Kombrewcha, which now only offers alcoholic kombucha. Kombucha is naturally alcoholic—and naturally carbonated—due to the fermentation process. Soft drink kombucha requires siphoning off alcohol content after fermentation.

Kombucha is the first better-for-you option in the alcohol space, says Tom First with Castanea Partners, an investor in Brew Dr. In June, Brew Dr. became the first major brand to launch kombucha in 12-ounce aluminum cans.
“I think (kombucha) will be a multi-billion-dollar category that will do well for the foreseeable future,” says First, noting it is fizzy, low in calories and gut-healthy, all on-trend traits.
Mark Rampolla, with Los Angeles-based PowerPlant Ventures—an investor in plant-based foods like Beyond Meat—said he prefers kombucha in bars. “I want it on-tap because sometimes I don’t want to drink,” he says. “There is something about the ritual of beer or wine or cocktails that I think kombucha kind of substitutes.”
Trey Lockerbie, founder of soft drink Better Booch, says the company is investing heavily in its keg business, its fastest-growing revenue channel.
While kombucha sales are currently strongest in California and New York, according to these CEOs, interest will broaden to Middle America soon.
Originally an ancient Japanese home brew, kombucha was introduced to the retail market by GT’s Living Foods in 2005. Today, the industry pioneer estimates it owns 55% of the US market, says CEO GT Dave.
Staunchly independent, GT Living Foods is the only major kombucha brand that is still family-owned.
No. 2 in market share is PepsiCo’s KeVita. Vying for No. 3 are Los Angeles-based Health-Ade—which has an investment from Coca-Cola’s venture arm—Brew Dr. and Bend, Oregon-based Humm Kombucha, according to Mike Burgmaier with Whipstitch Capital.
While alcohol strategic investors are beginning to make moves, soft beverage giants are clearly leading the M&A drive in this space. Eventually, beverage and beer giants alike will want three or four kombucha brands in their portfolios. “Each brand will be a little different,” Burgmaier says, noting variations in production and ingredients yield different flavors and textures.
Health-Ade, for example, adds cold-pressed citrus juice to temper kombucha’s natural vinegar taste. Brew Dr. has a purist approach, adding only herbs and botanicals.
Revive Kombucha—with a 2017 investment from Peet’s Coffee—prides itself on “gateway” flavors like Original Cola and Mocha Java Coffee, says CEO Sean Lovett.
As M&A interest increases, standout companies may sell for as much as 3x to 6x revenue, says Burgmaier. Pepsico’s purchase of KeVita in 2016 was valued at about 2.5x revenue, according to Mergermarket data.
AB InBev has the global reach, refrigerated transportation fleets, and fermented beverage experience to distribute kombucha globally, according to Dave and Thomas.
DanoneWave is also a synergistic suitor, they say, since yogurt is produced by the fermentation of milk. “They live in a close enough world where they understand our language,” says Dave.
China and Japan have the highest adoption rate of probiotics, according to Mordor Intelligence. But Dave says he “could not fathom” entering such complex markets without help.
To succeed, kombucha companies will need to turn “an art” into a replicable “dummy-proof” science, says Dave. The right strategic suitors will have the capability to get that done.

Nordstrom Local expands its innovative, inventory-free retail hubs

Go where the customer is: Nordstrom brings its revolutionary Local service emporiums to more Los Angeles neighborhoods and soon, New York City.

Nordstrom Local expands its innovative, inventory-free retail hubs
[Photo: courtesy of Nordstrom]
What if your favorite fashion destination was also your local tailor, manicurist, bartender, juicer, cobbler, stylist—and even your WeWork?
That’s the essential idea behind Nordstrom Local, the innovative “service hub” the retail giant launched last October in Los Angeles. The 3,000-square-foot atelier-like space alongside millennial catnip boutiques like Glossier and Marc Jacobs on West Hollywood’s bustling Melrose Avenue combines a medley of Nordstrom’s popular amenities under one chic roof.
“We aim to bring the convenience and accessibility of our some of the most popular or highly demanded services right to the neighborhoods where our customers live and work,” Shea Jensen, Nordstrom senior vice president of customer experience, tells Fast Company. “We’ve heard loud and clear from our customers that drivability is a factor.”
The only thing missing is inventory—but that’s by design.  In lieu of stocked shelves, clients begin this revolutionary shopping experience well ahead–either at home or on their mobile phone. Customers come here to pick up their online orders.
So far, customers have responded positively, so much so that today, Nordstrom Local is announcing two more locations in Los Angeles: A 1,200-square-foot space in Brentwood, and a 2,200-square-foot store in Downtown. And there are plans to expand to New York City. Each location’s decor and services will be personalized to neighborhood needs and tastes.
Los Angeles is Nordstrom’s largest market with 16 full-line stores and 4 million customers, and with its mass inventory, an ideal expansion ground, says Ken Worzel, Nordstrom’s chief digital officer and president of Nordstrom.com.
“We’ve got a young customer base that’s very engaged with our brand,” says Worzel. “One of the clear messages we’ve gotten is people love our brand when we’re able to bring the combination of highly relevant great product—with a layer of our people and services—to help make [the shopping experience] compelling . . . and super easy for them.”
This hyperlocal concept is the latest investment in its hallmark customer service. Bolstered by the growing number of discount Nordstrom Racks, the company reached record sales of $15.1 billion last year in an otherwise dismal retail market. Nordstrom has also experienced customer growth of 4%, to 33 million nationwide.


Nordstrom Local looks and feels nothing like its traditional stores. The airy and sunny ivy-fronted West Hollywood location has service pockets at each corner of the showroom: The Trunk Club desk helps men order a new wardrobe or size a tux; a seamstress sits in front an artistic mural of various threads ready to make adjustments; and in the back, customers enjoy a mani or pedi alongside a stocked kitchen of expensive juices, beer, and wine.
The luxurious, large fitting rooms–with their thick, floor-length curtains and mid-century pastel furniture– are reminiscent of a bridal boutique (minus the frenzied wedding parties).
Some come in and enjoy a full day at Nordstrom Local, parking themselves at a large marble communal table to either work–or perhaps peruse Nordstrom.com. You’ll spot busy Angelenos in leisurewear dropping off online returns or broken, scuffed handbags and shoes awaiting mending in their respective bins. Some simply drive up to the back for curbside pickup.
During the holidays, pop-up services like gift wrapping or gift stations attempt to make the season a bit more tolerable.
It’s the store of your overscheduled dreams.
[Photo: courtesy of Nordstrom]
Many are there specifically for trying and picking up merchandise personally picked for them by Nordstrom stylists via Style Board, the company’s latest curation service. Style Board offers a team of online personal stylists who will handpick items–clothing, accessories, jewelry–based on a questionnaire that helps them better understand your personal style.
Within less than a day, the stylist emails you a “board” of curated designs, which will then wait for you in a dressing room at Nordstrom Local. (It’s the ideal styling situation for those of us who are too lazy–or grouchy–to deal with a real, live stylist.)
Should you want further expertise, a stylist will assist you in Nordstrom Local. Ideally, you build a relationship with your stylist, who is on standby whenever you need an outfit or alteration.
“This gives [customers] a unique opportunity to get the best of both worlds,” notes fashion and retail expert Bahar Takhtehchian. “They get this ability to buy things quickly online, and then they’re able to go in there to get more details and hands-on help.”
Style Board, in many ways, is the culmination of Nordstrom’s strengths: inventory, customer service, digital prowess, and convenience. Those same markers led the company to acquire Trunk Club, the online personal styling service, in 2014.
“Our local market strategy is reflective of that more often today, customers don’t see Nordstrom as a website or a store or a salesperson. They see Nordstrom as a combination of all three of those,” says Jensen. “Our ambition is to serve customers in the local markets where they live and work, really agnostic of channel store–digital or physical.”
[Photo: courtesy of Nordstrom]


The 117-year-old, Seattle-based retailer has been evolving the retail experience since its inception—sometimes to excess. At one point in the 1950s, the company featured caged monkeys in the children’s shoe department.
In 1998, it was one of the first fashion retailers to embrace e-commerce. In 2012, it invested and partnered with men’s clothing e-site Bonobos. In 2018, it acquired private flash sale site HauteLook.
Most recently, Nordstrom partnered with Anthropologie for in-store home collections and expanded its Reserve Online & Try In Storeservice across the country. The popular Nordstrom Rewards program, which covers all Nordstrom Local services, grew last year by 35% to 10.5 million, according to the company’s recent investor report. Sales from Nordstrom Rewards customers represented 51% of sales, an increase from 44% in 2016.
[Photo: courtesy of Nordstrom]
Nordstrom operates 373 stores in 40 states, including 122 full-line stores in the U.S., Canada, and Puerto Rico, as well as 239 Nordstrom Racks. While plenty of competitors attempt to address slumping sales with in-store experiences or revamped stores, Nordstrom’s multi-pronged approach looks to open new avenues of revenue.
“Part of our DNA is always trying to find a way to create a better experience,” reflects Jamie Nordstrom, president of Nordstrom stores. For him, the appeal of the Local concept in his no. 1 customer market made sense: “Having lived in L.A. for a couple of years, you know it’s damn hard to get around that town.”
“We’re trying to improve our effectiveness of being a great retailer in every major market we do business in: Nordstrom Local is one component of that,” says Nordstrom.
Though still in its infancy, Nordstrom Local Melrose offers some insight as to what resonates with clients. Buy online/curbside pickup, tailoring, and drop-off returns are the most popular services. The latter is especially helpful for Nordstrom to quickly reinsert merchandise back into its e-commerce inventory. Beauty services, meanwhile, saw a threefold pickup following the introduction of pedicure stations.
“When we find ways to engage with customers, their engagement with us tends to go up across the board,” says Worzel. “Customers are interacting with us more. They’re spending more with us digitally through online experiences, but they’re also continuing to shop in our existing stores and they’re just adding Local as another point of experience with us.”
[Photo: courtesy of Nordstrom]


Nordstrom Local seems to specifically appeal to clients who might not otherwise frequent a mall: millennials, the super busy, people who live in West Hollywood. Perhaps folks who potentially prefer browsing outfits while half-watching the news, then swinging by Local on their way home from work to pick up an online order. Or maybe it’s a busy mom who wants her nails done while imbibing her daily green juice as a salesperson demonstrates what would suit her best at an upcoming wedding.
According to a recent Forrester consumer research report, 66% of customers think that valuing their time is the most important element in delivering good customer service. “Time is a precious commodity for everybody,” says Worzel. “And so, when we make it easier for [customers] to discover product, engage with great product they’re looking for, but also with our people and our services on those terms, that’s a win for customers.”
[Photo: courtesy of Nordstrom]
And it’s working:  Nordstrom was named the U.S.’s favorite premium fashion retailer for the sixth year in Market Force Information’s annual study. Over 10,000 shoppers picked it over Lane Bryant, Dillard’s, Forever 21, and Kohl’s.
“You’re going to see us continue to just try stuff with customers, and some of it’s going to work, and some of it’s not going to work,” says Worzel, “but we think it’s super important to continue to innovate and not get stuck in an old model.”

Jet to open Bronx fulfillment center for NYC push

The Kroger Co. says it will not enforce a new policy extending payments to 90 days for all suppliers, sparing produce companies who are covered by the Perishable Agricultural Commodities Act. ( Kroger Co. logo )
(UPDATED, 9 p.m.) The Kroger Co. has rescinded a payment schedule that would have forced produce suppliers to lose PACA trust rights by extending payment terms to 90 days.
The Net 90 mandate, announced by Kroger in letters to suppliers in mid-June, was set to go in effect Aug. 1. It was met with immediate concern and scorn by produce trade groups, shippers and anyone in the industry depending on the Perishable Agricultural Commodities Act as a remedy to recoup losses in bankruptcy and non-payment situations.
The PACA outlines a maximum payment extension of 30 days.
Judith Wey Rudman, director of the U.S. Department of Agriculture’s PACA Division’s Fair Trade Practices Program, sent Kroger a letter questioning the Net 90 policy on June 25.
In a July 9 letter responding to Rudman, Matt Hodge, Kroger’s senior manager of enterprise sourcing finance, wrote that the retailer has responded to suppliers questioning the policy.
“We’ve shared with individual produce suppliers that we will respect existing contractual and legal mandates including PACA. We never intended for PACA-eligible produce suppliers to waive their PACA Trust rights,” according to the letter.
“I’d like to take this opportunity to clearly state that produce suppliers protected under PACA are not required to participate in Net 90 payment terms,” Hodge wrote. “For those PACA-eligible produce suppliers who are interested, we will continue to negotiate for payment terms that are permitted within their PACA Trust rights.”
But according to the retailer’s original letter, there was no indication that was the case, calling for the policy to cover “all aspects” of Kroger’s business.
The produce industry responded immediately, but Kroger made no public announcement to clarify its position.
Matt McInerney, senior executive vice president for Western Growers, has fielded numerous calls on the policy.
On July 9, he complimented the industry’s response — engaging both Kroger and produce trade groups to resolve the issue — and Kroger’s decision to exempt produce suppliers, saying it handled the situation “professionally and appropriately.”
“From the industry point of view, really this is the first time in a long time the industry has unified on a particular aspect on demands from the seller side,” McInerney said July 9.
He said the major shippers that “took it upon themselves to dialogue with Kroger did a favor for the industry.”
The California Fresh Fruit Association, which release a statement in late June imploring Kroger to “fix this mess,” responded to the about-face on the policy. A July 9 statement from association President George Radanovich said the Net 90 policy was “wrong and illegal” for produce suppliers.
“We would like to commend the fresh produce industry for coming together as a unified voice for our industry,” Radanovich said in the statement. “Today we held the line on an important issue.”
He said the industry has been a good partner for Kroger, and “Kroger remembered that partnership and fixed the mess it created.”